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Judge Makes Lawyers Pay For Frivolous Patent Suit 263

Posted by ScuttleMonkey
from the not-making-partner-anytime-soon dept.
Gallenod writes "The Denver Post is reporting that the U.S. 10th Circuit Court of Appeals has upheld the decision of a Federal judge who threw out and reversed a jury decision in favor of a patent infringement claim and ordered the plaintiff's lawyers to pay the defendants' court costs. U.S. District Senior Judge Richard P. Matsch sanctioned the plaintiff's attorneys for 'cavalier and abusive' misconduct and for having a 'what can I get away with?' attitude during a 13-day patent infringement trial in Denver. With the Appeals Court in agreement, could this case be the 'shot heard round the world' in the revolution against patent trolls?"
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Judge Makes Lawyers Pay For Frivolous Patent Suit

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  • Re:Why? (Score:3, Informative)

    by plague3106 (71849) on Monday February 25, 2008 @03:23PM (#22550066)
    A judge can do that if he feels the jury made a wrong decision. I'm not sure if its only in civil cases (which this is) or in criminal cases.. although I think in criminal cases they can only throw out an improper guilty verdict, not an innocent one.
  • Re:Why? (Score:5, Informative)

    by ridgecritter (934252) on Monday February 25, 2008 @03:24PM (#22550090)
    Judges have broad authority to set aside or nullify a jury verdict. Usually called "judgement non obstante veredicto", or judgement notwithstanding the verdict. If the judge strongly believes the jury got the facts and/or the applicable law very badly wrong, a jnov can be entered. It's unusual, as juries are accorded very strong cred as the triers of fact.
  • by kalpol (714519) on Monday February 25, 2008 @03:37PM (#22550302) Homepage
    Judge Matsch was the presiding judge at Timothy McVeigh's trial, if anyone remembers.
  • by flyneye (84093) on Monday February 25, 2008 @03:45PM (#22550416) Homepage
    Anon cow forgets that the Federal United States is a different entity than the several states u.s. The constitution applys to the several states.
    Translation: once you step foot on federal ground (courthouse,military base,atomic test sites,U.S.highways,etc.) your constitutional rights are more like constitutional favors you are granted if they feel like it. Other ways you are wangled out of your rights are by having a Federal address on your house(for reasons of recieving mail from Federal Post Office, signing documents whose fine print makes you subservient to Federal regulation, etc.)In other words Your constitutional rights were lost long ago by sneaky legislation hidden in history and enacted for the convenience of the Federal Government.
            Many may disagree but will find that it explains the carte blanche the Fed takes with regards to things like wiretapping,income taxes,national debt. and other things that nothing ever gets done about and even the press blindly accept now.Anyone who speaks up is instantly just a nut job and taken for granted because after all,"whoever heard of such a thing? They never taught us anything like that in (Federally funded)school! We are a Democracy(only since the last century) and pay our fair share of taxes(also from the same time frame) .

  • Re:Why? (Score:3, Informative)

    by SatanicPuppy (611928) * <[Satanicpuppy] [at] [gmail.com]> on Monday February 25, 2008 @03:45PM (#22550418) Journal
    It's pretty much only when the jury comes to a conclusion that is in opposition with the known facts of the case, though the whole thing can be tossed because of irregularities in the conduct of the lawyers as well.

    The judges also have a large amount of say in the verdict, though there they have to follow precedent and the law; if a jury tries to award an absurdly high (or low) amount of money (based on precedent) the judge can throw out or modify the verdict within the scope of the law.
  • Re:And now... (Score:2, Informative)

    by Hyram Graff (962405) on Monday February 25, 2008 @03:49PM (#22550470)
    If you read the article, or at least the summary, you would have seen that this was held up by a court of appeals. There are only two more possible challenges left 1) an En banc [wikipedia.org] rehearing by the 10th circuit, and 2) The Supreme Court of the United States.
  • by pete-classic (75983) <hutnick@gmail.com> on Monday February 25, 2008 @03:51PM (#22550490) Homepage Journal
    I see you didn't make it to the seventh paragraph of the article:

    "In 42 years of litigation, I've never seen a judge set aside a verdict, then award fees to opposing counsel," said local attorney Robert Miller, of Perkins Coie LLP. "There are times when a verdict is set aside, and times when lawyers are sanctioned. But I've never heard of them happening in one case.


    -Peter
  • Re:And now... (Score:4, Informative)

    by julesh (229690) on Monday February 25, 2008 @03:53PM (#22550506)
    Imagine the little record label suing Sony for re-listing their catelog without permission, and Sony simply out-spends them, then forces them out of business by having them pay for the legal costs?

