Chief Patent Judge Speaks Out Against Patent Trolls
from the could-have-done-it-earlier... dept
In the past, we've criticized Judge Randall Rader, the chief judge of the court of appeals for the federal circuit (CAFC), which, among other things, handles all appeals on patent cases, for being completely out of touch with the ways in which our patent system is broken. His statements seemed to indicate a complete lack of recognition for how patent trolling and bogus patent lawsuits were causing all sorts of trouble for innovation. So it's encouraging -- but surprising -- to see Judge Rader team up with professors Colleen Chien and David Hricik -- who have studied problems with patents and patent trolls -- to write a NY Times op-ed piece about the problems of patent trolls. Yes, the chief judge of the court that handles patent cases is now openly calling them trolls and complaining that they're a problem. This is good.The onslaught of litigation brought by “patent trolls” — who typically buy up a slew of patents, then sue anyone and everyone who might be using or selling the claimed inventions — has slowed the development of new products, increased costs for businesses and consumers, and clogged our judicial system.What's interesting, is that the rest of the op-ed mainly focuses on the question of fee-shifting. As we've discussed, President Obama's patent plan includes plans to make it easier for those who bring bogus patent lawsuits to have to pay attorneys' fees, and there are already a few proposals in Congress that include similar provisions. But the op-ed points out that judges already have this power, and just don't use it very often. So, he's suggesting that judges "look more closely" at patent cases, to see if there's abuse by trolls, and if they ought to use Section 285 of the Patent Act.
Their business plan is simple: trolls (intellectual-property lawyers use less evocative terms like “non-practicing entities” and “patent-assertion entities”) make money by threatening companies with expensive lawsuits and then using that cudgel, rather than the merits of a case, to extract a financial settlement. In the apt summary of President Obama, who on Tuesday announced a plan to stave off frivolous patent litigation, trolls just want to “hijack somebody else’s idea and see if they can extort some money.”
To make sure Section 285 is implemented with appropriate vigor, judges must look more closely for signs that a patent lawsuit was pursued primarily to take improper advantage of a defendant — that is, using the threat of litigation cost, rather than the merits of a claim, to bully a defendant into settling.While this is an interesting point, I'm not sure it's really that relevant. First of all, Section 285 reads (in its entirety):
One sign of potential abuse is when a single patent holder sues hundreds or thousands of users of a technology (who know little about the patent) rather than those who make it — or when a patent holder sues a slew of companies with a demand for a quick settlement at a fraction of the cost of defense, or refuses to stop pursuing settlements from product users even after a court has ruled against the patentee.
Other indications of potential bullying include litigants who assert a patent claim when the rights to it have already been granted through license, or distort a patent claim far beyond its plain meaning and precedent for the apparent purpose of raising the legal costs of the defense.
The court in exceptional cases may award reasonable attorney fees to the prevailing party.But that's the thing: these kinds of trolling efforts are not "exceptional." They're increasingly the norm, as was noted in the very same op-ed.
Also, you'd think that, as the chief judge on the court that handles all patent appeals, Judge Rader would have had a chance to not just do what he suggests judges should do... but to create a precedent for district courts to adhere to on that point, rather than just writing about it in the NY Times.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: cafc, colleen chien, david hricik, fee shifting, patent trolls, patents, randall rader
Reader Comments
Subscribe: RSS
View by: Time | Thread
Fee shifting solutions are at best a bandaid on a fundamentally broken patent system.
[ link to this | view in chronology ]
Re: Fee Shifting
[ link to this | view in chronology ]
Re: Re: Fee Shifting
Trial level judges are imbued with a great deal of discretion, and barring a clear abuse of discretion it is not the role of appellate judges to interfere.
Rader is correct that precedent does exist in the form of case law, statutes and court rules. Because he sits at the appellate level all he can do is encourage trial courts to take advantage of what precedent allows. Rader's comment does, however, provide a signal to trial courts that they are less likely to be reversed for abuse of discretion should a decision they render be presented to the Court of Appeals for the Federal Circuit.
[ link to this | view in chronology ]
Re: The Judge caused a lot of the problems he complains about
When Rader made it so that the defense bar could sue any patent owner anywhere simply for the patent owner asking for a license, it became open season for the Patent Infringers on the patent owners.
Once patent owners saw that they could be sued anywhere anytime, they realized the only option was to shoot first and then ask questions - it became the new paradigm - sue for infringement before you are sued for invalidity.
Just track the number of Petitions for Declaratory Judgement and patentee filings since that ruling and you will see what I am talking about.
It changed the whole dynamic of the Patent World:
We used to have a civilized system of dialog, exchange, etc., before any shots were fired; usually litigation was a last resort.
The question is, how much of the patent litigation chaos in courts is due to the actions, the decisions, of the courts themselves? How much of the increase in patent litigation that Judge Rader complains about, in this op-ed piece, is due to court decisions such as Medimmune that are solely the responsibility of Judge Rader and his colleagues?
[ link to this | view in chronology ]
Judges actually do tend to follow statute...
