Patent Holders Using Loophole To Sneak Around Supreme Court Decision

from the well,-that's-innovation-for-you dept

Fri, Jun 1st 2007 2:48pm — Mike Masnick

Last May, the Supreme Court made an important ruling concerning patents, noting that it didn't make sense for courts to automatically put an injunction in place when patent infringement occurred. The reasoning for this was that patents often cover a very tiny part of a product, and blocking that entire product over a small component doesn't seem fair or reasonable. This doesn't mean that a court can't award an injunction -- just that it needs to take into account the bigger picture of what makes sense and how important the patented part is. This makes a lot of sense -- though, of course, big patent holders weren't at all happy with it. That's because patent holders would use the threat of an injunction, which could completely destroy a business, to force companies to settle patent infringement suits even if the suit wasn't valid. The risk of getting hit with an injunction was just too great. So, it was nice to see the Supreme Court push back at least a little on that point. However, leave it to the patent lawyers to figure out a loophole. We noted last summer that patent holders were skipping the courts and going to the International Trade Commission instead, claiming that infringing products represent unfair trade practices, and the ITC should ban those products from being imported (so it only applies to imported products, rather than domestic ones). This is effectively an injunction within the US for foreign products. Where it gets tricky is that the ITC is under no obligation to follow the court's rulings on this matter or use the standard tests over whether or not a patent is valid or an injunction makes sense. It can just decide there's infringement and ban the sale of the product in the US -- basically giving patent holders a way to get an injunction without ever going to court. As was predicted last summer, this little loophole is now becoming increasingly popular among patent holders, basically giving patent holders two separate ways to attack anyone they believe has infringed. While the ITC (thankfully) hasn't been rushing to approve these types of bans, it still seems reasonable to suggest that the ITC should at least need to follow the same basic standards that the courts need to follow in recognizing a patent and imposing an injunction.

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15 Comments

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angry dude, 1 Jun 2007 @ 3:28pm

Enough nonsense
Just shut up already, Mike, Ok ?
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- Anonymous Coward, 1 Jun 2007 @ 4:08pm
  
  Re: Enough nonsense
  If this message surprises you, go die.
  
  If you don't like what Mike writes, don't read it.
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- Angry at dude, 1 Jun 2007 @ 4:12pm
  
  Re: Enough nonsense
  Jesus. YOU are the type of person that brought us the "V" chip. You don't like what Mike "says", then turn the channel or turn it off.
  
  SOME of us like to read Mike's posts, read the related story that he is discussing and THEN read other comments, gather some different viewpoints/ideas and maybe become a little smarter about things (or at least more pissed off about things).
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- Fed-up with your nonsense OK?, 1 Jun 2007 @ 4:54pm
  
  Re: Enough nonsense
  What kind of simpleton are you? If you can't find anything else to complain about on the net, then you need to have your computer taken away!
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- Charles Griswold, 1 Jun 2007 @ 8:06pm
  
  Re: Enough nonsense
  Just shut up already, Mike, Ok ?
  If you don't like reading TechDirt, stop reading it! Continuing to read a blog that they constantly and vehemently disagree with doesn't strike me as being a very fulfilling experience. That's like going to a restaurant you don't like and ordering your least favorite meal day after day, and then complaining about the quality of the food. Come on, man, most dogs have more sense than that, and they've been known to eat cat poop.
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  - Cixelsid, 2 Jun 2007 @ 1:27am
    
    Re: Re: Enough nonsense
    I reckon Angry Dude has pretty much succeeded in his attempt to divert attention from the issue. Best way to deal with him would just be to flat out ignore any statements he posts and thereby not provide him with the attention that he so craves.
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    - Charles Griswold, 2 Jun 2007 @ 5:51pm
      
      Re: Re: Re: Enough nonsense
      I reckon Angry Dude has pretty much succeeded in his attempt to divert attention from the issue. Best way to deal with him would just be to flat out ignore any statements he posts and thereby not provide him with the attention that he so craves.
      You're right. I had thought, however, that a vicious mocking might drive him away. We shall see.
      