    Funnily enough, you don't hear about this happening very often in the UK, which has a loser-normally-pays system (rather than loser occasionally pays, as in the US). Now this could be because UK law has a substantially different culture to the US (although I'm far from convinced that this is true) or it could be because the threat is blown up out of all proportion by those who have a vested interest in maintaining the status quo. Here's a suggestion: google tort reform astroturf [google.co.uk]. I highly recommend the first link that comes up, and some of the others are good too.
  • by Anita Coney (648748) on Monday February 25, 2008 @03:53PM (#22550508) Homepage
    United States District Court,
    D. Colorado.
    MEDTRONIC NAVIGATION, INC., Medtronic Sofamor Danek, Inc., Sofamor Danek Holdings, Inc., St. Louis University, and Trustees of Dartmouth College, Plaintiffs,
    v.
    BRAINLAB MEDIZINISCHE COMPUTERSYSTEMS GMBH, Brainlab AG, Brainlab USA, Inc., and Brainlab, Inc., Defendants.
    Civil Action No. 98-cv-01072-RPM.
    Feb. 12, 2008.

    Anthony Lawrence Giacomini, Sean Connelly, Daniel M. Reilly, Hoffman, Reilly, Pozner & Williamson, L.L.P., Conor Fitzgerald Farley, Lee Frederick Johnston, Holland & Hart, LLP, Denver, CO, J. James Li, Vera M. Elson, McDermott Will & Emery, LLP, Palo Alto, CA, Krista Leigh Vink Venegas, McDermott, Will & Emery, Los Angeles, CA, Kurt A. Luther, Leslie I. Bookoff, Finnegan, Henderson, Farabow Garrett & Dunner, Washington, DC, David W. Harlan, Senniger Powers, St. Louis, MO, for Plaintiffs.

    James Edward Hartley, Holland & Hart, LLP, Denver, CO.

    Jay R. Campbell, John J. Del Col, Joshua M. Ryland, Renner, Otto, Boisselle & Sklar, LLP, Kyle B. Fleming, Cleveland, OH, L. Andrew Cooper, Marc David Flink, Thomas H. Shunk, Baker & Hostetler, Denver, CO, for Defendants.

    ORDER FOR AWARD OF ATTORNEY FEES AND COSTS TO BRAINLAB DEFENDANTS

    RICHARD P. MATSCH, Senior District Judge.
    *1 The defendants (collectively BrainLAB) seek to recover all of their attorney fees and costs incurred in the defense of this suit for patent infringement, contending that it was filed and prosecuted not to protect the technology protected by the patent claims but to drive a competitor out of a market for an emerging technology for application in the navigation of surgical instruments in procedures requiring exquisite precision, as in the removal of a brain tumor. Medtronic Navigation, Inc. (Medtronic) and its predecessor Surgical Navigation Technologies, Inc. (SNT) marketed variations of a device called "StealthStation" in competition with BrainLAB's "VectorVision" devices. The accused devices can be described as passive optical systems in contrast to an active acoustic system. That contrasting technology was at the core of this case.

    BrainLAB contends that it is entitled to fees and costs because this is an exceptional case justifying relief under 35 U.S.C. 285; that plaintiffs' lead counsel should be held responsible under 28 U.S.C. 1927 and that the Court should grant the motion in the exercise of its inherent authority to protect the integrity of the processes of adjudication. Upon reflection, this Court finds and concludes that the rulings on the claims construction issues adjudicated the fairly debatable issues in this case and that the manner in which plaintiffs' counsel continued the prosecution of the claims through trial was in disregard of their obligations as officers of the court. The fairness of the adversary system of adjudication depends upon the assumption that trial lawyers will temper zealous advocacy of their client's cause with an objective assessment of its merit and be candid in presenting it to the court and to opposing counsel. When that assumption has been contradicted by a trial record of conduct reflecting a winning is all that is important approach to the trial process, the court has a duty to redress this resulting harm to the opposing party.

    BrainLAB has made a plausible argument that this entire civil action was frivolous. The chronology of the suit must be viewed against the backdrop of developments in the field of image-guided surgical navigation technology.

    In approximately 1991, SNT began development of an image-guided surgical navigation product. SNT worked with Dr. Richard Bucholz of St. Louis University. SNT also collaborated with Dr. Peter Heilbrun of the University of Utah. In 1994, SNT obtained rights to the application for patent that issued as U.S. Patent No. B1 5,383,454 to Bucholz (the 454 Patent or the Bucholz Patent). The claims of that patent relate to a system that depends on the activation of sound emitters on a surgical instrument and the pati
  • by DRJlaw (946416) on Monday February 25, 2008 @03:57PM (#22550548)
    Simply put, no.

    "After the court issued its claim construction rulings, Medtronic's counsel proceeded cavalierly, with reckless indifference to the merits of Medtronic's infringement claims," Matsch wrote."

