The Day All The Patent Trolls Rushed To File New Lawsuits

from the because-of-fee-shifting dept

Mon, May 5th 2014 1:11pm — Mike Masnick

The Senate is still working on patent reform, despite the House approving it months ago. However, you can be sure that patent trolls and their lawyers have been watching the space carefully. One of the proposed amendments on the Senate side would concern fee shifting -- making the losing party have to pay the winning party's legal bills -- and in the amendment it says it would go into effect, on April 24, 2014. Even though the bill has not yet gone anywhere and the amendment may not make it, it would appear that trolls and their lawyers (often one and the same) realized that if they wanted to avoid fee shifting, they'd better get filing. And, boy, did they ever file a lot of patent infringement cases on Wednesday April 23rd: 190 cases. In case you're wondering, the day before 8 patent cases were filed.

But just that number alone might not give you enough perspective to understand this mad rush to the courts (or, well, as we'll see, one court in particular) to file patent lawsuits. The good folks over at Lex Machina have put together some data to show just how noteworthy all those patent lawsuit filings are. Here are the daily patent lawsuit filings for the first four months of 2014. Notice any particular outlier?

Of course, trolls have known that fee shifting was a possibility for a while now, so it's not like they suddenly realized it might be good to get lawsuits in just under the wire. So Lex Machina also went back a few years and looked at the weekly filings of patent lawsuits. You might notice a bit of a trend leading up to the massive outlier:

And, with so many filings, they should be distributed widely around the country, right? It's not like trolls play a silly jurisdiction shopping game in which they all try to file in one random obscure court in eastern Texas, right? Well, let's look at where most of those 190 cases were filed:

Oh, and if you're wondering why the district court in Delaware seems to be fairly popular too, I'm guessing some research by Mark Lemley may have something to do with that. He compared patent cases in various districts and found that, for cases that actually go to trial, Delaware had a higher win rate than East Texas. Oh, and also that a far higher percentage of patent cases actually go to trial in Delaware as well. East Texas still gets the majority of cases (by far), but Delaware has been the alternative favorite for trolls for quite some time now.

Of course, this also shows that trolls know they have questionable claims and that they fear fee shifting mightily. It's why any patent reform bill needs strong fee shifting provisions to deal with such bogus lawsuits.

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Filed Under: delaware, east texas, fee shifting, lawsuits, patents

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That One Guy (profile), 5 May 2014 @ 12:55pm

Driving innovation like a broken engine
So a massive filing of lawsuits the day before a fee-shifting provision comes into effect, one that would allow those found to be filing bogus patent lawsuits(or, let's just call them what they are, 'shakedowns') to be penalized by being forced to pay the defendant's legal fees, in two courts well known across the US and likely abroad as being very patent friendly...

Can anyone who doesn't have a vested interest in protecting such shakedown schemes claim this is some sort of 'accident' or 'coincidence'? Because it's pretty freakin' clear to me, the ones filing all these lawsuits know full well that if their targets are able to fight back, without having to worry about the legal fees if they win, then they are going to get curb-stomped by any reasonable court, hence the mad rush shown here.
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Anonymous Coward, 5 May 2014 @ 1:37pm

Re: Driving innovation like a broken engine
Clearly not coincidence - but the negative effect here is that companies that may have been still weighing whether a patent lawsuit was going to be worth pursuing may have opted to go for it rather than "wait and see".

In other words, some of these lawsuits may have been hastily filed with a "might as well do it now to see if we can pull it off" even if they didn't really know that it was going to be worthwhile anyway.

In any case, I suspect this will have some silver lining - as these hastily-filed suits are probably going to be of even worse average quality than usual - and we'll see an even stronger reason to reform patent litigation in the future as these pan out.
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Anonymous Coward, 5 May 2014 @ 2:35pm

Of the people, by the people, for the people? We are a nation of laws? This is a free country? We do live in a democracy? Don't mess with Texas? Seems that for every answer I get two more questions arise. I would insert a lawyer joke here, but when I consider what doctors pay in malpractice insurance, the answer is mute.
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Anonymous Coward, 5 May 2014 @ 2:53pm

With the Octane decision last week concerning the award of attorneys fees, and as it has since been applied in Highmark and Kobe, it would be disconcerting to change fee awards from the US system for all to the US system for some...but not all.

The cases address the fundamental concern that led to the proposed provision in the bill, but do so in a way that retains vitality of the reason that underlies the US system.