      Anyhoo, back on subject. The more of these patent system abuses I see, the more inclined I am to believe that Mike and Company are right, and that we should either strike down the concept of "Intellectual Property" or severely curtail IP rights.
      
      IMHO, we should probably reset IP law to the way it was a couple of hundred years ago. If we still see abuses of IP law, we should completely strike the concepts of copyright and patents and strictly limit the scope of trademark and trade dress.
      
      In other words, if the IP owners can't play nice, they don't get to play.
      
      I really doubt if anything that drastic will ever be passed, but it would be really interesting to see what would happen if it did.
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      - angry dude, 2 Jun 2007 @ 6:55pm
        
        Re: Re: Re: Re: Enough nonsense
        Little Charlie,
        
        Guess what ? I AM A PATENT TROLL !!!!!!!!!!!!!!!!!!
        
        I really wish you success, so maybe, just maybe, one day you will be able to say the same about yourself holding an official government paper called "US Patent" in your hand...
        
        But I guess this will never happen, especially after the recent SCOTUS KSR decision...
        
        So, why don't you just shut up, dude, OK ?
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        Anonymous Coward, 3 Jun 2007 @ 2:53pm
        
        Re: Re: Re: Re: Re: Enough nonsense
        angry dude, the intelligence and success required to earn a patent do not preclude you from being a bottomfeeding prick.
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        Deserving Name, 25 Oct 2007 @ 12:10pm
        
        Re: Re: Re: Re: Re: Enough nonsense
        Dude - It is believed the word has its origins in the Irish word "Dúd", which means someone who looks or acts foolish or out of place.
        
        A patent troll commenting on a negative article about the patent system. I guess you could not have chosen a better suited name.
        
        Mr. Angry Dude SHUT UP! Go where your words mean something! Most likely that is not on the web so go talk to your mom or aunt, whichever you live with.
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      - Charles Griswold, 2 Jun 2007 @ 10:31pm
        
        Re: Re: Re: Re: Enough nonsense
        I had thought, however, that a vicious mocking might drive him away. We shall see.
        No such luck. *shrug* You win some, you lose some.
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DMM, 1 Jun 2007 @ 5:28pm

Mike, this is not a loophole ... this is an option that has existed for many, many years. The only difference is that it has now become a more attractive option for some patent holders.
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confused, 1 Jun 2007 @ 6:23pm

...
so does this "loop hole" apply to products manufactured outside the US or on products of companies based outside the US? I mean if a foreign company set up an office in the US would they bypass that?
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- Anonymous Coward, 1 Jun 2007 @ 6:46pm
  
  Re: ...
  No, the marketwatch link gave Kodak cameras as an example
  of an US-based company with products manufactured overseas.
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a known e-mouse, 2 Jun 2007 @ 5:44pm

mother always said
it's never a good idea to get in a pissing contest. ya see, even if you win, you still end up smelling like piss.

just realize that there are chowder heads in real life that never speak up 'cause they're chicken so they get online and, whamo, they flex their e-muscles.

just ignore the fools that don't make sense, like angry dude, because it's the fools that make sense that you have to look out for. them's is just plain dangerous.

but yeah, this loophole thing, both mike and dmm have it right. even if companies had the option of going to the itc before the supreme court ruling, why should they?

dmm's correct because:

this option was there before and is viable now. however, before the u.s. supreme court ruling, it was far easier to threaten with a u.s. court injunction as well as being a blanket injunction on domestic as well as foreign patents.

the cons about going to the itc instead of going to u.s. courts first, well, mike states them. the itc can only put injunctions on imported products to the united states, and not on domestic ones that might infringe a patent. so, that blocks that avenue of persuit for a good number of patent holders.

mike's correct because:

well, he wrote the story. heh, all humor aside, this is a loophole because it's a way of skirting a law, made by the u.s. government to stop or restrict a certain practice, legally in a way that is obscure and not readily apparent to everyone.

gosh i love loopholes, my accountant found me a really good one this past tax season, can't remember it, but it had to do with my car, got me most of my taxes back. heh, and i am in no way rich, he's a friend i went to school with.
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