    "Matsch said the McDermott lawyers willfully ignored his rulings on claim construction in their arguments before a Colorado jury in 2005. In patent cases, those orders define the scope of the patents and, therefore, what the plaintiff's lawyers can argue for infringement."

    "The judge said in his Tuesday ruling that while McDermott paid lip service to the orders, the lawyers improperly pointed the jury toward Medtronic's broad reading of the patents. McMahon also made comparisons of the two companies' products, the StealthStation and VectorVision, instead of comparing Medtronic's patents to BrainLAB's product, "contrary to established law," Matsch wrote."

    Summary for lawyers [law.com]

    In the anatomy of the typical patent case, there is

    1. The filing of a suit
    2. Discovery
    3. A so-called "Markman hearing" to resolve disputes between the litigants as to the meaning of disputed terms or phrases within the patent claims
    4. Summary judgment motions
    5. A trial (bench or jury)
    6. Post-verdict motions
    7. Appeal

    If you read through the judge's ruling, or even the law.com article, it's apparent that the judge believed that the trial was unnecessary, and that the case could and should have been resolved by summary judgment (and any subsequent appeal). If the case had ended at this point, there would likely be no talk of sanctions or the like. Therefore the answer to the question at the end of the summary is no.

    All the rest relates to the judge's determination that 1. the platintiff's attorneys misrepresented the state of the case in their briefs opposing the motions for summary judgment that would have ended the trial phase and 2. the plaintiff's attorneys disregarded both his rulings in case and unequivocable legal standards for what does and does not constitute patent infringement.

    To use bad sports analogies, this ruling is the red card or the technical foul called on the field, not a warning that the team should never have attempted to play the game.
  • Re:And now... (Score:4, Informative)

    by MacDork (560499) on Monday February 25, 2008 @04:05PM (#22550658) Journal

    then forces them out of business by having them pay for the legal costs?

    The plaintiff's lawyers are being ordered to pay, not the plaintiff.

  • by Ollabelle (980205) on Monday February 25, 2008 @04:06PM (#22550672)
    I read a bit of background on this http://www.law.com/jsp/article.jsp?id=1202990197454 [law.com] and noted that the judge in pre-trial motions restricted the construction of the patent claim to fairly narrow grounds. But in the trial, the lawyers ignored that restriction and, among other things, showed the jury how the two competing products were similar rather than showing how the competing product used their client's patent. If effect, the jury based their reasoning on improper evidence. The judge rightfully tossed the verdict and slammed the lawyers for their deceitfulness.

    Now, where's my violin?

  • Re:Wow. (Score:5, Informative)

    by DragonWriter (970822) on Monday February 25, 2008 @04:18PM (#22550790)

    If he dismisses the case before it goes to the jury he can be certain that it will be appealed. If he lets the jury come back with a verdict in favor of the plaintiff it likely ends there. When this goes wrong and the jury returns an obviously stupid verdict the judge overrules it knowing that there will be an appeal but the defendant is no worse off than if the case had been dismissed before the jury verdict.


    IIRC, the important difference that this glosses over is that if the judge enters a decision prior to the verdict (a judgement as a matter of law), rather than overturning the jury verdict, if there is an appeal and the judge's decision is thrown out on appeal, it can require a empaneling a new jury and trying the case again. Whereas, if the jury returns a verdict and the judge enters a JNOV and that is appealed, the original jury verdict still exists and can be entered (or modified less radically.)
  • by DaveV1.0 (203135) on Monday February 25, 2008 @04:27PM (#22550900) Journal
    Apparently you have never heard of torts and contingency fee based lawsuits. In fact, the lawyer would jump at that case and do it on a contingency basis because it would be so easy to get at least a settlement.

    The fun part for the lawyer would be when he started running commercials stating anyone who was injured by glass in MegaFoodCorp's products should call him to see about joining a class action lawsuit. Hell, just the thought of commercials like that would have MegaFoodCorp shitting their pants and offering high 6 figure settlements. After all, look what happened to Wendy's after the "finger in the chili". They were hurt badly, with sales down for months. And, no one was hurt in that one.

    It would go more like this:

    Average Joe: I want to sue MegaFoodCorp.
    Lawyer: Why?
    Average Joe: There was glass in the food I bought from them. It severally cut my throat and stomach, I had to be rushed to hospital for surgery. I missed 3 weeks of work and lost my job. Now I have $80,000 hospital bill that I can't pay. Also since I lost my job my house is in forclosure and my wife left me.
    Lawyer: I will take 30% of what we get. *calls MegaFood*
    Lawyer: Hi, we are suing you. We have evidence of glass contamination resulting in injury. We will be running commercials nationally to find other victims.
    MegaFood Lawyer: We will give you 600,000 shut up, never speak of this again, and go away.
    Lawyer: ChaChing!
  • Re:And now... (Score:3, Informative)

    by Jherek Carnelian (831679) on Monday February 25, 2008 @04:59PM (#22551266)
    Indeed, that ruling was just an end-run around the first sale doctrine.

