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Patents The Courts

Patent Troll Ordered To Pay For the Costs of Fighting a Bad Patent 191

Posted by timothy
from the once-in-a-while-justice-peeks-through dept.
We mentioned last year that FindTheBest CEO Kevin O'Connor had taken an unusual step, when confronted with a demand by patent troll company Lumen View that the startup pay $50,000 for what struck O'Connor as a frivolous patent: He not only refused, but pledged to spend a million bucks, if necessary, to fight Lumen View in court. Now, as Ars Technica reports, O'Connor has succeeded on a grand scale. Before trouncing Lumen View in court, Ars reports, "FindTheBest had spent about $200,000 on its legal fight—not to mention the productivity lost in hundreds of work hours spent by top executives on the lawsuit, and three all-company meetings. Now the judge overseeing the case has ruled (PDF) that it's Lumen View, not FindTheBest, that should have to pay those expenses. In a first-of-its-kind implementation of new fee-shifting rules mandated by the Supreme Court, US District Judge Denise Cote found that the Lumen View lawsuit was a 'prototypical exceptional case.'"
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Patent Troll Ordered To Pay For the Costs of Fighting a Bad Patent

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  • Re:but (Score:5, Interesting)

    by jythie (914043) on Monday June 02, 2014 @08:23AM (#47145827)
    To be fair, it is how our legal system was crafted. The US has a strong streak of 'handle your own problem, power to control your own fate' to it, and the civil suit system was built to support that. There are lots of crimes which in other countries would be prosecuted by one agency or another (for better or worse) but in the US the only redress one has is a civil suit. Even in situations where there are criminal laws on the books, the complaints about the police not doing anything even when supplied with all the evidence they need are significant. Actually convincing a prosecutor to go forward with your case can be an exercise in frustration.
  • Re:but (Score:4, Interesting)

    by jythie (914043) on Monday June 02, 2014 @08:50AM (#47145975)
    I had a similar thought. Yeah permits and inspection costs are non-trivial, but they are no where near the material or labor costs unless you are stripping an old house for parts (i.e. free materials) and using near-slave immigrant labor. Though at that point the bribes needed would probably be greater then the permit costs too.
  • by Anonymous Coward on Monday June 02, 2014 @08:58AM (#47146023)

    My favourite sentence from the summary in the first link:

    The patent troll's attorney also made the claim that calling someone a 'patent troll' was actually a 'hate crime' under 'Ninth Circuit precedent' and threatened to file criminal charges — unless they settled the civil case immediately, apologized, and gave financial compensation to the troll.

  • by rapturizer (733607) on Monday June 02, 2014 @09:03AM (#47146047)
    FindTheBest probaby will spend the money. The good part of this ruling is that there are law firms that will seek out small businesses to defend them from deep pocketed patent trolls. They will develop the methods to aggressively pursue the money, and will even be happier if they find trolls that send out nearly identical letters to multiple companies and can achieve class action status. In my opinion, this may be one of the few good reasons for these law firms to exist.
  • by Anonymous Coward on Monday June 02, 2014 @09:21AM (#47146119)

    The problem is that there are not enough examiners. Apparently as an examiner you have about 2 minutes to look at a patent and say yay or nay.

  • by Greyfox (87712) on Monday June 02, 2014 @09:28AM (#47146141) Homepage Journal
    If you have a claim to their assets, you could probably still go after all the patents that company owns and presumably any of the licensing fees they had managed to collect. Denying the people pulling those strings as much money as possible still has some value. Now that the precedent has been set, more companies might elect to pursue this course of action, which could put a serious dent in the patent troll business plan. And if you suspect a corporation has just been formed to serve as an alias, you can still go after the assets of the individuals holding that corporation.
  • Re:but (Score:5, Interesting)

    by Idarubicin (579475) <allsquiet@ho[ ]il.com ['tma' in gap]> on Monday June 02, 2014 @09:48AM (#47146251) Journal

    It's over $30,000 in permits to build a small two bedroom house (say, 1000 square feet) in Lake County, CA, counting the water connection fee and other bullshit.

    So, not just the price of the building permit, then?

