Patent Troll Mantra: Sue First, Ask Questions Later

from the that's-efficient dept

Tue, Jun 1st 2010 6:50pm — Mike Masnick

We've talked about Erich Spangenberg a few times on the blog before. He's become one of the more aggressive patent hoarders out there, buying up patents, putting them in one of a huge list of shell companies and suing everyone he can think of, especially Google, (oh, and his wife has focused on suing Google over questionable trademark issues as well...). Spangenberg has gotten into some trouble for shuffling patents around, even suing companies multiple times over the same patent, despite promises not to do so.

Law.com now has an article about a recent panel discussion that included Spangenberg, where he explained that it was always better to sue first, without first contacting a company about licensing or alerting them to the fact that you believed their products infringed. Why? Because he's afraid that if you contact them first, they'll sue for declaratory judgment, and that would suck, because those lawsuits won't take place in Spangenberg's favorite court in East Texas. Why does he like East Texas, by the way? Because the folks there just love handing out huge awards. While recent reports said that Florida may be more favorable in winning lawsuits, Spangenberg thinks they'll give lower awards:

"Unfortunately you have a buch of retirees [on Florida juries], so your award is going to be around a couple hundred grand,"

At some point, isn't someone going to realize that folks like this are clearly abusing the legal system for profit, well outside of the intent of patent law? Just the fact that he admits he sues first before any sort of communication shows that he's abusing the system. There's no real interest in licensing, outside of licensing at the end of a lawsuit-shaped gun barrel. Of course, don't expect the current neutered attempt at patent reform to fix anything. When asked about it, Spangenberg correctly notes that it won't change anything.

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Filed Under: erich spangenberg, lawsuits, patents

19 Comments

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Anonymous Coward, 1 Jun 2010 @ 7:23pm

"they'll sue for declaratory judgment, and that would suck, because those lawsuits won't take place in Spangenberg's favorite court in East Texas."

Our patent system has turned into such a joke it's not even funny.
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Anonymous Coward, 1 Jun 2010 @ 7:36pm

The entire system of jury awards is broken. Guidelines need to be set pronto. In an infringement case involving idea patents the award should be less than the equivalent of the value contributed to the resulting product.

If someone wants to start down the real property road, just raise the ol' how much dose someone that "steals" a bicycle have to pay in punitive?
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sethumme (profile), 1 Jun 2010 @ 8:16pm

And here I always assumed the entire point of the patent system was so that each county could decide for itself how it was going to interpret the federal regulations, thereby creating favorable havens for patent lawsuits - you know, like Delware did for corporations...

Honestly, is there a SINGLE congressperson that thinks the patent system is fine as is?
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sethumme (profile), 1 Jun 2010 @ 8:16pm

And here I always assumed the entire point of the patent system was so that each county could decide for itself how it was going to interpret the federal regulations, thereby creating favorable havens for patent lawsuits - you know, like Delware did for corporations...

Honestly, is there a SINGLE congressperson that thinks the patent system is fine as is?
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abc gum, 1 Jun 2010 @ 8:17pm

Re:
"In an infringement case involving idea patents"

Ideas are not supposed to be patentable.
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DMNTD, 1 Jun 2010 @ 8:27pm

Still don't..
we can interpret all day long what the law actually says and what it was meant to do..but money talks..never listens.
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NAMELESS ONE, 1 Jun 2010 @ 8:29pm

and you want canada to have the same system
haha
it is a joke and your trying to export the madness through bribes to politicians making them traitors to there own people
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Anonymous Coward, 1 Jun 2010 @ 8:40pm

Re: and you want canada to have the same system
We're discussing patents, Mr Troll. Not copyright. Patents. At least get your head out of your ass long enough to understand the discussion.
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Anonymous Coward, 1 Jun 2010 @ 10:04pm

"Just the fact that he admits he sues first before any sort of communication shows that he's abusing the system."

How do you figure? There are all sorts of reasons why forum shopping is discouraged, but if there's a risk the defendant is going to do the same (via a declaratory judgment suit in its hometown forum), I don't see why filing suit and trying to work out a license after it's filed necessarily shows abuse.
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Anonymous Coward, 1 Jun 2010 @ 11:07pm

Re:
When it comes to patents I think the law should favor the defendants and allow them to chose which forum to use (either the one they're in or the one the plaintiff is in). Patents really aren't all that important to society, in fact they only seem to harm society, and the risk and reality of forum abuse is much more damaging to society.

