New Hampshire Supreme Court: Of Course It's Not Defamatory To Call A Patent Troll A Patent Troll

from the duh dept

Earlier this year, we wrote about a legal fight in New Hampshire, where patent trolling firm ATL, had sued a bunch of critics for defamation for calling them a patent troll. As we noted in February, this was an incredibly weak argument, as it's a statement of opinion. Thankfully, the New Hampshire Supreme Court got this one right and ruled that calling someone a patent troll is not defamatory.

The ruling is a pretty straightforward, by-the-books ruling on a bogus defamation claim on an opinion statement. It cites all the usual cases -- mainly Phantom Touring -- to point out that "patent troll" is just an opinion that can't be defamatory, because there's no objective standard by which you would prove it true or false. People can (and do!) disagree over what constitutes a patent troll, and the court system is not there to settle that debate.

We conclude that the challenged statement, that ATL is a well-known patent troll, is one of opinion rather than fact. As the slideshow demonstrates, the statement is an assertion that, among other things, ATL is a patent troll because its patent-enforcement activity is “aggressive.” This statement cannot be proven true or false because whether given behavior is “aggressive” cannot be objectively verified: “[w]hether or not a particular person’s behavior may be characterized as” aggressive is “a quintessential expression of personal judgment which is subjective in character.” Piccone, 785 F.3d at 772 (quotations and brackets omitted); see Catalfo, 657 F. Supp. at 468. “[I]t means different things to different people[,] and there is not a single usage in common phraseology.” McCabe, 814 F.2d at 842 (quotation and ellipsis omitted) (“The lack of precision makes the assertion ‘X is a scam’ incapable of being proven true or false.”); see also Phantom Touring, 953 F.2d at 728 (statements that plaintiff’s theater production was “fake” or “phony” could not be objectively verified “since those adjectives admit of numerous interpretations” (quotations omitted)). That CUNA acknowledged the “pejorative” nature of the phrase “patent troll” does not mean it is an assertion of fact rather than opinion. See Piccone, 785 F.3d at 772; see also Masson v. New Yorker Magazine, 832 F. Supp. 1350, 1367 (N.D. Cal. 1993) (“Falsity and defamatory meaning are analytically separate.”).

To the extent the plaintiffs argue that CUNA’s or the other defendants’ use of “patent troll” is one of verifiable fact rather than opinion because those statements were accompanied by a definition of the phrase, we disagree. As should be apparent from our discussion above, and as the Catalfo court explained, if a challenged statement is defined, but that definition itself “does not have a precise meaning such that it is capable of verification,” neither does the challenged statement. Catalfo, 657 F. Supp. at 468 (even if “sleazy” carried definition of “marked by low ethical standards,” it was not “capable of verification” because “[e]thical standards are inherently subjective”). For the reasons explained above, the definition of “patent troll” offered by CUNA cannot be objectively verified.

Other plaintiffs find their statements to be similarly protected:

Similar to CUNA’s allegedly defamatory statements, we conclude that the “references to ATL as a patent troll” in ABA’s 2013 testimony are expressions of opinion. Unlike CUNA, ABA did not offer a precise definition of “patent troll” in its testimony.4 If anything, though, ABA’s failure to specifically define the phrase, coupled with the lack of any concrete common definition, see Golden, supra at 2112-13 n.7, as well as the myriad ways in which its utterers deploy it, see Allison et al., supra at 242, makes it even more difficult for us to “imagine . . . objective evidence that might conclusively prove or disprove it.” Levinsky’s, 127 F.3d at 130. Like other, similar pejorative terms, “patent troll” is “quintessentially subjective.” Id.; see, e.g., Piccone, 785 F.3d at 772; Gray, 221 F.3d at 248; Dilworth v. Dudley, 75 F.3d 307, 310 (7th Cir. 1996) (statement calling plaintiff a “crank” was not actionable because it was “just a colorful and insulting way of expressing” disapproval of the plaintiff’s work). “[T]he status as a troll is in the eye of the beholder. Every firm that has a patent valuable enough to support major [infringement] litigation . . . has acquired that patent from some person who has invested the resources to invent that technology.” Mann, supra at 1023-24; see also Electronic Frontier Foundation, 290 F. Supp. 3d at 946.

The plaintiffs appear to argue that ABA’s 2013 statement referring to ATL as a patent troll cannot be construed as an opinion because it was made in the context of giving legislative testimony. According to the plaintiffs, “legislation cannot address an issue that cannot be defined.” We disagree with the plaintiffs’ “untenable premise” that all legislative testimony must, ipso facto, consist entirely of factual assertions. Riley, 292 F.3d at 294. People can, and regularly do, express their personal opinions before legislatures.

