The transit industry association is challenging the validity of the patents cited in the claims, but says many agencies have no choice but to settle to avoid litigation costs that can reach $2 million to $3 million even if they’re successful.
The American Public Transportation Association believes there are only two companies targeting transit agencies with lawsuits. It is aware of 11 formal lawsuits and 12 other threats of legal action but believes there are many others that have not become public due to confidentiality clauses in the settlement deals.
The lawsuit his group filed Tuesday in federal court in Manhattan identifies the two companies as ArrivalStar S.A. in Luxembourg and its affiliate Melvino Technologies Ltd., an offshore firm in the British Virgin Islands.
Dowell Baker, a Lafayette, Ind., law firm that represents the two companies did not respond to a phone message seeking comment Thursday.
One of the law firm’s claim letters, sent to the Toledo Area Regional Transit Authority in February 2012, says it represents a founder of ArrivalStar who invented tracking technology used in public transportation and shipment of cargo and packages.
“ArrivalStar has licensed its technology to over 180 companies,” the claim letter says. “Although many of these licenses were granted in settlement of patent infringement actions filed by ArrivalStar, many resulted from amicable business negotiations.”
LaRusch, of the American Public Transportation Association, disputed the assertion that the companies have developed any technology.
“They don’t develop anything. They don’t produce anything. Their reason for being appears to be simply to file claims against people who go out and create things,” he said.