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Patents The Courts

Judge Orders Patent Troll To Explain Its 'Mr. Sham' To Jury 117

Posted by samzenpus
from the that-name-again-is-mr.-sham dept.
netbuzz writes "Judge William Alsup of the U.S. District Court for the Northern District of California has no problem calling Network Protection Sciences (NPS) a patent troll. What he does have a problem with is NPS telling a Texas court that NPS had an 'ongoing business concern' in that state run by a 'director of business development' when all it really had was a rented file-cabinet room and the 'director' was actually the building landlord who merely signed legal papers when NPS told him to do so. Judge Alsup calls the alleged business a 'sham' and the non-employee 'Mr. Sham,' yet he declined to dismiss the patent infringement lawsuit filed by NPS against Fortinet from which this information emerged. Instead, he told NPS, 'this jury is going to hear all of this stuff about the closet. And you're going to have to explain why "Mr. Sham" was signing these documents.'"
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Judge Orders Patent Troll To Explain Its 'Mr. Sham' To Jury

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  • Too bad (Score:5, Insightful)

    by Austrian Anarchy (3010653) on Wednesday September 25, 2013 @06:48PM (#44954677) Homepage Journal
    Too bad there were not any judges like this overseeing the mortgage sham bubble.
    • by slick7 (1703596)

      Too bad there were not any judges like this overseeing the mortgage sham bubble.

      Yeah, like Judge Roy Bean, the law west of the Pecos.

      • Re: (Score:3, Insightful)

        by Oligonicella (659917)
        Bad example, IMO, I'd rather have the current judge. He's letting them hang themselves. Bean was simply a murderer with a posse. Hanged dozens of completely innocent people.
        • Re:Too bad (Score:4, Informative)

          by MaskedSlacker (911878) on Wednesday September 25, 2013 @08:33PM (#44955337)

          The wiki suggests you need to learn the difference between Hollywood and history: https://en.wikipedia.org/wiki/Roy_Bean [wikipedia.org]

          • by Anonymous Coward

            ...learn the difference between Hollywood and history...

            Why should he? He's American!

          • by TheCarp (96830)

            wow, what a piece of work. Truth is almost as insane and disgusting as the legend... when challeneged to a shooting match, the implication being over a woman, he wanted to make it a duel? Plus:

            Bean did not allow hung juries or appeals,[9] and jurors, who were chosen from his best bar customers, were expected to buy a drink during every court recess.[10] Bean was known for his unusual rulings. In one case, an Irishman named Paddy O'Rourke shot a Chinese laborer. A mob of 200 angry Irishmen surrounded the cou

    • Re:Too bad (Score:4, Interesting)

      by fustakrakich (1673220) on Wednesday September 25, 2013 @08:50PM (#44955433) Journal

      Are you kidding? The banks are a full on mafia operation, like the Borgias in the Vatican (original storyline for The Godfather), absolutely untouchable. Cross them, and you won't see the next sunrise. This guy is a flea, like Bernie Madoff.

      • by dywolf (2673597)

        that's not hte original story for the godfather.

        The Godfather is a movie, based on a book, based on another movie.

        "Paramount Pictures released the film The Brotherhood starring Kirk Douglas as a mafia don. While it was a financial flop, Paramount's production chief Robert Evans commissioned Mario Puzo to finish a novel with similar themes and plot elements, and bought the screen rights. Directed by Francis Ford Coppola, The Godfather became a huge success [...]"

    • Ghengis Khan is said to have said: it's not enough that we win, they must lose. Seems the only way to deal with patent trolls.
  • by PerformanceDude (1798324) on Wednesday September 25, 2013 @06:50PM (#44954685)
    William Alsup deserves a medal for finally pushing those trolls a little. Too long have they been getting away with venue shopping and the abusive use of threats to sue. Time to sit back and watch the fireworks...
    • by Anonymous Coward on Wednesday September 25, 2013 @08:37PM (#44955361)

      William Alsup deserves a medal for finally pushing those trolls a little. Too long have they been getting away with venue shopping and the abusive use of threats to sue. Time to sit back and watch the fireworks...

      When this becomes the de facto standard on manhandling shell company tactics like this in a courtroom, complete with prior case law to ensure it, then I'll break out the bubbly.

      Until then, don't even consider this to garner the masses attention span for longer than the usual 17 seconds they give it. And we will still watch multi-billionaires get away with financial murder, laughing all the way to the bank with their government subsidized too-big-to-fail bonus checks, not giving two fucks about anyone they leave in their wake.