The court also (easily, as have other courts) rejects the claims that if you don't say "I think" or "In my opinion" before a statement of opinion, it's not longer an opinion:

The plaintiffs’ appellate arguments with respect to Stier and Pierce Atwood’s statements are generally duplicative of their arguments as to CUNA’s and ABA’s respective statements. Their arguments pertaining to these two defendants differ from those pertaining to the other defendants in two ways that bear mention. The plaintiffs contend that the context of Stier and Pierce Atwood’s patent troll statements make them actionable because they contain “no language to alert the audience that the statements . . . are expressions of opinion.” However, “the law does not force writers to clumsily begin each and every sentence with” language such as “I think,” or “in my opinion,” for a statement to constitute an opinion. Riley, 292 F.3d at 292 (quotation and brackets omitted). Rather, Stier and Pierce Atwood’s patent troll statements are opinions for the same reason that CUNA’s and ABA’s statements are: whether ATL is a patent troll cannot be “objectively verified.” Piccone, 785 F.3d at 772 (quotation omitted).

I'm reminded of a lawyer who once pointed out to me that it's just as easy to start a sentence saying "in my opinion..." followed by a potentially defamatory factual statement, as it is to state "it is a fact..." followed by a statement that is purely opinion. All that matters is whether or not the claim itself is actually a fact or an opinion -- not whether your declare it one way or the other.

And with that, ATL has to live with the, uh, fact that New Hampshire's Supreme Court has said it's not defamatory to call ATL a patent troll. So, sing it with me, folks: ATL is a patent troll. After all, it sent threat letters to a ton of banks and credit unions, claiming their ATMs violated its patents, and demanding licensing fees. It also set those license fees at a rate that would be below what it would likely cost to fight a patent lawsuit. These are hallmarks of what most of us consider to be patent trolls.

Filed Under: 1st amendment, defamation, free speech, new hampshire, opinion, patent troll
Companies: atl

Company Wants New Hampshire Supreme Court To Let It Sue Anyone Who Calls It A Patent Troll

from the oh-really-now? dept

Over the years, there have been a few attempts -- usually by companies that most of us would call patent trolls -- to argue that calling a company a patent troll is defamatory. These arguments rarely get very far, because they completely misunderstand how defamation works. However, a company with some questionable patents around bank ATMs, called ATL, tried a few years back to sue a bunch of its critics over the "patent troll" name. Thankfully, the local court in New Hampshire correctly noted that calling someone a patent troll is protected speech under the First Amendment and is not defamatory.

ATL decided it was going to keep trying. Tim Lee, over at Ars Technica, recently wrote about oral arguments in front of the New Hampshire Supreme Court in this case.

In Thursday's oral arguments at the New Hampshire Supreme Court, ATL attorney Steve Gordon urged the New Hampshire justices to overrule that initial dismissal of the lawsuit.

"The gist or sting of the statements at issue was that my clients were extortionists, shakedown artists, preying on small banks seeking to license patents that were of no value," Gordon said.

Gordon argued that none of this was true. Critics said ATL wasn't selling any products, but Gordon noted that his client did try to commercialize his patents many years ago. Critics said ATL was engaged in a shakedown. "This is not a shakedown," Gordon said.

This seems like an incredibly iffy argument. There have been many, many cases on similar types of claims, and such statements are not defamatory, as it's not possible to prove them directly "true" or "false" since they're very much in the eye of the beholder. The Phantom Touring case is a key one here, where the court ruling noted:

Many of the statements cited in the complaint and appellate brief either constitute obviously protected hyperbole or are not susceptible of being proved true or false. Such, for example, is the language in "The phantom of the 'Phantom' " quoting a critic who described the Hill production as "a rip-off, a fraud, a scandal, a snake-oil job." Not only is this commentary figurative and hyperbolic, but we also can imagine no objective evidence to disprove it. Whether appellant's "Phantom" is "fake" or "phony" is similarly unprovable, since those adjectives admit of numerous interpretations.

I can't see how ATL can get past that bar.

Another standard seen in weak defamation cases is seizing on a small error of terminology. In this case, back in 2012 ATL had key claims in some of its patents invalidated in the federal circuit. That didn't mean the entire patent was invalidated, but invalidating key claims can more or less kill off a patent. In this case, the defendants said that the patents had been invalidated, when it was actually just some key claims. ATL's lawyers argue this is defamatory. It is not.

At one point, Gordon argued that one of the defendants had defamed ATL by claiming its patents had been invalidated. Gordon said that this was false and defamatory because only certain claims of its patents had been invalidated; others remained valid.

But justices seemed skeptical. "Wasn't the gist of the statement correct?" one justice asked.

Indeed, having the gist of a statement being correct is a defense against defamation claims. That's why I find it kind of amusing that up above, ATL's lawyer used "gist" in suggesting that calling ATL a troll was defamatory. If you're the defamation plaintiff, you're generally not supposed to be the one bringing up "the gist."

Of course, from the hearing, it really does sounds like (note to ATL lawyers: this is my opinion) ATL is just trying to cost the defendants as much as possible, as its focus seems to be getting past the Motion to Dismiss stage and into discovery -- which can be the most expensive part of a case. Though, as Lee notes, ATL's reasons for wanting to move the case into discovery seems to be... because they want to get into discovery.

