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Ten States Pass Anti-Patent-Troll Laws, With More To Come 64

Posted by samzenpus
from the get-under-the-bridge dept.
An anonymous reader writes "With patent reform stalled in the Senate, many states have decided to take up the issue themselves. 'As states kicked off their legislative sessions this winter, lawmakers responded to the threats against small businesses by writing bills that would ban "bad faith patent assertions" as a violation of consumer-protection laws. The bills target a specific type of patent troll: the kind that sends out vaguely worded letters demanding licensing fees. The thousands of letters sent out by the "scanner trolls" at MPHJ Technology are often brought up as a case-in-point. The new laws allow trolls that break rules around letter-writing to be sued in state court, either by private companies they've approached for licensing fees, or by state authorities themselves.'"
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Ten States Pass Anti-Patent-Troll Laws, With More To Come

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  • by Dutch Gun (899105) on Thursday May 15, 2014 @09:23PM (#47014747)

    Unless Texas is on that list, I'll give the states an "atta-boy", but it's not as though it will make a serious difference except for smaller business that can't afford regional offices. And let's face it, they're not the serious problem, since it's really only larger firms and patent trolls who go out of their way to set up offices in East Texas that are the problem.

    Well, here's hoping that the federal government does the right thing here eventually. I'm typically not one to jump with knee-jerk reactions in favor of government regulation, as over-regulation gone overboard can have a stifling effect on business. Any reasonable analysis demonstrates massive and obvious problems with the current patent system, and the private sector has absolutely demonstrated an inability to handle this problem in a sane solution. In fact, the private sector has gleefully demonstrated that it's perfectly willing to exploit the situation and actually make a fucking business out of the problem. That's about the time for the government to step in and put the hammer down.

    The only danger is that whenever the government steps in, there's a very real danger of making a problem worse despite all the best intentions. The individual state's efforts real legacy may be of giving some real, working examples of how to potentially fix the issue before it's tried out on a national level - that's certainly not unprecedented.

    BTW, does anyone know why, in fact, the senate's patent reform bill is actually being held up (other than "politics" or "lobbyist")?

    • by Virtucon (127420) on Thursday May 15, 2014 @09:50PM (#47014815)

      Who knows, it was Leahy's call. [techcrunch.com]

      • by Dutch Gun (899105)

        Who knows, it was Leahy's call. [techcrunch.com]

        Interesting, thanks for the link. According to the article at least, it sounds like the bill has been just delayed a bit longer rather than stalling outright. Also, the writer of that article appears optimistic that it could actually pass, which makes sense, given that it's apparently a bi-partisan bill.

        Republicans want the law to require the losing party in a patent-infringement suit to pay the other’s legal fees. A reasonable idea, certainly. Democrats appear worried that some suits that do have merit may not be undertaken, provided the possibility of larger legal fees if an even reasonable suit fails.

        Hopefully they'll hammer out a reasonable compromise. I can see the merits of both arguments here. The big issue is whether there have been any significant number of legitimate patent suits which would o

        • by dryeo (100693)

          Perhaps the Judge should have discretion on the "loser pays" . One of the big problems is how unsymmetrical some cases can be, eg little guy vs big guy

        • by sjames (1099)

          It cuts the other way too. It's just insult to injury if a small defendant (such as the small businesses targeted by the scanner trolls) against a troll ends up on the hook for the troll's legal fees. It could be enough to make even more pay the extortion.

          Loser pays works great as long as confidence in the courts coming to a just decision in spite of a huge disparity of resources between defendant and plaintiff is near 100% AND confidence in the just nature of the laws themselves is about the same. I don't

    • Re: (Score:3, Informative)

      by Paradise Pete (33184)

      Unless Texas is on that list, I'll give the states an "atta-boy", but it's not as though it will make a serious difference

      I don't see how that's the case. It's about the threatening letters, not the place where a suit might be filed. If they're sending the letters to a company located in one of those states, it doesn't matter where the troll is located or where the suit might be filed.

    • by Belial6 (794905)
      It doesn't really make sense for anyone to be against federal regulation concerning patents, since the very existance of patents are federal regulations.
      • I agree.

        Patents are prescribed by the Constitution, making Federal regulations regarding same perfectly reasonable and correct.

