Why The Trial Lawyers May Have Miscalculated In Killing Patent Reform, And How It May Come Back To Bite Them
from the better-patent-reform-next-year dept
As we noted last week, it was really the trial lawyers (with some help from pharma) that killed patent reform. While patent trolling operations and some big legacy companies with giant patent portfolios had been fighting against patent reform all along, they weren't responsible for killing it outright. In fact, in talking to many people involved, the same story comes up again and again: pretty much everyone was negotiating on a deal -- and, at the last minute, the trial lawyers called Harry Reid, who told Leahy to kill the bill. Joe Mullin quotes a tech industry lobbyist who notes that "I feel like a mouse who never knew he was a mouse," and that despite all the negotiating, the trial lawyers just put an end to it:"We felt really good the last couple of days," said the tech lobbyist. "It was a good deal—one we could live with. Then the trial lawyers and pharma went to Senator Reid late this morning and said that's it. Enough with the children playing in the playground—go kill it."Some have asked why trial lawyers (rather than patent lawyers) were so against it, and the key thing is that the trial lawyers don't want anything to do with fee shifting. They fear, greatly, that if fee shifting is shown to be effective in patent cases, it will then make it easier to spread to other types of cases. This isn't a huge surprise. Nearly a year ago, a high ranking Democratic Congressional staffer told me flat out that "fee shifting has to be off the table" because "the trial lawyers will never allow it." I was actually surprised that it stayed in the bill as long as it did.
But here's the thing: having the trial lawyers kill the bill outright may be incredibly shortsighted. That's because this bill was already pretty weak overall. All that "bipartisan negotiating" and lobbying pressure from patent trolling operations (and big tech firms who didn't want to lose the ability to exploit giant portfolios of bad patents) had basically weakened this bill drastically already. Even the fee shifting was pretty limited and unlikely to have a huge impact.
But the problem of patent trolls still remains.
And here's the big thing. The Republicans are very much in favor of patent reform, and many prognosticators expect the Republicans to take control of the Senate in this year's elections. As lawyer Matt Johnson points out, with the Republicans in control over both houses, much stronger patent reform might go through in the next Congress, and there won't be much the trial lawyers will be able to do about it. Republicans aren't known for bending to the whims of trial lawyers.
In the interest of making a deal with Democrats this year, Cornyn offered major concessions on fee-shifting, heightened pleading, and discovery abuse during his negotiations with Sen. Chuck Schumer (D-NY). Those concessions won’t necessarily be on the table next year in a GOP-controlled Senate. And House Judiciary Chairman Bob Goodlatte may similarly be unmotivated to make concessions with Democrats in his chamber. Moreover, the trial bar certainly can’t count on the President to be a backstop. President Obama has championed many of the litigation reforms they oppose, including loser-pays and heightened pleading standards.As he says, "this year’s Schumer-Cornyn deal is probably as good as it gets" for those looking to limit patent reform. Next year, the trial lawyers may be able to call Harry Reid, but it might not matter at all.
Reform opponents made the calculation that they’ll take their chances in 2015 rather than swallow a bipartisan compromise this year.
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: congress, harry reid, patent reform, patent trolls, patents, patrick leahy, trial lawyers
Reader Comments
Subscribe: RSS
View by: Time | Thread
"Everybody always calls and tells me that we need to cut government. And in the next breath, says why this or that thing shouldn't be cut or should get an increase."
Of course, we're used to it in Illinois, too. We had a "temporary" state tax increase recently so the state could (attempt to) pay off some of its many late bills and IOUs.
Well, guess what, the state is still bleeding red ink (and I'm not even sure they paid off all of the IOUs), and so they want to make said tax increase permanent. They didn't cut anything of note, and the budget ballooned again, and the money was likely squandered. Which many of us cynically assumed was the plan all along, anyway.
In a somewhat related story, if anyone believes in the altruism of any lobbying group or politician, then I've got this here bridge for sale...
[ link to this | view in thread ]
Sounds more like...
[ link to this | view in thread ]
Fee shifting is one coffin nail for star lawyers
With "everybody pays", the limiting factor is what one stands to lose without the lawyer in question, and the awards in the U.S. justice system, particularly in patent cases, are insane. With "loser pays", the limiting factor is the work being done, at least without extra "bonus" arrangements.
With standard rates and "loser pays", there can be a working business for legal insurance to private persons and small business since, as long as they don't engage in serial dubious litigation, there is a reasonable chance of recovering court costs for the insurer. If affordable competent defenses are to be feared on a regular basis, serial threats of litigation, a nice barely-in-court-before-settling money-making scheme involving trial lawyers becomes less workable.
[ link to this | view in thread ]
Re: Sounds more like...
[ link to this | view in thread ]
Bribery,"i mean legally paying to pass a law"
[ link to this | view in thread ]
Re: Sounds more like...
[ link to this | view in thread ]
Money can fix it for sure.
[ link to this | view in thread ]
Re: Bribery,"i mean legally paying to pass a law"
[ link to this | view in thread ]
Re: Bribery,"i mean legally paying to pass a law"
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
Re: Re: Sounds more like...
[ link to this | view in thread ]
Re: Fee shifting is one coffin nail for star lawyers
reasonability, lol - good one
" there can be a working business for legal insurance to private person"
This is insane, therefore I'm positive it will become a reality.
"a nice barely-in-court-before-settling money-making scheme involving trial lawyers becomes less workable."