"I don't see why filing suit and trying to work out a license after it's filed necessarily shows abuse."

When the only place it's being filed by the plaintiff is in East Texas, vs various defendants filing from various areas that they reside, it's pretty much abuse.
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Anonymous Coward, 1 Jun 2010 @ 11:16pm

Re:
and the fact that the plaintiff is in a better position to venue shop and they abuse that position is also wrong and needs correcting.
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out_of_the_blue, 2 Jun 2010 @ 5:34am

Separate out the patents for a second.
Then: venue shopping is inherent with mega-corporations that are everywhere and nowhere. Technically, plaintiff is suing in home district. I'd prevent abuse by having long residency requirement of company officers.

Declatory judgment should be outlawed; all cases filed, even traffic infractions, should go to jury trial. That simple rule would eliminate just nearly all of what I regard as tyranny and unmerited cases, but I'm sure lawyers will say it can't be done.

But so long as the system is as it is, then filing first to avoid declatory judgment is fine with me as a tactic to get to a jury in "home" district.

Now, as to the patents -- the system is broken so many ways that I won't bother to care. The overarching concern is that The System is by and for The Rich, so everyone needs a good dose of Populism to just take *all* the crooks down without regard to niceties, it's the only way to ever unscrew a system. -- A bas le roi! A la guillotine!
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a-dub (profile), 2 Jun 2010 @ 8:02am

He is abusing the system. Sensible people will try to resolve the issue without involving the courts because once something goes to trial, the end result is always an unknown. Even if you have a very good case, there is a level of uncertainty about the outcome. The court system should be a last resort...not the starting point. It would be nice to see a judge ask the plaintiff what efforts have been made prior to litigation...and then factor that into the end result. If no prior effort was made, then reprimand the plaintiff and dismiss the case.
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Anonymous Coward, 2 Jun 2010 @ 9:23am

Re:
The problem is this, while there is a level of unknown the legal system favors the plaintiffs, especially if the plaintiffs are non practicing patent trolls who do nothing to innovate but merely take money from those who do innovate and hence can't get counter-sued for infringement since they do nothing to get sued for. The punishment for filing a bogus patent suit is minuscule compared to the punishment for infringement and so what are the risks for the plaintiff vs the risks for the defendant?
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Anonymous Coward, 2 Jun 2010 @ 9:37am

Re: Re:
Why should the law favor defendants in patent cases moreso than all other cases?

I don't agree with your assertion re: the importance of patents to society, but regardless, I don't think creating one-off forum selection law for patents is the answer even if it's true.

Certainly E.D. Tex. is a...unique...situation, and the Federal Circuit Court of Appeals has begun smacking the district court judges down a bit w/r/t forum issues.
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Anonymous Coward, 2 Jun 2010 @ 9:39am

Re: Separate out the patents for a second.
"all cases filed, even traffic infractions, should go to jury trial"

This would totally screw the little guy defendant/plaintiff.
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Anonymous Coward, 2 Jun 2010 @ 9:40am

Re:
I agree with your general sentiment, but if taking the otherwise most reasonable path puts you at a significant tactical disadvantage, I don't think it's necessarily "abuse" to say "You know what? I'm not taking that risk based on my hope that the (alleged) infringer will be reasonable also."
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Anonymous Coward, 2 Jun 2010 @ 1:01pm

"Forum Shopping", "Declaratory Judgment Action Avoidance", etc. are terms that tend to take peoples' eyes off the ball.

The simple fact of the matter is that by treating patents as nothing more than "negotiable instruments", and not as a means directed towards what will hopefully be the introduction of a new product/service to the public, the basic underpinnings of patent law are cast aside.

Fortunately, persons trying to turn a quick buck are a very, very small minority of patent holders. Even so, in my view just one such person is one too many.
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staff, 2 Jun 2010 @ 3:41pm

fraud on America
"Sue First"

Patentees used to contact infringers first and offer a license, but with the change in the law that's too risky. Small patentees could now have large infringers sue them for a declaratory judgement in some federal district where it will take years to get to trial and where judges hate patent cases and are all too eager to get those cases off their dockets.

Next time, aim then shoot.

Patent reform is a fraud on America. It is patently un-American.
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
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