Universal And Fox Sued Over Simpson's Theme Park Ride... By A Musicians' Union

Twitter Makes The Case That Trolls Should Have To Pay Legal Fees For Bogus Lawsuits

from the minor-bit-of-reform dept

Wed, Oct 10th 2012 4:21pm — Mike Masnick

Last year, we wrote about how Twitter won a ridiculous lawsuit against a patent lawyer, Dinesh Agarwal, who claimed to have patented "A method system for creating an interactive virtual community of famous people," also known as US Patent 6,408,309. The jury pointed out that Twitter didn't actually appear to infringe at all, which is all too common in these kinds of cases. At the very least, it was nice to see Twitter willing to fight this out. The way patent trolling works is that the trolls usually make it much cheaper to just pay them to go away than to actually fight it out in court. Twitter's Ben Lee is now writing about how ridiculous this is, and suggesting that it's time to fix this aspect of the system:

According to the American Intellectual Property Law Association (AIPLA)’s 2011 survey, an average patent lawsuit costs between $900,000 to $6,000,000 to defend. In the last month and a half alone, Twitter has received three new patent troll lawsuits. The law currently does not allow us to recover the millions of dollars in fees we spent to defend ourselves — nor does it compensate us for the time spent by many Twitter employees who worked on the case. The law only allows us to ask for certain types of minor fees, which is why the court was only able to order this particular patent troll to pay us $10,447.85.

Lee is writing more specifically to try to drum up support for the SHIELD Act, which we wrote about earlier this month, which would allow companies to ask for their attorneys' fees to be paid in cases, like this one, where there was no merit to the lawsuit at all. That bill has started to pick up some attention, and while it's doubtful it's going to go anywhere this year, hopefully with the new Congress next year there will be sufficient interest in at least fixing this one small part of the patent system. I've still yet to see any reasonable explanation for why this bill is a problem, since it would only impact completely bogus patent lawsuits.

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Filed Under: legal costs, patent trolls, patents
Companies: twitter

39 Comments

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dave blevins (profile), 10 Oct 2012 @ 4:33pm

Punish the trolls heavily
The award from the troll(patent and copyright suits) ought to be what the troll was trying to scam out of the plainiff (with interest from the filing of the suit thru the award). Jail time for CEO and COB until payment is made.
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Anonymous Coward, 10 Oct 2012 @ 5:02pm

What????

How can this be right? So if you own a patent you can effectively ruin a business just by involving them in a lawsuit.

This is the most ridiculous thing I have every heard, I have always thought you can recoup all cost from failed law suits...

how is the even close to fair????
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Anonymous Coward, 10 Oct 2012 @ 5:14pm

Canada uses a "loser pays" system. As I understand it, if the judge rules that one side clearly has no case, he can order the loser to pay all legal fees.

As a result if that, plus Canadian judges that actually take time to understand what they are looking at, legal trolling is nonexistent in Canada.
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Spaceman Spiff (profile), 10 Oct 2012 @ 5:15pm

Re: Punish the trolls heavily
Also, make them pay 3x costs that the defendants incurred, or 2x what they were trying extort, or both... That would shut down this sort of crap PDQ.
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Anonymous Coward, 10 Oct 2012 @ 5:18pm

Response to: Anonymous Coward on Oct 10th, 2012 @ 5:14pm
Also, judges in Canada are appointed by committee, and sit until they retire, so they are not afraid of making difficult and/or controversial rulings.
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JohnParry, 10 Oct 2012 @ 5:20pm

Trolls
To fix the system is will take a big GOP win this Nov -- the House, the Senate and the Presidency.
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Anonymous Coward, 10 Oct 2012 @ 5:22pm

Troll Toll
So, can I get the troll at my local bridge to pay me the cost of driving the long way home to avoid paying the bogus toll charged for using the trolls bridge? I sure hope so, since it is a really mean troll and much easier to pay off than to fight.
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Anonymous Coward, 10 Oct 2012 @ 5:23pm

Lee is writing more specifically to try to drum up support for the SHIELD Act, which we wrote about earlier this month, which would allow companies to ask for their attorneys' fees to be paid in cases, like this one, where there was no merit to the lawsuit at all.