What have you been smoking?
[ link to this | view in thread ]
Re: Re: Bribery,"i mean legally paying to pass a law"
Corruption seems to be a universal human trait some are better at hiding it than others.
[ link to this | view in thread ]
Re: Sounds more like...
Furthermore, not only would there be fewer questionable suits initiated, there would also be quicker settlements by those who knew they were at fault.
Anyone whose ever been involved with the legal profession knows that "quicker settlements" is not their objective. The longer the process takes, the more money is made by every lawyer on both sides of the dispute.
[ link to this | view in thread ]
Re: Re: Fee shifting is one coffin nail for star lawyers
It's quite standard in Germany where loser-pays-all is in effect. Legal insurance is big business, with several of the large players being household names frequently advertising on billboards and TV.
From there, the U.S. court system looks like one of the nuttier derailings from sense and proportion the States have on parade.
[ link to this | view in thread ]
Elections are never a sure thing
It looked impossible for Republicans to not win back the senate in 2012, or at the very least gain some seats. Democrats had twice as many seats up for grabs. Yet democrats managed to expand their majority by 2 seats.
Never under estimate the ability of political parties to screw things up.
[ link to this | view in thread ]
Re: Re: Re: Bribery,"i mean legally paying to pass a law"
Why would you want to become a billionaire if you cannot buy the law, politics, power, and injustice?
Do you want to return to the dark ages where a Rockerfeller, in spite of all the fights his forefathers engaged in in the succession and tradition of the pioneers toiling to take the Land of Hope and Glory from savages not fit to exploit it and their fellow human beings, is denied the benefits of his heritage? The dark ages where men are created equal, where the court is a human institution that makes a pauper the equal of a Rockerfeller, the stupid man the equal of an Einstein and the ignorant man the equal of any college president?
America's prosperity relies on the dollar, and there is no other currency suitable for not just buying bread and a roof over your head, but also education, politicians, legislation, law-making as well as law-rendering, and influence, power, death and destruction.
This is what the dollar stands for, and what the U.S. has readily available on offer.
It does not hide it, it is proud of it and parades it. It is what makes the U.S.A. unique and morally superior to all the envious curd eaters it plasters with death raining from the skies.
[ link to this | view in thread ]
Re: Elections are never a sure thing
So the Republicans decided to nominate the Antidemocrat in the hope to have everybody think "anything but Obama". Well, except for Romney.
I am not surprised that the Republicans did not make it. But what is just disgusting is that in spite of both political parties fighting for the loonie bin, no other party got even half a foot in the vast space of sanity that the two major parties chose to leave barren.
"Liberal" is still a smear word in the U.S.A., but there are as many liberals to be found in the political landscape as there are giants coursing La Mancha.
[ link to this | view in thread ]
Re: Re:
[ link to this | view in thread ]
Re: Re: Sounds more like...
Where this hurts trial lawyers is not the typical auto accident case which does not go to court but with the larger suits that are too expensive for the defendant to properly pursue. Fee shifting tells the defendant, if you have strong case and win the other side forks over your legal fees. Defendants with weak cases will still fold but many with solid cases will stand their ground and win.
The trial lawyers know many can not afford the cost of a successful defence and indirectly use the legal fees as a form of extortion.
[ link to this | view in thread ]
Loser pays is even more important
In my opinion, getting a loser pays system is even more important than patent reforms.
[ link to this | view in thread ]
Re: Sounds more like...
[ link to this | view in thread ]
more dissembling by Masnick
Nonsense. All you know about patents is...you don't have any.
Just because they call it “reform” doesn’t mean it is.
http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=276448190& amp;m=276545654&live=1
http://www.npr.org/2013/11/06/243022966/secret-persuasion-how-big-campaign -donors-stay-anonymous
“patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…
“This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained,
despite other democrats praising the overhaul. “This is a big
corporation patent giveaway that tramples on the right of small
inventors.”
Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.
They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs. The present bill (vers 1, 2, 3, etc) is nothing less than another giveaway for huge multinationals and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated these bills will help them steal our inventions.
Patent reform is a fraud on America. These bills will not do what they claim they will. What they will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what they paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. These bills will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Meanwhile, the large multinationals ship more and more jobs overseas. These bills are a wholesale destroyer of US jobs.
Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.
Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, 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 a different/opposing view on patent reform, please see…
http://truereform.piausa.org/default.html
http://piausa.wordpress.com/
http://washingtonexaminer.c om/patent-reform-like-most-reforms-in-the-end-benefits-the-biggest-guys-with-the-best-lobbyists/arti cle/2524033
http://www.hoover.org/publications/defining-ideas/article/142741
[ link to this | view in thread ]
Re: more dissembling by Masnick
[ link to this | view in thread ]
Re: Re: Sounds more like...
what a concept hey?
[ link to this | view in thread ]
Re: Re: Elections are never a sure thing
When our national political well becomes so poisoned that people feel obliged to join Red Team or Blue Team for safety in numbers, something is wrong.
Let's start talking about other parties well in advance of 2016. Maybe, just maybe, we'll get some of them elected.
[ link to this | view in thread ]
Re: more dissembling by Masnick
That's your problem, right there. Patents and copyrights were NEVER intended to be treated as property. That's why it says, "For a limited time" in our Constitution. You know, the document on which our nation was founded. THAT Constitution.
Read it, know it, love it.
[ link to this | view in thread ]