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`POLICY —
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`How Life360 won its patent war
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`Jury saw CEO 5 Dear piece of shit" letter to his "patent troll"—and understood.
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`JOE MULLIN - 3/19/2015, 4:50 PM
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`Life360 CEO Chris Hulls in his San Francisco office.
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`In May 2014, Life360 CEO Chris Hulls received an aggressive patent demand letter. The letter, from
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`lawyers representing a company called Advanced Ground Information Systems (AGIS), told him he
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`needed to pay for a "royalty—bearing license" to its four patents, or Life360 and its customers would
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`have to "cease and desist" from infringement.
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`In other words: pay up, or shut down your company. The letter demanded a response within three
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`days. Hulls wrote back:
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`®
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`DELIVERED STRAIGHT TO YOUR INBOX.
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`Email address
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`Will be used in accordance with our ”Baggy Policy
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`Dear Piece ofShit,
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`We are currently in the process of retaining counsel and investigating this matter. As a result,
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`we will not be able to meet your Friday deadline. After reviewing this matter with our
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`counsel, we will provide a prompt response.
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`I will pray tonight that karma is real, and that you are its worthy recipient,
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`Chris
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`On that Friday, Life360 got sued. The lawyers attached Hulls‘ "Dear Piece of Shit" letter as an exhibit.
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`What AGIS' lawyers could not have known is that they'd picked out one of the few small companies
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`that wasn't going to back down from a patent fight—and Hulls wasn't going to play by the usual
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`rules. Life360 was supposed to be their "easy" target. The lawyers, from a top IP law firm called
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`Kenyon & Kenyon, had plans to hunt bigger game later—they had also sent (more nicely worded)
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`patent threat letters to Google, Facebook, and Foursquare.
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`What Hulls couldn't have known is that in less than a year, he'd be in front ofa jury, explaining his
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`"Dear Piece of Shit" missive to an eight-person jury in faraway Florida. It wouldn't be easy. And AGIS
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`was no typical "patent troll," but a small company thatjust hadn't managed to be profitable.
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`Still, he was in a unique position where he was ready and able to fight back. Life360 had just got a
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`third round offunding, $50 million, and he had a board who would support him. When the company
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`was younger and smaller, he'd had to pay off patent trolls—more than once. "If you have $3 million in
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`decently, I have this lawyer trying to steal from me," he said.
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`the bank, can you really risk a suit that's going to be one million, when you could make it go away for
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`$100,000?" he said in an interview with Ars. "Every time we wrote that check, my soul died a little bit."
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`Hulls had worked for years with little or no salary. "Now, right when I'm finally starting to pay myself
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`“Circles" and “LifeRing”
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`Life360 offers a service called "Circles" that allows family and friends to see each other on a map and
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`send group messages. It's a service that answers the age-old question of "where are your friends and
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`family, and what are they up to?" It‘s far from a new idea.
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`AGIS sells "LifeRing," which it markets to military and police clients. It also allows clients to view
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`themselves on a map and contact each other.
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`The two companies have never been competitors. Life360 offers its app for free on Android and
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`iPhone and charges $5 a month to "premium" users who get extra features. AGIS, by
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`contrast, competes for government contracts, sometimes connected to specific events. For instance,
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`the Honolulu Police Department contracted with AGIS in 2011 to use its software during the Asia-
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`Pacific Economic Cooperation forum.
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`AGIS has made a few million dollars since it was founded more than a decade ago, but it has never
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`had a profitable year. The company is run out of the home of its founder, Malcolm "Cap" Beyer, who
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`lives in Jupiter, Florida. At some point in 2014, Beyer decided to look into enforcing some of its 13
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`issued patents, the oldest of which has a 2004 filing date.
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`Beyer hadn't heard of Life360 until last year, when a board member contacted him, suggesting that
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`the company might be a good target for patent licensing. In May of that year, the company's lawyers
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`sent the threat letter, which said Life360 had infringed four US patents, numbered 7,031,728,
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`7,764,954, 8,126,441 and 7,672,681.
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`A patent for calling people on a map
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`AGIS claims its patents are infringed by very basic functions of the Life360 app, such as its ability
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`to "allow a user to touch a family member's symbol on a map and initiate a rapid voice
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`communication or text message."
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`"We're getting sued for having markers on a map showing where people are and allowing
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`communication between them," he told one reporter shortly after he was sued, adding that he could
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`"show them a Star Trek episode from the 19605" that had a similar system.
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`Knowing that AGIS was likely to pursue other companies, Life360 offered free legal support to any
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`other startups AGIS might sue, including research on the patents and prior art. Hulls took other steps
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`that patent defendants aren't "supposed" to do, like simply calling up the inventor whose patents
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`he'd supposedly infringed and trying to initiate a discussion. But Beyer didn't even know who he was.