If they have no merit (like this one) you should be able to get it dismissed long before a trial. Obviously, the judge found merit.
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Anonymous Coward, 10 Oct 2012 @ 6:22pm

I hope that SHIELD act passes. Maybe then people could start new businesses without being afraid of being sued into oblivion (even if the judge eventually finds them not guilty). If people could actually start new businesses again, maybe the unemployment rate would drop back down a bit.
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Anonymous Coward, 10 Oct 2012 @ 6:48pm

The problem here is that a shield law may end up being like the safe harbor provisions of DMCA - they aren't used just defensively, but rather used offensively to define business models.

Making it significantly harder and riskier for a rights holder to try and enforce their rights isn't exactly a positive thing. You have to remember in these lawsuits the plaintiff also has expenses, they have to build the case and such. It's not just a $100 filing and have a nice day. For the most part, if they are actually filing the lawsuit (rather than just sending a legal letter) they are convinced enough of their rights that the feel they can win.

Again, this is a story that gets back to the issue of the legal process in the US, and not about patents or copyright. It's just too expensive to go to court, it's too complex, and the lawyers too expensive. Address the issues of the complexity of defending in a lawsuit like this, and you resolve most of the issues at hand.

It's a double win, because if you find a way to lower the costs of defending against such a lawsuit, you also end up taking away the "it's cheaper to settle" angle that true patent and copyright trolls play in.

Mike, perhaps you want to re-aim your politican power towards changing the legal system, rather than putting more band-aids on it.
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Capt ICE Enforcer, 10 Oct 2012 @ 6:51pm

laws passed
God. You of all people should know to pass any laws in the US. You need to add. "Protect Our Children". Yeah are you all new. Or maybe "Keep US safe from Russian hackers and destroy the music business protection act."
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Anonymous Coward, 10 Oct 2012 @ 6:56pm

Re:
Not necessarily.

The judge himself/herself cannot invalidate a patent without a trial. So a judge willing to hear the case doesn't automatically mean he/she think the patent holder have merit.
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Anonymous Coward, 10 Oct 2012 @ 7:13pm

A fair summary of problems associated with the act can be found at http://www.ipwatchdog.com/2012/08/26/here-they-go-again-this-time-with-the-patent-shield-act/id=2747 6/
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That Anonymous Coward (profile), 10 Oct 2012 @ 7:14pm

Re:
Because it helps innovation... in new legal tricks.
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That Anonymous Coward (profile), 10 Oct 2012 @ 7:17pm

Re: Trolls
Yes because they have a proven track record of doing things for the right reason not based on who pays them the most.

Both sides are scum, but I didn't see them running to keep the government from shutting down. They enjoyed running the country to the brink to prove they were better... We need elected leaders who behave like adults not like 10 yr olds in a pissing contest.
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That Anonymous Coward (profile), 10 Oct 2012 @ 7:23pm

Re:
Yeah like the perjury penalties in DMCA take down notices. Those are supposed to keep them from filing bogus ones... and MS still tried to censor Bing.

Making them enforce their rights has always been a problem, they want everyone else to foot the bill for it. They scream they lost all sorts of money but you have to pay to fix it for them.

Patent troll whine how much money they lost by their patent being infringed upon, but they did nothing beyond file it and wait for someone to get close. They are not in the market and merely hold an "idea" hostage with poorly worded documents rubber stamped by people who couldn't find prior art with both hands and a map of their ass.

Lawyers make it worse, selling the idea your losing imaginary dollars that they can help you get back. Maybe its time to make the loser pay, invalidate patents, pass a law saying if you paid fees for a patent declared invalid you get your cash back.

The system is broken, this might not be the perfect fix but to pretend we don't currently have patent lawsuits used as weapons by big business and trolls is silly. Or do you not read news about Apple.
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Cerberus (profile), 10 Oct 2012 @ 7:43pm

Re: Re:
"...pass a law saying if you paid fees for a patent declared invalid you get your cash back."

Very interesting suggestion. This could be a great way to beat some sense into the patent office!
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Anonymous Coward, 10 Oct 2012 @ 7:50pm

"I've still yet to see any reasonable explanation for why this bill is a problem, since it would only impact completely bogus patent lawsuits."

because the entire IP system itself is bogus and its entire purpose is to be bogus.
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Cerberus (profile), 10 Oct 2012 @ 7:59pm

Re:
I'm not sure I find that summary "fair". The author does raise the valid point that "losers pays all" should be relevant not only for patent cases; but then nobody said it shouldn't. The issue is just that changing this just for patents is less intrusive and more likely to get a majority.

