Supreme Court Clears Patent Invalidity Suits 120
The Empiricist writes "The United States Supreme Court has cleared the way for entities to sue over the validity of a patent — even while paying user fees to the patent holder. The eight-to-one Medimmune v. Genetech decision, written by Justice Scalia, held that by paying royalties to a patent holder, one does not necessarily waive the right to challenge the validity of the patent."
One would hope... (Score:5, Insightful)
Re:One would hope... (Score:5, Insightful)
Which is why I almost expected any other decision. Some of their recent decisions have not been at all logical.
Good (Score:1, Insightful)
If you're just a lone inventor and you have that good an idea, you're probably better off making a prototype and marketing the idea directly, anyhow, rather than getting patents.
New Legal Strategy for Big Corporations... (Score:5, Insightful)
Re:One would hope... (Score:5, Insightful)
I'm quite glad that they did and by such a large margin, but the lower court's opinion had logic behind it. If you license the patent, then you are agreeing that it's valid (you licensed it, after all), and thus have no right to challenge it's validity. That logic makes sense, however, this decision makes quite a bit more sense. You shouldn't be forced to either fight a patent and not be able to produce whatever the patent covers during the multi-year suit (or risk massive fines) or just basically giving up and licensing the patent so you can stay in business.
This is a GREAT decision, and should help with software patents ("Sure we've been paying you for your patent on the window close button, but it's obvious so we are challenging it").
The one catch: As a patent holder I'm not required by law to license to you. I believe I can even revoke (or refuse to renew) your license. So patent holders could use that as leverage to prevent suits by declining to let people license the patent while they were actively challenging it in court.
It's something... (Score:3, Insightful)
Makes total sense (Score:5, Insightful)
The fact that we're talking about multi-bazillion dollar corporations doesn't mean this concept shouldn't still apply.
(* As a side note, the new electronic bank records for checks makes this a lot more viable as proof, because the fact that the bank has on record that they cashed the check with "paid under protest" already written on it means that the defendant can't claim you wrote it after the fact. Also, banks have to send you an official copy of their record of the check upon request - the copy you get with your bank statement may get accepted in small claims court, but it's not what the law considers "official".)
Covenent not to sue now part of boilerplate (Score:2, Insightful)
If you won't sign away your right to sue, then you don't get a license.
If anyone figures out a way around this, the patentholders will figure out another workaround for future cases. Cat and mouse, spy vs. spy.
free shot? (Score:4, Insightful)
A free shot? I can't recall a time involving lawyers where anything was free. It gives them a shot instead of the alternatives, which include getting sued for violating the patent without a license or just staying out of the marketplace because of a stupid patent while you wait for it to be overturned.
Re:New Legal Strategy for Big Corporations... (Score:5, Insightful)
But you raise another interesting point: the ability of a licensee to essentially attack the patent-holder via law suit to try to get the little guy to buckle. Such a lawsuit is clearly unjust and there's got to be a law somewhere that covers such an aggressive move against a patent-holder. Extortion? Racketeering? The little guy ought to be able to immediately contest the lawsuit itself as being predatory, meant to bankrupt him, force him to sell his patent, or re-negotiate the license. If the lawsuit is found to be without merit and predatory, the company bringing the suit should be liable in a HUGE way at that point, ordered to pay HUGE compensation, and the executives who initiated the suit brought up on criminal charges. Otherwise, companies will be able to get away with anything they want as long as they have a bigger legal war chest than their competitors.
Makes sense (Score:4, Insightful)
Look at it this way: Handing over your dinner money to the playground bully doesn't necessarily mean you think he has a right to it -- just that you'd rather miss a meal than take a severe beating and probably end up missing a meal as well when he steals the money off you.
In the same way, some people choose to pay royalties they know full well to be bogus just so as to be able to ship product and earn some money, rather than challenge the bogus patents in court straight away during which time they are likely to be barred from selling product. This ruling just recognises that paying royalties does not necessarily mean acceptance that the patent is valid.
Re:Fixed with a new clause... (Score:5, Insightful)
The danger that the courts may rule that the licensee can't sign away his right to challenge the patent, thus that clause is unenforceable. You can see the equivalent of that all the time: the clauses that disclaim all warranties, followed by "Some states do not permit the disclaimer of the implied warranties of merchantability and fitness for purpose. In those cases, the law trumps our disclaimer.". And from the tone of the Supreme Court on recent patent cases, I get the feeling they don't agree with the Federal Circuit on a lot of things and are getting about ready to do some wholesale striking down of Fed Circ precedents.
Re:Good (Score:5, Insightful)
Back in the day the goal of a small company was to grow until it was one of the larger companies, not lose itself to the highest bidder.
KFG
Re:One would hope... (Score:3, Insightful)
I'm not sure the judge would be impressed with that.
Re:One would hope... (Score:3, Insightful)
No it doesn't. That's like saying that signing a ticket is an admission of guilt. It is not. It is an admission that you have a ticket (or in this case, an admission that there is a patent) and then you go to court and fight over whether or not you should have gotten a ticket - and in this case, you go to court over whether they should have gotten a patent.
Licensing a bullshit patent is good business sense and, really, a necessary protection if you want to sell something covered by that patent whether it's a good patent or not - just as signing the ticket is a necessity if you don't want to go to jail and have your car towed. I'm pretty proud of this particular simile - it's an almost-automotive metaphor that isn't totally worthless :D
Re:Who dissented? (Score:5, Insightful)
But I think the application of that principle to this particular situation is in error. If I'm having to pay royalties to use a patent that I believe is bogus, and my options are to expose myself to severe liability (by stopping payment but still using the patent), or stop making the product, or continue to pay the extortion, that's a pretty unjust situation that has been created. And the law, as another principle, doesn't like to create unjust situations by stupid application of rules. (Though I must say, for something that it tries to avoid, it seems to do it way too often anyway...)
Re:Good (Score:3, Insightful)
Actually a lot of businesses do value people with expertise over just about all else. A lot of startups -- I mean real startups that were producing actual products, not business plans based on selling advertisements to goldfish -- were bought out not because their patent/product portfolio was really all that impressive or valuable on their own, but because the engineers that designed those products were impressive. Brainpower is a powerful asset, and successfull businesses recognize it and try to aquire/cultivate it. Of course then the accountants come in with the quarterly reports and then the axe starts swinging, but so it goes.
Re:One would hope... (Score:3, Insightful)
So, if the patent turns out to be invalid, do you get your license fees back? Or even better, treble damages for what, without a valid patent, amounts to extortion?
Re:One would hope... (Score:3, Insightful)
I dont see how that's a problem. In fact, it sounds like a very good incentive for patent holders to obtain "good" patents and avoid trying to get junk patents approved.
And heck, maybe that would get both sides interested in moving to a non-adversarial system of innovation incentives.