        • by Belial6 (794905)
          I'm not disagreeing with you, but my point was that it isn't because patents are prescribed by the Constitution. It is because patents ARE regulation. Shoes are footwear. Republicans are people. Bicycles are two wheeled vehicles, and patents ARE government regulation. It goes beyond reasonable and correct. Regulation is what patents are made of.
  • I would try to avoid states that pass laws like this. Clearly this is a Federal matter.

    • That is the whole idea. They want the trolls to avoid their states. Even unenforceable laws have a deterring effect, since the troll can still be dragged to court and incur sky high legal fees despite having the case dismissed eventually, ten years later.
      • by mysidia (191772)

        It discourages the trolls to operate, period, as long as the anti-trolling laws do not interfere with federal law, or patent rights protected by federal law, [which would lead to a legal challenge against the state act] ---- the rules of commerce, how property/trade work, dispute procedure, your abaility to send threatening blackmail/extortionate messages can be limited by the states.

        That is the whole idea. They want the trolls to avoid their states.

        However, if they do avoid my state, and the troll d

    • by sjbe (173966) on Friday May 16, 2014 @07:38AM (#47016541)

      I would try to avoid states that pass laws like this. Clearly this is a Federal matter.

      And Congress has been shown themselves to be right on top of this issue too... [/sarcasm]

      Congress has shown zero appetite for dealing with this matter. Until they can actually be bothered to do something in the interest of the country I'm fine with states taking up the slack where they can.

  • Pointless (Score:4, Interesting)

    by wiredlogic (135348) on Thursday May 15, 2014 @09:58PM (#47014837)

    This is pointless since patents are administered by federal law. Any troll wanting to extort money is going to sue in an out of state venue (preferably Texas), immediately stepping up to the federal courts.

    • Re:Pointless (Score:5, Informative)

      by Theaetetus (590071) <theaetetus DOT slashdot AT gmail DOT com> on Thursday May 15, 2014 @10:09PM (#47014883) Homepage Journal

      This is pointless since patents are administered by federal law. Any troll wanting to extort money is going to sue in an out of state venue (preferably Texas), immediately stepping up to the federal courts.

      Federal courts can apply state laws, too. Happens all the time - most of the civil cases that go to federal court are not because of any federal law, but because of diversity jurisdiction: plaintiff in one state, defendant in another, amount in controversy over $75k, and you've got federal subject matter jurisdiction. But they apply state contract or tort law as necessary.

      That said, there is a preemption issue here... States can't rule on the validity of a patent, because that explicitly is federal law. If bringing a suit under one of these laws means you're claiming the patent is invalid, then the state law may be preempted and your case would get bounced.

      On the other hand, if you're just alleging a false claim generally, without needing to rule on the underlying patent, then you're probably okay. For example (and yes, I know it's a copyright case not a patent case, but the underlying concept is the same), Righthaven sent out a bunch of letters threatening suit for copyright infringement... for copyrights that they didn't own. Ruling that those threats were frivolous and extortionate doesn't require any ruling as to whether the copyrights were valid or that there was infringement. The same thing could be done here: if some troll sends out threatening letters for a patent they don't actually own, then they'd be in trouble. But honestly, who's going to do that, when it's such an obvious failure?

      /I am a patent attorney; I am not your patent attorney. This post is only for (my) amusement purposes only.

      • Re:Pointless (Score:5, Interesting)

        by Todd Knarr (15451) on Friday May 16, 2014 @12:52AM (#47015359) Homepage

        I think in these cases it'd be even simpler: the letters don't actually spell out what part of the patent is infringed or how the recipient infringes it. It'd be the equivalent of sending a letter saying the recipient's violated a contract and has to pay penalties or face a lawsuit, without saying what contract, with who, or how the recipient's violated it. The state should be able to deal with that aspect of it without going anywhere near the patent itself, that kind of behavior should constitute bad faith even if the underlying patent's valid.

        A lot of trolls do send out letters without any basis, because a lot of people will take a cheap settlement rather than spend the money to fight it, go through discovery and all it's costs, and get the suit dismissed. Take a look at the SCO v. IBM lawsuit, where the SCO executives were fairly explicit about not caring whether their claims would stand up or not because it'd cost IBM more to fight and win than to settle so they figured IBM would just settle. Anti-patent-troll laws aimed at this sort of vague accusation help because it forces trolls to be explicit up front about what they're accusing their victims of which gives their victims more opportunity to knock the accusations down early on before it gets expensive.