    Those clean-edits people were doing the effective equivalent of buying a book, blacking out certain sentences and pulling out specific pages and then reselling the book.

    Just because a new storage medium inherently prevents direct alteration should not be an excuse to prevent a legitimate buyer from doing something that produces the same end result.
  • Re:And now... (Score:1, Informative)

    by Anonymous Coward on Monday February 25, 2008 @05:36PM (#22551684)
    But that's not what they were doing. For each DVD that they sold, the consumer would get the Original DVD, and the Edited DVD. When they were renting the DVD, for each DVD that was rented, they had purchased an un-edited DVD that they would hold.

    The content producers got their money. It really is exactly as the original poster said. It's like buying a book, blacking out certain sections, and then reselling it.
  • That is not correct. (Score:4, Informative)

    by pavon (30274) on Monday February 25, 2008 @05:43PM (#22551772)

    Try purchasing one copy of a book, re-printing it under a new binding with only the content you don't want to censor, then selling it in large quantity -- and see how long you can get away with it.
    For every DVD that Cleanflix sold, they purchased an original copy at full price. The issue the directors/producers had with them was that they were changing the movies, not that they weren't getting paid.
  • Re:And now... (Score:3, Informative)

    by TheRaven64 (641858) on Monday February 25, 2008 @06:07PM (#22552038) Journal

    This sort of things is one of the things that I wanted the Blu-ray and HD-DVDs to provide. Basically the content would still be there, but people that didn't want to view it could change a setting and those things would be skipped
    This feature is already there with DVDs. You can define multiple paths through the same video files. The idea was that you could put the cinema and director's cuts on the same disk and have a menu option to select the one to watch. Then the studios realised that they could make more money selling them on separate disks.
  • Re:And now... (Score:4, Informative)

    by milsoRgen (1016505) on Monday February 25, 2008 @06:24PM (#22552264) Homepage

    They all make a profit from someone else's IP.
    Yes but they don't edit the product without consent from the owners of the IP. And even then it's for time allotment, commercial interruptions or intermissions.

    What exactly is objectionable about me buying a copy of the movie making changes to it and selling that changed copy for a profit?
    A.) The fact you are potentially destroying the artistic vision set forth by the creators of the conent.
    B.) The issue at hand was editing in regards to 'moral' objections. Which was nothing more than pandering to religious types that attempt to engage in a war mainstream culture.

    You're attempting to argue that is someones right to watch this edited, family friendly media. And sure, I suppose they do have that right. But the sooner we ditch these archaic concepts ingrained in the major monotheistic religions the better off we will be.
  • Re:Wow. (Score:2, Informative)

    by Darinbob (1142669) on Monday February 25, 2008 @07:50PM (#22553232)

    Only because some citizens do everything possible to not get on a jury. As the old joke goes, juries are made up of people too stupid to get out of jury duty. (How many times have you done your civic duty and served on a jury?)
    Once I've served on a jury. I've been questioned as a potential jurist several other times before being dismissed. I never tried to get out of it by lying. There's a big difference between "stupid" and being ethical.

    The problem perhaps is with the big cases that are well known and likely to take several months to try. It becomes very difficult to find a full jury that can sit on such a case without hardship and also not have formed prior opinions. There are also complicated civil suits where the jury is expected to understand and keep track of tecnical issues over a long period of time. But it seems these cases that are most commonly read about in the news which cause people to say "juries are morons". It ignores all the other cases that take only last a week or two which were comprised of reasonable juries.
  • Re:And now... (Score:3, Informative)

    by A nonymous Coward (7548) * on Monday February 25, 2008 @08:03PM (#22553354)
    That's part of the problem. With the way things are now people are getting patents to last for nearly a hundred years.

    No, the problem is your ears, or eyes, or possibly what's between them. You are confusing copyrights and patents.
  • Re:And now... (Score:3, Informative)

    by I confirm I'm not a (720413) on Tuesday February 26, 2008 @12:47AM (#22555406) Journal

    No, they aren't confusing copyrights and patents. Read what they said, read what they're replying to, then engage your brain.

    > > we can outwait patents, which only last 20 years...

    > That's part of the problem. With the way things are now people are getting patents to last for nearly a hundred years.

    They were pointing out that the patent system is being gamed so that patents last as long as copyrights. How this works is a new patent is submitted, adding very little to the previous patent but claiming to be completely novel.

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