Macy's (M) facing patent infringement lawsuit over search-engine technology

One expert calls it a 'patent troll' case

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CINCINNATI - Macy’s Inc. is accused of patent infringement in a federal lawsuit that one legal expert said is likely a “patent troll” case.

Macy’s declined to comment about the June 8 complaint, filed in U.S. District Court in Delaware. Attorneys who filed the lawsuit could not be reached for comment.

The Cincinnati-based department store company was one of several retailers sued in early June by Smart Search Concepts LLC, a Southampton, New York–based company that owns the rights to a pair of search-engine patents issued in 2007 and 2009.

The company's lawsuit alleges that Macy’s and Bloomingdale’s violated its “search-on-the-fly” technology by setting up websites that let consumers search for merchandise with keywords, drop-down menus and database queries that allow users to refine their searches in multiple steps.

Similar complaints were filed against Kohl’s, Gap, J.C. Penney, Nieman Marcus and Nordstrom, according to published reports.

The complaints seek unspecified damage awards and a court order allowing it to collect attorney fees.

“It has become a business model,” said Columbus attorney Joseph Dreitler, who works on intellectual property cases. “There are companies out there that go out and buy these patents. They don’t make anything. They don’t do the R&D. The only thing they own are patents that have never been commercialized and all they do is sue people.”

Dreitler said patent trolls are often able to secure licensing fees from companies looking to avoid the expense of defending a patent-infringement case. Defenders of the practice say patents are property rights, protected by the U.S. Constitution. When inventors assign patents to investors, some argue, it encourages innovation by making patented discoveries a more liquid asset.

By some estimates, the number of patent troll lawsuits exceeded 2,900 in 2012. The National Retail Federation says more than 200 retailers have been named in such complaints. The Kroger Co. was named as a defendant in 2011 in a lawsuit filed by Geotag Inc., which was identified as a patent troll by tech bloggers.

Congress has debated a variety of bills aimed at solving the problem, including the Shield Act, which would require patent owners who do not use or manufacture goods based on their patents to pay legal expenses when they sue but don’t win patent infringement judgments. President Obama endorsed the idea in March, but the legislation is yet to be passed.

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