Why just pick patents?, the author asks: "In other words, the bill�s premise is that the protections and remedies under existing law � which for years have protected against fraud, abuse and bad faith � are now considered inadequate!" This is indeed just what the premise is, and it seems correct. Patent trolling is a big problem, where defendants are forced into settlements, because the costs of the lawsuit are too high (often millions).

So this law is a surgical instrument to remedy a particularly egregious canker.
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arcan, 10 Oct 2012 @ 8:50pm

Re: Re:
maybe the patent office got an early version of apple maps to find prior art with?
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Scott, 10 Oct 2012 @ 9:22pm

I believe that copyright and patient trolls should face extortion charges for their bogus claims,What they're doing is a clear case of extortion.
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Anonymous Coward, 10 Oct 2012 @ 9:38pm

If I spent millions on defending myself from a obvious scam and only was able to recover 10k I would go postal. I would go to the nearest Walmart and buy me a foam noodle and beat the fucking troll to death with it.
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Anonymous Coward, 10 Oct 2012 @ 9:38pm

Re: Re:
Academic research by persons such as Michael Risch (there are others as well) resulted in conclusions that the "egregious canker" of trolls is not anywhere near, if at all, the problem that the principals here and elsewhere make it out to be. Thus, what you call a "surgical instrument" is anything but that, and proposes a cardinal change to longstanding US law that distinguishes it from UK law, thereby enabling greater access to the courts than would otherwise be the case.
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Atkray (profile), 10 Oct 2012 @ 9:59pm

Re: Trolls
To fix the system we need a bunch of Techdirt readers who get hammered by Murphy's law to go get some patents with the intent to rake in the cash becoming patent trolls. As soon as a few of us have everything lined up to stert sending out the extortion ummm I mean settlement letters, this law will sail through.
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Anonymous Coward, 11 Oct 2012 @ 1:43am

more than anything, it will be the entertainment industries that will fight against this or similar bills. they make thousands of false take downs per year, doing untold harm to innocent people and web sites. they see nothing wrong with doing that and they wont want to pay anything for doing that. they also refuse to pay for anything that they want done to curb sharing of files that they say is done illegally, expecting everyone else to foot the bill to keep their useless business model afloat. so, as long as someone else foots the bill for what the industries want done to combat what they see as wrong, it's fine. if they get charged for doing what others see as the industries doing what is wrong, it's not fine. hypocrisy at it's finest
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Mike Masnick (profile), 11 Oct 2012 @ 2:03am

Re:
If they have no merit (like this one) you should be able to get it dismissed long before a trial. Obviously, the judge found merit.

That's a lot more difficult (and expensive) in patent cases for a variety of mostly procedural reasons. It happens, but it's rare for patent cases to be kicked out on a motion to dismiss.
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Ninja (profile), 11 Oct 2012 @ 3:22am

While the Shield Act would fix this specific issue I do think everybody should be pushing for a complete review of the patent system...
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Anonymous Coward, 11 Oct 2012 @ 4:52am

Bogus IP law suites
A troll could use front companies to avoid actually paying any cost awarded against them. A general principle should be that the people responsible for bringing such cases should be held personally responsible for costs awarded against their companies. This should include those who commission companies to act on their companies behalf, and lawyers who should recognize invalid claims.
The actions of companies is the direct responsibility of the board, and they should not be able to dodge responsibility by hiding behind the company. Also lawyers should be held responsible for bringing suites that have no merit, as they should have advised their clients of this fact, and refuse to simply obey orders.
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Anonymous Coward, 11 Oct 2012 @ 5:39am

Re: Trolls
The only major difference between the two parties is spending/taxing priorities.

On just about everything else including IP, copyright, internet, security, freedoms, etc. they're so close as to be indistinguishable.
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Anonymous Coward, 11 Oct 2012 @ 5:58am

Re: Re: Re:
And a cardinal change is bad for the sake of change, or because it distinguishes it from UK law? Why are either of these a bad thing? When did US and UK law have to mirror each other? I never got that memo.