    The purpose of development charges is to defray (some of) the costs to local government that they would otherwise incur for doing things like connecting your new home to the water, sewer, electrical, and any other utilities; construction of roads and streetlights; construction and purchase of additional emergency services equipment (fire trucks and fire houses, etc.); construction or enlargement of water reservoirs, sewage treatment plants, and electrical substations....

    In other words, there's a heck of a lot of new infrastructure capital costs associated with new expansion of a community--costs that wouldn't be incurred without the new construction. (The rest of your comment notes how precious a commodity water is, and how difficult it is to secure access to more of it.) Instead of loading those costs on to people already living in town, the municipalities put the costs on the developers, who in turn pass them on to the new home buyers.

    If you were to instead demolish an existing home and replace it with a new one of similar size, the building permit costs would be far less than $30,000, since the home would already have water, sewer, roads, electrical service....

  • by deniable (76198) on Monday June 02, 2014 @09:50AM (#47146271)
    You're also expected to be a subject-matter-expert on every application that crosses your desk. And remember, you have 2 minutes to review an application written by lawyers paid to write confusing applications.
  • by msauve (701917) on Monday June 02, 2014 @10:10AM (#47146421)
    "you have 2 minutes to review an application written by lawyers paid to write confusing applications."

    This.

    Patents are supposed to be provided in exchange for an inventor disclosing the invention for future public benefit. But, they're written in such an obtuse manner that they can't be used that way - they're expected to be used to extract money out of the people who come up with something similar, not provide a workable explanation of how to make something useful.

    The solution is for examiners to simply outright reject any patent which isn't readily understandable. A person "skilled in the art," shouldn't have to learn deliberately obtuse patent-speak to even begin to understand a patent.
  • by sjames (1099) on Monday June 02, 2014 @10:24AM (#47146513) Homepage

    Change that to their boss is fired and it might work.

  • by epine (68316) on Monday June 02, 2014 @02:02PM (#47147963)

    This could all be fixed by issuing the original patent provisionally, and mandating a second, more thorough review by the patent office when the decorative sabre is first unsheathed.

    Maybe the target of the action files an application for second-stage examination and ponies up a small fee on the order of $1000, then the patent office adds the patent to their public "notice of re-examination" board for sixty days to solicit any other public input. After the examination, the target recovers from the patent holder $250 for every claim shot down and another $5000 if the entire patent falls (the patent infringement action could permit the patent holder to exercise only certain claims, so as not to place themselves on the hook for the claim-reversal penalty award on every frivolous claim, but they still owe the $5000 penalty award if claims associated with the infringement action is reduced to the empty set).

    Second-stage ratification doesn't need to be a big thing. It only needs to be as big as what the first-stage examination was originally presupposed to accomplish when this whole system was first set up, back when it was possible for a patent examiner to have his or her finger on the pulse of innovation to any extent at all, before human knowledge blue-shifted by a further six orders of magnitude.

    To a first approximation, given enough eyeballs, all claims are hollow.

    What we really need is a mechanical turk to challenge claims of novel art and claims of application (which should be separated). If the patent holder wished to instigate second-phase examination without filing against an adversary (so as to increase their litigational certitude before uncasking their powder), they would need to post $10,000 as a bounty fund. The public would be invited to submit arguments against any particular claim (much like a bug-tracking system). Maybe there's a $5 fee per hundred words (minimum $5) for each argument filed. The first argument (by filing time) to unseat a claim is awarded a $250 refutation bounty from the bounty fund.

    Even better, people are allowed to pay $5 to click "me too". All the "me too" payments are funnelled to the person who originally filed the item (small profit, same day). All parties split the bounty (including the item owner) if that item scores (the incentive to be the fiftieth person to click "me too" is not attractive; by interpolation, the "me too" button functions as a prediction market).

    I think we just need to bring a mechanical turk free market processes to bear on the patent approval system, and abuses would soon be dramatically scaled back.

    If a company just wants to accumulate patents it could potentially waggle, nothing changes, and all the same press releases can still be penned (mentions of patents pursued would mean less, now being more frail in the waggling, but this is the usual erosion of sense anyone shrewd has long observed).

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