    • by Darinbob (1142669) on Wednesday September 25, 2013 @08:47PM (#44955417)

      However consider if you were on the Jury. Would you want to stick around another week or month to listen to this stuff, without being paid, just so that the judge can teach the guy a lesson?

      • by kenshin33 (1694322) on Wednesday September 25, 2013 @08:55PM (#44955455)
        yes, where de I signe ?
      • Re: (Score:2, Interesting)

        by Anonymous Coward

        If you're going to be on a jury, you might as well get to do some justice.

      • by shentino (1139071)

        If you DID want to, would you even make it past voir dire?

      • Considering how important this is, YES!I would listen, openly and honestly, then vote to hang the guy. :P

        Seriously though, I'd serve on that jury gladly and do my best to be fair and decide based on issues of law and evidence presented, not my own preconceptions.

        Of course, it's easy for me to say - I'm a geek, this is important, and my company has a pretty good jury duty policy.

        • by Darinbob (1142669)

          However the choice is the jury really has is not that important, a jury deciding against the patent troll ultimately gives the same result as having the judge dismiss the case. The only reason the judge appears to be doing this is to get more statements on the record that could be used as evidence in an appeal.

  • by Anonymous Coward on Wednesday September 25, 2013 @06:54PM (#44954705)

    He was also the trial judge in Oracle v. Google.

    I think I like the guy.

  • by fahrbot-bot (874524) on Wednesday September 25, 2013 @07:00PM (#44954743)

    ... when all it really had was a rented file-cabinet room and the 'director' was actually the building landlord ...

    Don't cheap out on the props for your cover story.

  • by themushroom (197365) on Wednesday September 25, 2013 @07:00PM (#44954747) Homepage

    because Miss Swindle was stuck in meetings.

    • by steelfood (895457)

      And Mrs. Sham was out shopping with friends.

    • Re: (Score:3, Funny)

      by 91degrees (207121)
      And in a twist, it turns out that Mr. Sham and Miss. Swindle were in fact the names of legitimate business partners in "Patent Trolls" - a legitimate trading name for a division dealing with IP licencing for fishing equipment - and were based in Phony house, Fake Steet, Scamton, TX.
  • I would like to listen to the audio. It must be very interesting. Anyone has a link?

  • by Anonymous Coward

    For the record, please state your name. "Sam T. Sham". Now, Mr. Sham, can you explain why you signed those documents? Yes, your honor A " Wooly Bully [wikipedia.org] made me do it".

  • /mourn Groklaw (Score:5, Insightful)

    by MrDoh! (71235) on Wednesday September 25, 2013 @07:17PM (#44954859) Homepage Journal
    It's cases like this that make me miss Groklaw even more. They'd have someone there in the court to report on all this, and explain the legal shenanigans going on, with links to prior cases of the people involved trying the same thing, and probably how Microsoft is funding them!
    • Make up your mind Mr. Sham. Are you Mr. Doh or Miss Groklaw?
    • by Cassini2 (956052)
      Does anyone know what happened to the effort to modernize / replace groklaw? In order to overcome PJ's concerns?
    • It's cases like this that make me miss Groklaw even more. They'd have someone there in the court to report on all this, and explain the legal shenanigans going on, with links to prior cases of the people involved trying the same thing, and probably how Microsoft is funding them!

      My Kingdom for mod points! (not saying that that I actually HAVE a Kingdom).

  • If you were paying the legal bills (easily more than $20k per month and $100-200k for the actual trial), you really want bogus claims or the entire lawsuit dismissed. Even if you win, you probably won't recover your legal fees and nothing for your time. I've been there.
    • by roc97007 (608802)

      If you were paying the legal bills (easily more than $20k per month and $100-200k for the actual trial), you really want bogus claims or the entire lawsuit dismissed. Even if you win, you probably won't recover your legal fees and nothing for your time. I've been there.

      This is true, but... IANAL.... if the trial goes through and the defendant wins, doesn't that help set a precedent?

      • Precedents only count when they are in favor of the side with money. In most cases the poor sap getting sued doesn't have any access to prior cases and will just settle via mail to avoid the scary court time. It's ironic that it doesn't matter if they lose every case, that they are still very profitable. These guys ruin their law careers but likely make tens of millions in the process. You may call this case "when the troll finally gets his" but he likely sees it as "time to cash out"

        • by muridae (966931)

          BZZZT WRONG!

          Precedent is only set at the appeal level, not after the initial trial. So, if the troll wins the first trial, then loses on the appeal, precedent against patent trolls would be set. If the troll loses now, and continues to lose every appeal, there would still be no precedent. It is only set when a verdict is overturned.