The provision has been, or so it seems, OBE and should be stricken from the bill.
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Roger Strong (profile), 5 May 2014 @ 3:09pm

Interesting Precipitation
If the US ever announces a moratorium on drone strikes, you'll want to spend the day before it takes effect deep underground. On another planet.
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Anonymous Coward, 5 May 2014 @ 5:17pm

Time to Amend the Amendment...
The Senate should now do three things:

1) Make a list of the people, companies, whomever, that filed on the 23rd and publish it to the public so we know who the trolls are.

2) Change the amendment to make the fee shifting retroactive to April 1, 2014.

3) Pass the damn bill.
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Anonymous Coward, 6 May 2014 @ 4:30am

Filing cases to avoid fee shifting is common sense, regardless of whether the case is bogus or not.

Patent cases can be very unpredictable, for example an unexpected, obscure document could invalidate an otherwise perfectly reasonable-looking patent. If filing the case a bit earlier will significantly reduce the cost of losing, why wouldn�t you file earlier, even if you are confident of your position?

That said, I�m happy to believe that the huge spike in filings has a lot to do with patent trolls.
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Tom Gallagher, 6 May 2014 @ 7:04am

Fee Shifting
An award of fees and costs is always available in every litigation in the US, if the judge orders it. They rarely do. There has been long debate over decades whether we should adopt the "English System" where the loser always pays the winner's expenses.

One of these patent reform bills speaks to awarding fees and costs only to losing plaintiffs. If the accused patent infringer loses, they don't have to pay the patent owner's fees and costs, which can be significant and sometime more than the actual damages award.

Patent litigation is the most expensive litigation there is and only a fool would start an infringement suit without thinking that they had a very good chance of winning.
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staff, 6 May 2014 @ 8:08am

more dissembling by Masnick
All Masnick and his monkeys know about patents is...they dont have any.

Can you say �dissemble�?

Property rights and jobs in America are now hanging from a frayed thread. Congress and the White House continue to follow the lead of their multinational campaign donors like lambs...pulling America along to the slaughter.

Just because they call it patent "reform" doesn't mean it is.

All this patent troll and �reform� talk is mere dissembling by China, huge multinational thieves and their paid puppets.

http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=276448190& ;m=276545654&live=1
http://www.npr.org/2013/11/06/243022966/secret-persuasion-how-big-campaign-do nors-stay-anonymous

They have already damaged the American patent system so that property rights are teetering on lawlessness. Simply put, their intent is to legalize theft -to twist and weaken the patent system so it can only be used by them and no one else. Then they can steal at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED. Meanwhile, the huge multinationals ship more and more American jobs to China and elsewhere overseas.

Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.

Most important for America is what the patent system does for America�s economy. 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 American economy, but the world�s. If we weaken the patent system, we force inventors underground like Stradivarius and in turn weaken our economy and job creation. For a robust economy America depends on a strong patent system accessible to all -large and small, not the watered down weak system the large multinationals and China are foisting on America.

For the truth, please see http://www.truereform.piausa.org/
http://piausa.wordpress.com/
http://www.ipwatchdog.com/2014/04/18/for-whom-the-bell-tolls-the-us-patent-system/id=49067/
http://ww w.hoover.org/publications/defining-ideas/article/142741
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Anonymous Coward, 6 May 2014 @ 10:15am

"The Day All The Patent Trolls Rushed To File New Lawsuits"

Why did the thought, "zombies" just pop in to my head.....and ground zero...........im scared right now
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Pragmatic, 7 May 2014 @ 4:58am

Re: more dissembling by Masnick
Voted funny. Patents in the Constitution:

The Congress shall have Power To...promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries....

ARTICLE I, SECTION 8, CLAUSE 8

Patents were never intended to be treated as a property right and are not treated as such in court.

Patents don't keep anything secret.

The telephone, airplane, light bulb, and many other inventions we take for granted were not invented by the patent holders. See Thomas Edison for details.

A strong patent system simply permits trolling over stupid things like slide to unlock. We could probably do without patents on anything, as we did for thousands of years.
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staff, 7 May 2014 @ 7:13am

Re: Re: more dissembling by Masnick
property rights...as Madison wrote in Federalist No. 43 regarding constitutional rights of inventors and that portion of the Constitution as proposed, "The utility of the clause will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of the individuals."
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