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Patents Businesses Displays The Courts Hardware

Vizio, Destroyer of Patent Trolls 104

An anonymous reader writes: We read about a lot of patent troll cases. Some are successful and some are not, but many such cases are decided before ever going to court. It's how the patent troll operates — they know exactly how high litigation costs are. Even without a legal leg to stand on, they can ask for settlements that make better financial sense for the target to accept, rather than dumping just as much money into attorney's fees for an uncertain outcome. Fortunately, some companies fight back. TV-maker Vizio is one of these, and they've successfully defended against 16 different patent trolls, some with multiple claims. In addition, they're going on the offensive, trying to wrest legal fees from the plaintiffs for their spurious claims. "For the first time, it stands a real chance, in a case where it spent more than $1 million to win. Two recent Supreme Court decisions make it easier for victorious defendants to collect fees in patent cases. The TV maker is up against a storied patent plaintiffs' firm, Chicago-based Niro, Haller & Niro, that has fought for Oplus tooth and nail. ... For Vizio, the company feels that it's on the verge of getting vindication for a long-standing policy of not backing down to patent trolls."
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Vizio, Destroyer of Patent Trolls

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  • by justthinkit ( 954982 ) <floyd@just-think-it.com> on Saturday April 25, 2015 @01:49PM (#49551491) Homepage Journal
    I will never understand why the loser doesn't pay the winner's fees.
    • by YrWrstNtmr ( 564987 ) on Saturday April 25, 2015 @01:59PM (#49551517)
      A large company would be able to financially destroy an individual, depending on the outcome.

      You may think you have a valid case. But could you pay for the legal fees of Sony/Visio/Target/AMD if you lose?
      • So instead the reverse scenario commonly plays out -- small wronged person doesn't dare sue big corporation.
        • It would actually be worse. If I had to pay the legal fees of X Corp if I lost, I'd probably be far less inclined to take them to court.
          Currently, all I'd have to pay is my legal fee, and whatever fine may be imposed.

          If I had to pay their legal fee as well...I'd probably think twice.

          5 corporate law talking guys x 2 weeks x $200/hour each....a single individual would be screwed if he lost.
          Now..if we stipulate that the 'winner' gets no more 'legal fees' than the loser paid to his legal team....that might be
          • by justthinkit ( 954982 ) <floyd@just-think-it.com> on Saturday April 25, 2015 @02:22PM (#49551593) Homepage Journal
            Simple way to level things -- make the compensatory stakes (not counting fines) the smaller of the two sets of legal fees. That way the small person has nothing to lose if they are in the right, and an acceptable cost if they are not. Similarly, the big corp. has nothing to lose from frivolous lawsuits, and loses its mightily intimidating club when it is in the wrong.
            • by ShanghaiBill ( 739463 ) on Saturday April 25, 2015 @04:12PM (#49551929)

              Another solution is to make "winning" and "losing" non-binary. So if the defendant offers to settle for $2M, the plaintiff refuses the settlement, and the case goes to trial and the judgement is only $1M, then the plaintiff won, but should still be considered the "loser" since they refused a more than reasonable pre-trial settlement. This offer of judgement [wikipedia.org] reform has been implemented in US Federal courts, and in some states.

              • by whoever57 ( 658626 ) on Saturday April 25, 2015 @04:46PM (#49552053) Journal
                That's how it works in the UK. It's been like that for a long time.
              • Yet another version that exists in some Dutch-Roman court systems: both parties always lose. Sort of. The way it works is the judge in a civil case assumes fault on both sides. But of varying degrees. The court determines amount of damages and degree of guilt of each party. They then each pay the other that percentage of the damages. If the judge finds they are equally guilty nobody gets any money. But say it's a million dollar damages and the judge finds one party 75% guilty and the other 25% guilty. The n

            • by gnasher719 ( 869701 ) on Saturday April 25, 2015 @05:33PM (#49552207)
              Simple way to level things is what is used in Germany - fees are limited to a fixed small percentage of the value being argued about, but if you demand a large amount and get only a small amount, you actually count as the loser (so a large corporation suing you for 100 million dollars and awarded $100 would actually pay 99.9999% of the total cost).