          Not to say that the ruling can't be cited and referenced in other court cases, but just that it does not become binding like a precedent is. And besides, a precedent is only bind

          • by anagama (611277)

            BZZZT CLOSE!

            If the troll loses now, and continues to lose every appeal, there would still be no precedent. It is only set when a verdict is overturned.

            A precedent at the appellate level can be set when a trial court's decision is affirmed. What is of most importance are the legal issues that form the basis of the appeal. This case appears to have the potential to be a significant decision on venue no matter who wins at the trial court level, providing of course there is an appeal of the venue decision.

            In

            • by muridae (966931)

              my law knowledge only goes so far, and is mostly for contracts involved in photography. But, even though this case is at an appellate level court, it's still not an appeal case, just a case that the local court said 'forget it, you do all the work'. Probably my brain just misread the section on precedent from 'must be from an appellate level' as 'must be from an overturned appeal'. which is completely possible. I was reading only for contracts and right of publicity (limited areas affected because of certai

          • by roc97007 (608802)

            Thanks. This is why I am not a lawyer. So instead of precedent, I should have said, if the troll loses, doesn't that create a ruling that can be cited and referenced in other court cases? I'm looking for a reason why the decision was made to continue with the trial, when the troll has suffered a major (and deserved) setback.

    • by belmolis (702863)
      I suspect that the judge is pretty confident that they are going to lose and that in view of their extensive misconduct he will award costs to the plaintiff.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      The judge called NPS behaviour "litigation misconduct" and demanded that they explain why it is not to the jury. If they fail to explain or if they refuse to explain then the case will be decided as misconduct on their own actions. If it was dismissed these asshats and their lawyers would have another chance against someone else somewhere else, if the case is shown to be based on misconduct then this company and it's lawyers will be facing a much harder time in every other court action. If I was one of the

  • by Anonymous Coward on Wednesday September 25, 2013 @08:12PM (#44955229)

    Not sure if this is widely know, but the Eastern District of Texas is horribly corrupt. All the patent trolls have an "office" there so they can sue everyone in that district. Why? Because the court system is infamously plaintiff friendly. Just about any bullshit argument you can make will fly. Doesn't matter if pretty much all cases get overturned on appeal, the plaintiffs get what they wanted: costing the defendants lots of money, forcing most all to settle. And the district gets what they wanted: lots of lawyers and experts flying in to the small towns pumping up the local economy. Those laws congress is mulling over can't get passed fast enough.

    • by Anonymous Coward

      From what I understand, its a popular district because its one of the least overloaded district courts. Cases that elsewhere would take years can go through Eastern Texas under a year. That way, trolls can go onto their next target quicker, and with a court ruling in their favor (if it happens), other companies give up quicker. However, from the actual rulings, it seems like a patent troll case is as likely to win there as anywhere else.

      Now if you want a corrupt court system, check out the circuit court

    • by raymorris (2726007) on Thursday September 26, 2013 @12:55AM (#44956823)

      And yet, it seems even east Texas is getting tired of seeing these same patent trolls in their courts every week.

  • it is kind of absurdly low hanging fruit. When we get a case with a judge laying the smack down on a patent troll firm abusing actual patents they own, that is run by actual lawyers with a real office, then we will have news.

    • The news is, that patent trolls will have to invest in real offices with real people staffing them. Not only that, but the chances that even if they have a sham company set up to protect them from getting hurt if it explodes in their face, they may still be found liable for the damages of the party they sued. If it's obviously a sham company set up for just such a case, I doubt any judge or jury will let it fly and give the actual trolls a break.
  • Plead the 5th?
  • I am the master of sham I polished my skills in the army where I had lots of sham points. I am the master of sham sir sham alot. How else do you think you get to be top, Invent shampoo or something.
  • by Bruce66423 (1678196) on Thursday September 26, 2013 @02:14AM (#44957115)
    If the landlord was acting as the employee of the company, then the company should be paying social security payments on his earnings, and his rent includes pay as an employee. It's an approach that worked against Al Capone...
  • Rarely does a court decide that a company is a sham company. If this precedent were to take hold, then Google and Apple and Microsoft et al would be fucked since they have all kinds of sham companies set up in Ireland and and elsewhere to which they locate the profits from their American business activities. You can do almost anything and still not be called a "sham" corporation by a court so this must be a (good) judge who really has it in for patent trolls. May he be fruitful and multiply.

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