However, almost everyone agrees that there is a patent troll problem. Patent trolls exist, are taking advantage of the legal system, and are imposing a real cost on innovative companies and end users.
Here are some ways, in my opinion, that the Innovation Act could (probably) (at least partially) alleviate the patent troll problem:
- Patent litigation against customers of a product (e.g., lawsuit against the owner of a wifi router) can be stayed if there is simultaneous litigation against the manufacturer. Patent trolls currently have an incentive to target customers because they are more likely to pay a relatively small settlement (or avoid the product, putting additional burden on the manufacturer).
- Patent holders must provide more information (list of products that are infringing specific claims of their patents) when filing a lawsuit. This allows defendants to be better prepared and would probably discourage some frivolous lawsuits.
- The court can require the losing party in a patent infringement case to pay the legal costs of the other party. This discourages patent trolls from filing frivolous lawsuits which they would likely lose.
I agree that the patent reform act is overall a positive move for the US patenting system. Though I am concerned that the definition of patent trolls might coincidentally categorizes the smaller businesses as one of them. It's kind of hard to draw the fine line between them.
ReplyDeleteHm. I had not thought about that point. By smaller businesses I'm assuming you mean smaller innovative firms who are pursuing litigation for actual patent infringements. That's a good point, I feel that smaller firms could indeed come off as those who are simply trying to make a profit off their IP . BUT I feel there are ways to screen them, for example patent holding corporations that only own patents and aren't actually producers of technology have a distinct corporate structure and businesses practices. I don't think they go out of their way enough to give a false impression that they are actually producers of innovation. There is also a history of patent involved transactions that can clearly show if a firm applied for a patent from the uspto or if they purchased it from another corporation. But I do agree that some firms probably do get through these screens
DeleteIf more stringent restrictions are put into place to weed out patent trolls, I'm curious as to how far some companies will go to earn a few bucks for their purchased IP? I remember Professor Lavian mentioning in class how many NPEs and patent trolls are just a folder in a desk in some office somewhere. And that's the company. I think a simple step to helping eliminate patent trolls would be to track down these sort of people. Osama brings up a good point that it should be easy for the court to distinguish between legitimate companies with products and patent trolls. But if that's the case, why haven't they done it yet? And if they do, what is to be done with the patents that these trolls used to have? Should they be auctioned off again with the danger that they will fall into the hands of another patent troll? Or should they be invalidated? Are either of these solutions really fair? Does the government have any jurisdiction over what is a legitimate company and what isn't if all the paperwork is technically in proper order?
DeleteIt seems like it should be easy to distinguish between NPEs and companies that actually produce products. However, if the distinction is simple, I wonder why the government has yet to do anything about it? How come companies that are just a folder in a desk in a law firm somewhere can still make money off of legitimate practicing corporations? And hypothetically, let's say one day a law is put into use that NPEs are no longer allowed. What happens to all the patents they own? Should they be auctioned off, given back to the original owner, or invalidated? Are any of these options viable? There's a chance that they will just fall into the hands of another potential patent troll. And at the end of the day, does the government really have any right to say that a company can't be a company even when all the paperwork is technically in order? It seems like a tricky business to me.
DeleteI didn't think that non-practicing entities included universities. That is a very good point and it definitely blurs the line on the definition of "patent troll".
ReplyDeleteI think the second point you make about the Innovation Act is the most valuable. Having to provide more information every time some sort of complaint is filed will help identify quite a few patent trolls that operate as such. It is known that many patent trolls file their complaints under shell entities to deflect attention from the USPTO. This will be a great tool to help crack down on these companies.
I agree with Asad above that the second point would help a lot for defendants. I think it would save a lot of headache as well during the case, perhaps even speed up a settlement because it would be clear that the plaintiff really does have something to argue. I also like the idea of the third point. I know we discussed in class how a lot of companies or people will settle because they just can't afford litigation. This would mean that it's only worth suing if you know for a fact you will win, and you're suing for real reasons of infringement.
ReplyDeleteI really like the idea of the 3rd point. With the risk of having to pay the legal fees of the winning party in a trial, patent trolls could effectively be taken down. This is because they are often sure of the fact that they will lose, and so obviously this will make them rethink.
ReplyDeleteIt is surprising that such an obvious fix wasn't done before. If an opponent clearly knows they have nothing to lose, why be responsible with their actions? I am in deep favor of this change because it makes one rule fair for all in the game.
DeleteThe Innovation Act legislation was killed (at least for now) in the Senate, but the Supreme Court has expanded fee-shifted so that courts can award attorney fees within the confines of existing law. So I think the court judges decided on their own that this would be an obvious enough fix that wouldn't even require politicians to change the law.
DeleteI also think the third point is important. As Professor Lavian explained, trolls tend to go after entities that cannot pay for litigation, thereby forcing a settlement through financial bullying. By awarding legal costs to winners, this behavior would be discouraged.
ReplyDeleteHi Dara, please keep up the great work! I want to commend you on the following:
ReplyDelete• You chose relevant, interesting topics
• You discuss them intelligently and thoroughly
• You include your own opinion as well as those of others
• You reference appropriate and useful links
• You engaged in good discussion and comments with others, asking excellent questions
• You proofread your work
The points you mention about discouraging patent trolls are crucial, especially the transparency issue and the penalty for losing a lawsuit. By exposing the patent troll's information and also creating additional expenses should the NPE lose, it levels the playing field for the defendant and plaintiff; both sides have equal information about the other, and each team is only encouraged to file a lawsuit if there is a legitimate cause.
ReplyDeleteI tried to reply to Osama above but for some reason I can't.
ReplyDeleteHi Dara,
ReplyDeleteGreat post. Your first point of staying suits against consumers surprises me because it's a great idea – and I'm in awe that it has not already been implemented. This makes me feel quite uncomfortable as an electronics consumer because there is simply so much alleged patent infringement going on. One should be careful about the products they're supporting then. Didn't realize how much pressure was currently on the general public.