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The company in question GEMSA Pty Ltd of Australia got a patent on "Storage cabinets" on a computer. Pretty much a patent on folders or directories. Now they are suing everyone.

According to the EFF: "As far as we can tell, GEMSA seems to think that anyone with a website that links to hosted content infringes its patent"

https://www.eff.org/deeplinks/2016/06/stupid-patent-month-st...

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How does this not get immediately dismissed by prior art?

In order for it to be dismissed as prior art, it has to make it all the way to court. The business model of patent trolls like GEMSA is that they get a bunch of obviously overbroad and spurious patents, and then they sue a lot of companies for them, offering to settle for less than the cost of defense. If a company actually puts up a legal defense, they drop the lawsuit.

I'm a little surprised that the courts don't get cranky at the firm that files hundreds of cases and then retracts pretty much all of them. It seems like red flag behavior that should be investigated. Is there just a lack of oversight on legal firms? It seems to take exceptionally egregious behavior before anybody steps in.

In some states for some actions there is a rule that disallows retracting a suit after an answer is filed. Might be useful for patents in federal law. That's for Congress to take up.

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