Gordon argued that ATL should have gotten a chance to build its case via discovery before a judge decides whether the case has merit. But when a justice asked what information he'd like to seek during the discovery process, the attorney's answer was a little vague. Gordon said that he'd like to depose defendants, asking questions like "what were the facts that you relied upon when you made a statement of shakedown?"

But it's not clear that these kinds of questions would be all that illuminating. The core of the defendants' case is that terms like "shakedown" are fundamentally matters of opinion. Courts have long held that opinionated terms like "rip-off" and "snake-oil" could not be defamatory. The defendants argue that labeling someone a troll or accusing them of blackmail falls into the same category.

Never read too much into how judges behave during oral arguments, but at least from Tim's reporting, it sounds like they're skeptical here. And they should be. Calling a company a patent troll is not defamatory. Nor is saying a patent was invalidated when it was really key claims. And trying to drive up legal fees by dragging a questionable case into discovery is quite obnoxious and an attempt to bully a company through abusive litigation.

Filed Under: 1st amendment, defamation, free speech, new hampshire, patent troll
Companies: atl

New Hampshire Court: First Amendment Says You Can Call A Patent Troll A Patent Troll

from the what-about-defamation-troll? dept

A New Hampshire state court has dismissed a defamation suit filed by a patent owner unhappy that it had been called a "patent troll." The court ruled [PDF] that the phrase "patent troll" and other rhetorical characterizations are not the type of factual statements that can be the basis of a defamation claim. While this is a fairly routine application of defamation law and the First Amendment, it is an important reminder that patent assertion entities – or "trolls" – are not shielded from criticism. Regardless of your view about the patent system, this is a victory for freedom of expression.

The case began back in December 2016 when patent assertion entity Automated Transactions, LLC ("ATL") and inventor David Barcelou filed a complaint [PDF] in New Hampshire Superior Court against 13 defendants, including banking associations, banks, law firms, lawyers, and a publisher. ATL and Barcelou claimed that all of the defendants criticized ATL's litigation in a way that was defamatory. The court summarizes describes the claims as follows:

The statements the plaintiffs allege are defamatory may be separated into two categories. The first consists of instances in which a defendant referred to a plaintiff as a "patent troll." The second is composed of characterizations of the plaintiffs' conduct as a "shakedown," "extortion," or "blackmail."

These statements were made in a variety of contexts. For example, ATL complained that the Credit Union National Association submitted testimony to the Senate Committee on the Judiciary [PDF] that referred to ATL as a "troll" and suggested that its business "might look like extortion." The plaintiffs also complained about an article in Crain's New York Business that referred to Barcelou as a "patent troll." The complaint alleges that the article included a photo of a troll that "paints Mr. Barcelou in a disparaging light, and is defamatory."

ATL had filed over 50 lawsuits against a variety of banks and credit unions claiming that their ATM machines infringed ATL's patents. ATL also sent many demand letters. Some in the banking industry complained that these suits and demands lacked merit. There was some support for this view. For example, in one case, the Federal Circuit ruled the several of ATL's asserted patent claims were invalid and that the defendants did not infringe. The defendants did not infringe because the patents were all directed to ATMs connected to the Internet and it was "undisputed" that the defendants' products "are not connected to the Internet and cannot be accessed over the Internet."

Given the scale of ATL's litigation, it is not surprising that it faced some criticism. Yet, the company responded to that criticism with a defamation suit. Fortunately, the court found the challenged statements to be protected opinion. Justice Brian T. Tucker explained:

[E]ach defendant used "patent troll" to characterize entities, including ATL, which engage in patent litigation tactics it viewed as abusive. And in each instance the defendant disclosed the facts that supported its description and made ATL, in the defendant's mind, a patent troll. As such, to the extent the defendants accused the plaintiffs of being a "patent troll," it was an opinion and not actionable.

The court went on to explain that "patent troll" is a term without a precise meaning that "doesn't enable the reader or hearer to know whether the label is true or false." The court notes that the term could encompass a broad range of activity (which some might see as beneficial, while others see it as harmful).

The court also ruled that challenged statements such as "shakedown" and comparisons to "blackmail" were non-actionable "rhetorical hyperbole." This is consistent with a long line of cases finding such language to be protected. Indeed, this is why John Oliver can call coal magnate Robert Murray a "geriatric Dr. Evil" and tell him to "eat shit." As the ACLU has put it, you can't sue people for being mean to you. Strongly expressed opinions, whether you find them childish or hilariously apt (or both), are part of living in a free society.

Justice Tucker's ruling is a comprehensive victory for the defendants and free speech. ATL and Barcelou believe they are noble actors seeking to vindicate property rights. The defendants believed that ATL's conduct made it an abusive patent troll. The First Amendment allows both opinions to be expressed.

Reposted from EFF's Deeplinks blog

Filed Under: david barcelou, defamation, extortion, first amendment, free speech, patent trolls
Companies: atl, automated transactions llc