Just because you allege its less severe doesn't make the act any less of a "surgical instrument." I don't see how that makes any sense. It would be less surgical if perhaps it didn't do what it was intended to do and caught others out. Maybe it SHOULD bring risk to these people who hold monopoly power over ideas. Then they wouldn't be so quick to sue, and maybe, just maybe, bring suits that absolutely have merit and they will think twice about bringing them.

Greater access to courts is also bad? For who? The defendant or the plaintiff?
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abc gum, 11 Oct 2012 @ 6:13am

Re: Trolls
You forgot the SarcMark (tm)
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nospacesorspecialcharacters (profile), 11 Oct 2012 @ 6:34am

Re: laws passed
Just call them cyberpatents!
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nospacesorspecialcharacters (profile), 11 Oct 2012 @ 6:48am

Treat the cause not the symptom
New laws always appear to me as papering over the wallpaper used to paper over cracks.

Plus large corporation have budgets for legal departments. They don't just pay these suits to file suits, they pay them to actively look for loopholes and alternate interpretations of existing laws. They won't just assert that black is white, they'll assert that white is merely a different shade of black - and if they can get a judge, jury and few dozen lawyers to argue over that long enough to drain a company or individual of all their resources then that's good money well spent.

It's practically guaranteed that within 5 years either the same trolls or some entirely new trolls will have found a way to use this new INSERT ACRONYM Act to either suppress competition or convert it to danegeld.

What's needed is to deal with the underlying causes of what creates trolls in the first place. Such things as 'owning' ideas without needing to invent anything. Allowing said ideas to be traded for money. Classifying abstracts as property. Start there.
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Anonymous Coward, 11 Oct 2012 @ 9:34am

Re: Trolls
"To fix the system is will take a big GOP win this Nov -- the House, the Senate and the Presidency."

Actually, since most "patent trolls" are companies supporting Republicans, only Democrats can save us now!
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Vic Kley, 11 Oct 2012 @ 10:24am

Masnick Seeks More Money and Power for his Wealthy Overlords
The Shield Act provides an opportunity for Judges to award fees to defendents but does nothing for plaintiffs.

It is a defendants law, lobbied by wealthy. large corporations and further tilts an already all to tilted playing field to lock out small start-ups and individual inventors.

Large companies frequently win patent battles because they have deep pockets to pay for an overwhelming legal advantage. Companies that do so can lose having brought the plaintiff to the brink of bankruptcy. Where is the opportunity for enhanced fees recovery in the Shield Act for the plaintiff?

Twitter like most things was invented by one person I believe. Now that it is a business success it wants a government right to discourage small entities and individuals from seeking compensation for their respective inventions. That's called UNFAIR ADVANTAGE Twitter and you can't have it, and if you had any sense of justice you would not ask for it. Seek a balanced approach that rewards valid inventors and valid defenders equally.

Troll is just a name Masnick and other prevaricators of the big lie campaigns have made up to try to malign inventors whose works have not been acquired by large corporations or universities or other high paying Masnick clientele.
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Anonymous Coward, 12 Oct 2012 @ 5:18am

"2011 survey, an average patent lawsuit costs between $900,000 to $6,000,000 to defend."

you call that an AVERAGE figure ??? idiots, how on earth could anyonen claim that is an average figure !!! it's a range of costs, but it's not an average..

please masnick try to stick to the facts, if you can.. or go back to school..
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Anonymous Coward, 12 Oct 2012 @ 5:21am

Re:
an average is ONE VALUE, that is all the values added together and divided by the number of values you started with.. 900k to 6 mill therefore is possibly a "typical range", but having two values 6 orders of magnitude difference tells the reader NOTHING !!!..

Masnick, can you do anything right ? why are you not questing your own 'sources' for accuracy ??
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Anonymous Coward, 12 Oct 2012 @ 8:54am

Re: Re:
English must not be your first language.

"Average" in this case means "typical" rather than a mathematical average. Meaning, a typical patent lawsuit costs $900,000 to $6,000,000 to defend.
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Mike, 6 Nov 2012 @ 9:07pm

why not contempt?
Why can't a judge view these egregious troll cases as contempt? I.e., If you call the troll's bluff and actually go to court the judge could cite the troll for contempt for wasting the courts time, etc.

I'd love to see that, but I don't know if there is precedent for civil court judges to do that sort of thing.
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