              In the case of patent trolls demanding huge money, even if they are rewarded a small amount, they would have to pay all the cost.
            • Simple way to level things -- make the compensatory stakes (not counting fines) the smaller of the two sets of legal fees. That way the small person has nothing to lose if they are in the right, and an acceptable cost if they are not.

              Unfortunately, that would mean the judge might not review the fee schedule. This induces a corporate attorney to assign all his compensation and overhead for a period of months (even if he did other tasks during that period). It would also encourage big-fee-but-a-secret-kic

            • The right way to level things (in all court dealings) would be to have both parties pay into a legal fund that compensates the lawyers for both sides. One side having more money should not entitle them to more power in court. If either side wants to contribute more so that the lawyers on both sides are better, that's great - go ahead. But the practice of buying a verdict by outspending your opponent on lawyer power should not be allowed.

              • by whit3 ( 318913 )

                The right way to level things (in all court dealings) would be to have both parties pay into a legal fund that compensates the lawyers for both sides.

                In the US, law is based on the Roman model, with each party allowed to hire a representative/advocate. There ARE other models; in Sharia law, I'm told, the judge is the investigator for both sides of an issue. Alas, by the US constitution, 'due process' is required, and it is customary to have each party hire/choose/command their own representative.

                A 'le

          • by Anonymous Coward on Saturday April 25, 2015 @02:38PM (#49551639)

            $200 per/hour? A first year associate at most corporate law firms bills around $350 an hour, particularly in IP. Most IP partners bill at approximately $750 - $900 per hour.

          • You are severely underestimating the legal costs, in cost per hour, number of attorneys involved and the amount of time. Going to court costs $1M+.

        • by Anonymous Coward

          So instead the reverse scenario commonly plays out -- small wronged person doesn't dare sue big corporation.

          What makes you think you can even representation? If a lawyer has to spend countless hours fighting a big corp who has the resources to fight until the plaintiff dies, why would he do that - especially working on contingency fee? But they don't work on contingency fee. When you have to fight to enforce your patent, copyright, or trademark, those lawyers do NOT work on contingency. It's all cash baby!

          Loser pays regardless. Been there, done that, got the T-Shirt.

          • Re: (Score:2, Informative)

            by Anonymous Coward

            That isn't true at all. I know because I have represented many people on a contingency fee basis. However, like most patent attorneys, before representing someone on a contingency basis, I make sure that a) their patent is good, and b) there is money to be made from enforcing the patent.

            However, most patent lawyers will not represent a patent holder in an IPR proceeding on a contingency basis. Because IPR proceedings are now the norm, any patent holder must have a warchest of several hundred thousand dol

        • by jbolden ( 176878 )

          Small wronged person who is sure they have a solid case which they can prove can now sue big corporation and because it is rarer is more likely to be believed
          Small wrong person who has an iffy case can't sue.

      • You answered your own question. Make a law that if it's a corporation sues an individual, the corporation has to pay if it loses. If a corporation sues a corporation, or a person sues a person, it's the way it is already.

        What's the difference? A completely disproportionate amount of power and leverage. A billion dollar company (or the government!) shouldn't be able to sue and automatically win against a single person just because they can't afford to defend themselves.

        It's not difficult to see how a lar
      • by jbolden ( 176878 )

        Well you can go bankrupt more easily than they can.

        Also uou could set it at a percentage. You sue Sony for $1m you have to put $100k in escrow that they can collect on for fees. You sue them for $1b you have to put $100m in escrow.

    • I will never understand why the loser doesn't pay the winner's fees.

      I won't either. Where I come from it is the looser who pays the entire cost of the proceedings, the idea being that you better be damn sure of your case before bothering the courts with a lawsuit. It's not a cure-all though since it has lead to people trying to bringing lawsuits through shell companies who then declare bankruptcy when they loose the suit. It is nevertheless better than the US system where a party suing somebody does not have to worry automatic financial consequences if they loose. It encour

      • by raymorris ( 2726007 ) on Saturday April 25, 2015 @02:12PM (#49551561) Journal

        Suppose you bought a car which had a significant safety defect. You sue the car company. After a spending a million dollars on lawyers and experts, the company's lawyers convince the judge that you filed suit in the wrong court, so you lose. Now you owe the car company a million bucks. That type of outcome would happen often enough that it would be very, very rare for anyone to sue someone with more money than they have.