Oh, previously he was "completely out of touch", but NOW thanks to Mike's criticism he's seen the error of his ways. It must be frightening to have that much power. -- This preening by Mike is what prompted my subject line: judges are constrained by statute, but many actually try to be fair and honest despite that. -- Any gov't system is intentionally evil and even honest efforts within it can't fix the basic flaws.
ANYHOO, SO, Mike, NOW is the time you tell us how to fix it? Or are YOU TOO just writing about problems? -- And getting money just for that, so why would you want to fix it?
Take a loopy tour of Techdirt.com! You always end up same place!
http://techdirt.com/
Even if Mike is absolutely right about problems, he has no solutions to even suggest.
05:12:53[g-145-8]
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
[ link to this | view in chronology ]
Re: Judges actually do tend to follow statute...
Nope, we never write about how to fix the system. Never. Except, you know, all the times we have.
http://www.techdirt.com/articles/20110819/14021115603/so-how-do-we-fix-patent-system.shtml
[ link to this | view in chronology ]
Re: 05:12:53[g-145-8]
Is Out_of_the_Ass really just a bot?
Is this someones idea of a Turing test?
Inquiring minds don't much give a damn, but I'm curious...
[ link to this | view in chronology ]
Re: Re: 05:12:53[g-145-8]
It's Blue's silly homebrew version of DRM. It's about as effective as any DRM. As in: NOT.
I still have trouble telling the "fake" OOTB's from the original since they all spout crazy crap. I feel the fake ones are at least sane since they are doing it for the lolz.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Rader will be recused from all 'troll' cases in the future
He latest opinion in Alice v. CLS in which he critisized 'bright line test' and the resulting confusion showed his bad judicial discretion. The only people who liked that decision are patent litigators because the confusion gives them something more to discuss/debate in court. http://tinyurl.com/cr2fw34
[ link to this | view in chronology ]
[ link to this | view in chronology ]
To me this guy is even further from ideal as a higher level judge.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Judge Rader caused a lot of the problem that he complains about
There's a more clear explanation for the proliferation of troll lawsuits, and Rader knows he's to blame so he tries to deflect the conversation: the Medimmune case.
When Rader made it so that the defense bar could sue any patent owner anywhere simply for the patent owner asking for a license, it became open season for the Patent Infringers on the patent owners.
Once patent owners saw that they could be sued anywhere anytime, they realized the only option was to shoot first and then ask questions - it became the new paradigm - sue for infringement before you are sued for invalidity.
Just track the number of Petitions for Declaratory Judgement and patentee filings since that ruling and you will see what I am talking about.
It changed the whole dynamic of the Patent World:
We used to have a civilized system of dialog, exchange, etc., before any shots were fired; usually litigation was a last resort.
The question is, how much of the patent litigation chaos in courts is due to the actions, the decisions, of the courts themselves? How much of the increase in patent litigation that Judge Rader complains about, in this op-ed piece, is due to court decisions such as Medimmune that are solely the responsibility of Judge Rader and his colleagues?
[ link to this | view in chronology ]
more dissembling by Masnick
“patent troll”
infringers and their paid puppets’ definition of ‘patent troll’:
anyone who has the nerve to sue us for stealing their invention
The patent system now teeters on the brink of lawlessness. Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to stop or pay”. This is just dissembling by large invention thieves and their paid puppets to kill any inventor support system. It is purely about legalizing theft. The fact is, many of the large multinationals and their puppets who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so. To them the only patents that are legitimate are their own -if they have any.
It’s about property rights. They should not only be for the rich and powerful. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they included inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity and the jobs the commercialization of those inventions bring. For 200 years the patent system has not only fueled the US economy, but the world’s. If we weaken the patent system we force inventors underground like Stradivarius (anyone know how to make a Stradivarius violin?) and in turn weaken our economy and job creation. Worse yet, we destroy the American dream -the ability to prosper from our ingenuity for the benefit of our children and communities. Who knows who the next Alexander Graham Bell will be. It could be your son or daughter. It could be you. To kill or weaken the patent system is to kill their futures. Show me a country with weak or ineffective property rights and I’ll show you a weak economy with high unemployment. If we cannot own the product of our minds or labors, what can we be said to truly own. Life and liberty are fundamentally tied to and in fact based on property rights. Our very lives are inseparably tied to our property. Large multinational corporations are on the brink of destroying the American dream -our ability to pull ourselves up by our bootstraps from the working classes by building our own companies while making better futures for our children and our communities.
Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back into the patent system with injunctions fully enforceable on all infringers by all patentees, large and small.
Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.
For the truth about trolls, please see http://truereform.piausa.org/default.html#pt.
http://www.hoover.org/publications/defining-ideas/article/142741
http://ssrn.com/abstract=1792442
[ link to this | view in chronology ]
Patent trolls and "exceptional" cases.
However, confusing "exceptional" as used by the courts, as opposed with common understanding, is not helpful. There is a very great difference, and such cases would be "exceptional", even if "everyone does it".
[ link to this | view in chronology ]