    • Not pointless (Score:4, Informative)

      by dutchwhizzman (817898) on Friday May 16, 2014 @03:09AM (#47015661)
      This is about the threat letters, not about actual court cases. If they really will have a case, they will start an actual case, is the idea behind these laws. Trying to threaten someone by claiming you will sue them for a high amount of dollars if they don't pay up a few hundred will be made illegal, not actually the actual suing. This is more about the extortion and blackmail part of the letters than the actual court cases that might ensue.
      • Well, 'threaten someone by claiming you will sue them' is probably covered by various laws against fraud and blackmail already. A big problem in the USA is that there are too many incompetent lawyers that don't know law.
  • by Camael (1048726) on Thursday May 15, 2014 @10:01PM (#47014847)

    So, their solution to a badly drafted, overly broad and ridiculously vague piece of legislation is... more legislation? And further, each state wants to introduce its own flavour of law into the picture?

    What a nightmare. Instead of having to deal with one bad piece of federal legislation, you now have 1 federal and potentially 50 state laws to worry about. The only ones rubbing their hands in glee are patent lawyers.

    The only real solution is patent reform, and the stalling members of the Senate [thehill.com] ought to lose their jobs.

    One of the main sticking points for members so far has been a proposal to make it easier for the losing party in a meritless patent lawsuit to pay the winner’s court fees.

    *rolls eyes*

    In the meantime, the rest of the country has to deal with the consequences [eff.org].

    6092 patent lawsuits were filed in 2013, a 12.4% increase over 2012.
    Of the top ten filers of patent lawsuits in 2013, every single one was a patent troll.
    The most litigious patent owner was notorious troll ArrivalStar, which filed 137 lawsuits.
    Patent cases clustered in a handful of federal district courts, with 1495 filed in the Eastern District of Texas and 1336 in the District of Delaware (including 900 before a single Eastern District of Texas judge).

    • 6092 patent lawsuits were filed in 2013, a 12.4% increase over 2012.

      That figure's a bit misleading. Thanks to the AIA and several legitimate patent reform acts, patent trolls can't sue "Microsoft and Google and Apple and Joe Schmoe from Florida" in one suit anymore, something they did to force reasonable venues in Texas (halfway between Joe Shmoe and the other parties). So, now they file three suits against Microsoft, Apple, and Google, and leave Joe Schmoe out - 3 times the suits, 75% of the defendants, which is actually an improvement.

    • by eWarz (610883) on Thursday May 15, 2014 @10:27PM (#47014957) Homepage
      Making 'patent law' a nightmare IS the goal behind the laws. If laws are different in every state it makes patent trolling much harder (which makes things unprofitable).
    • Re: (Score:3, Interesting)

      by TubeSteak (669689)

      So, their solution to a badly drafted, overly broad and ridiculously vague piece of legislation is... more legislation?

      The only real solution is patent reform, and the stalling members of the Senate ought to lose their jobs.

      So, your solution to a badly drafted, overly broad and ridiculously vague piece of legislation is... more legislation?

      I'll never understand the mindset that thinks passing laws and creating regulations is bad.

      The only way that could possibly work is if you think the world is already perfect as is, or if you want judges to decide everything instead of Democratically elected representatives (which includes some, but not all judges)

  • by Animats (122034) on Thursday May 15, 2014 @11:39PM (#47015169) Homepage

    Most of the "patent troll" problem comes from three law firms. [trollingeffects.org] They're the only ones who've sent out more than two demand letters, according to the EFF.

    • by Anonymous Coward

      This site is hilarious, but in no way relates to the actual number of demand letters sent by a long shot.

  • Is this another +5 Troll thread?

  • by Anonymous Coward

    Ten less states where Apple can sue Samsung?

    • I've been wondering whether Samsung could file counter suits in these ten states against Apple, to fight fire with fire.
      • by gnupun (752725)

        Please, Samsung copies Apple phones so slavishly... every tiny detail. The intellectual property laws are so weak protecting Apple. For eg: iphone 5c comes in bright colors white, blue, pink, green and 5s is gold. Guess what, Samsung now has gold, green, white, blue, pink phones with a slightly different texture (dots instead of flat color). Granted you can't protect colors, but my point is Samsung copies everything Apple does.

        It would be a fscking joke if Samsung were to sue Apple for copying their stuff.

  • by Z00L00K (682162)

    The title is confusing. Is it "Anti Patent-Troll" laws or is it "Anti-Patent Troll" laws???

    It's a slight difference there in the semantics.

  • At least my "Snarky Internet Forum Post" Copyright will still hold up in a few places.

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