Alleged Holder of Patent for International Shipping Files Bankruptcy
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Alleged Holder of Patent for International Shipping Files Bankruptcy

December 12, 2011

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A small company in Virginia has found itself filing for bankruptcy after spending millions of dollars in legal fees trying to prove that it held a patent for a lucrative, and widely used, method of shipping goods overseas.

According to the Wall Street Journal, DE Technologies Inc., a two-person company in Blacksburg, Virginia, has fought several unsuccessful legal battles over the past few years in an effort to collect money from global shipping companies for using the firm’s controversial patent.

Sources indicate that, in 2002, the company was awarded a patent for allegedly creating cost-effective way for middlemen to ship cargo internationally via ocean routes. The firm claims that patent entitles it to recover a small percentage of the proceeds from several companies’ international shipments.

While the company believes it is entitled to only a small portion of each shipment, the accrued gains from each international shipment could reach billions of dollars. Thus, the stakes are very high for the company’s patent fight.

After years of costly court battles, though, the company’s founder, Ed Pool, has filed for protection under Chapter 11 bankruptcy law. While reaping the benefits of bankruptcy’s automatic stay, which will halt collection actions against his company, Pool hopes to work out "tricky" issues with its creditors.

The Wall Street Journal reported that DE Technologies has assets worth at least $10 million, and its total liabilities fall somewhere short of the $10 million mark.

During its brief existence, the company seems to have spent most of its time in court. In 2004, DE Technology filed its first major lawsuit against Dell, which settled the dispute by agreeing to pay a one-time license fee, although the amount of this payment was not released publicly.

After reaching this settlement, DE Technologies filed lawsuits against two major international shipping companies, International Checkout and IShipUSA Inc., for their alleged use of the firm’s patented shipping method. These suits have not yet been resolved.

Predictably, the company’s aggressive methods have upset shipping companies, as well as neutral patent attorneys. These critics argue that patents are mean to protect novel ideas, not inventions that are painfully obvious.

In addition, critics claim that DE Technologies should not be able to profit from the mere existence of international commerce.

In response, Ed Pool claims that his ideas, which consisted of a complex web of software that allegedly computerized the entire shipping process, were immensely valuable to major companies and that he is simply an underdog seeking fair compensation for his work.


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