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`Hulls also continued to speak publicly about his fight,
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`creating a website called "Stop AGIS," in which
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`he described his quest to create "a hostile environment
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`in which troll—like behavior is no longer a financially
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`viable way to operate."
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`"AGIS may not be the exact definition of a troll, but the
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`entity's behavior is eerily similar," Hulls wrote. "Perhaps
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`it‘s just a business struggling to stay afloat and
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`grasping at any thread to stay alive."
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`More provocatively, he also created a website with the
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`name of AGIS' founder, malcolmbeyer.com. "If you
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`supportjobs and innovation, we encourage you to
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`investigate the actions of Malcolm K. Beyer and AGIS
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`|nc.," the site states.
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`[\C
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`I III IJGI LILUIGI , VVI IUIII
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`Hulls believes is the true driver behind the lawsuit. At
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`one point, Hulls remembers Hannemann telling him
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`that "for everyone else this is about money, but for you
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`it's personal."
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`"If we go to trial, I'm going to put you out of business,"
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`SIGN IN
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`Hannemann told Hulls after one required mediation
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`session. (Hulls' lawyer confirmed the encounter
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`happened; Hannemann didn't respond to questions
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`about the discussion.)
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`Life 360 app.
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`He wasn‘t kidding. The companies weren't competitive, but shortly before trial AGIS suddenly created
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`a "consumer app" for Android called HoundDog, which would increase their chances of getting an
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`injunction if they won. (The app still wasn‘t available on the first day of trial, but at some point last
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`week it went up on the Google Play store.)
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`But trial was where it was headed. Hulls had every reason to roll the dice with a jury, because the
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`payout Hannemann was demanding was massive. While he can't disclose offers from mediation,
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`AGIS would shortly be asking a Florida jury to award it $3 million in damages.
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`Life360 is still a relatively small company, with 60 employees working to build up its base of active
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`users. "My morals aside, they made it easy for us to go to court, because the numbers are so big," he
`said.
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`“This case is a collision"
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`On March 8, Hulls and his co-founder Alex Haro flew to Florida for the week-long trial, which would
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`be held in the federal courthouse in West Palm Beach, near AGIS' home office. The company had
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`hired Kent Baldauf of the Pittsburg-based Webb law firm, whose team has a history of taking patent
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`cases for determined troll-fighters, including Lee Cheng, the top lawyer for Newegg.
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`US Districtjudge Donald Middlebrooks made several key rulingsjust before trial about what evidence
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`would and would not come in. The "Dear Piece of Shit" letter, as a pre-trial communication, would be
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`shown to the jury, Middlebrooks ruled. Baldauf knew he'd have to get
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`out in front of that and planned to mention it during his opening
`statement.
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`I'This case is a collision," AGIS lawyer Mark Hannemann said in
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`opening statements. "It is a collision between two creative, high-tech
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`companies and two creative entrepreneurs who started those
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`companies and drove them on."
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`AGIS' software “turns your smartphone into basically a command and
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`control center, right there in your hand," Hannemann said. Now, that
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`is a good idea now and the companies are quite successful with it. But 3
`it was an even better idea back in 2004, and that's the perspective we :2;
`need to use to look at this case."
`‘1
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`There was "no evidence at all" that Hulls had copied AGIS,
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`Alex Ham,
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`Hannemann acknowledged. But Life360 still needed to pay for its
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`patents.
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`Enlarge / Life360 co-founder
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`"I had the pleasure of meeting Mr. Beyer and Ms. Beyer throughout the course of this litigation," Kent
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`Baldauf said during his opening for Life360. "They are very nice people. The fact that they are nice
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`people and it is a nice story certainly doesn't mean that these patents are infringed. It doesn't mean
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`that Life360 is liable for damages."
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`Baldauf continued:
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`There has been absolutely no competition between these companies. There is also
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`testimony from Mr. Beyer that he said that the only time he is really sure that he first
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`positively learned about Life360 was when they were identified by their lawyers. Letters were
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`sent to Google, a letter was sent to Facebook."
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`Thejury was going to see a letter, and "the choice of language you are going to see is unfortunate,"
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`said Baldauf. "To let the genie out of the bottle, Mr. Hulls responded and titled the e-mail back, 'Dear
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`Piece of Shit.‘ I hope that doesn‘t appall anybody. Mr. Hulls is going to tell you he was angry, and this
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`is the company that he poured his heart and soul into, brought it up from nothing, and here is a letter
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`from someone he never heard of before, telling him that he has three days to pay up or stop."
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`nrnnrn rnuurn'rr
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`https:llarstechnica.com/tech-policy/2015/03/how-life360-won-its-patent—war/
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`JOE MULLIN
`
`Joe has covered the intersection of law and technology, including the world's biggest copyright and patent
`battles, since 2007.
`
`EMAILjoe.mu||in@arstechnica.com // TWITTER @joemullin
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