            Instead, the fees are based on fairness- if you file a frivolous suit, you can plan on being ordered to pay the defendant's costs. Also, if you clearly CAUSE a suit, you can be ordered to pay the other party's costs. As an example, suppose you write to the car company asking them to fix the defect, at a cost of $350. They give you the run around for two years, promising to fix it but they never fix it. They admit it's a problem, they admit they caused the problem, but they just won't fix it without being sued. In such a case, you'd probably be awarded costs (and possibly treble damages).

        • by jbolden ( 176878 )

          Instead, the fees are based on fairness- if you file a frivolous suit, you can plan on being ordered to pay the defendant's costs

          The problem is that the courts have a minimalist view of what is frivolous and don't require due diligence or good faith to avoid a claim of frivolousness. If the courts were more aggressive about whether initial fillings were in good faith this would be fine. The loser pays is based on the belief that judges are not going to rulle out huge classes of disputes from being j

        • by DiEx-15 ( 959602 )

          Suppose you bought a car which had a significant safety defect. You sue the car company. After a spending a million dollars on lawyers and experts, the company's lawyers convince the judge that you filed suit in the wrong court, so you lose. Now you owe the car company a million bucks. That type of outcome would happen often enough that it would be very, very rare for anyone to sue someone with more money than they have.

          Instead, the fees are based on fairness- if you file a frivolous suit, you can plan on being ordered to pay the defendant's costs. Also, if you clearly CAUSE a suit, you can be ordered to pay the other party's costs. As an example, suppose you write to the car company asking them to fix the defect, at a cost of $350. They give you the run around for two years, promising to fix it but they never fix it. They admit it's a problem, they admit they caused the problem, but they just won't fix it without being sued. In such a case, you'd probably be awarded costs (and possibly treble damages).

          The flaw with your analogy is that most incidents like you describe result in major class action law suits and not a bunch of individual ones being done by wronged parties. This would even out the costs and pay outs if something were to go wrong or if there is a settlement.

          Also, and I use many of the major incidents with car recalls and defects as of late: Most major corps facing defective equipment class actions would rather settle it quickly than face trial as they might already be in a worse court: th

          • A _design_ flaw that effects all cars of a particular make is likely to result in a class action. A _manufacturing_ defect that effects only your car, or just a few cars, would be an individual suit, not a class action. Also, a class action is often initiated after an individual suit - a plaintiff shows that the defendant owes them, then lawyers put together class action to represent all similarly affected individuals.

            Even when there is a class action first, an individually who has been greatly harmed is

      • The problem is that winning a case isn't entirely dependant on whether or not one is in the right. An expensive legal team could quite possibly prevail and saddle one with massive fees whether or not their client was at fault.
      • Righter tighter
        Lefter looser

    • by darronb ( 217897 )

      Well, the fuzziness of patents has something to do with that. It's easy to justifiably think your patent is infringed and be wrong.

      Patent trolls, on the other hand... yeah, they should pay. Not only pay, but pay triple as punishment. Patent trolls are generally the exception... they just make the news a lot more often.

      If you're a small company that comes up with something nice, patents it, shows it at a conference... then see Competitor's product (who was at the conference too) suddenly have the core of yo

      • by darronb ( 217897 )

        Let me just add that if victory meant getting expenses paid, it'd be absolutely in Competitor's interests to not tell you a thing about how they worked around your patent and force you to sue. Patent lawyers make a lot more money.

        As it stands, Competitor would just say "No, we don't infringe because X"... and a non-troll would evaluate that, realize they can't win, and they'd then not give patent lawyers gobs of money to contest the point.

      • Patent trolls, on the other hand... yeah, they should pay. Not only pay, but pay triple as punishment. Patent trolls are generally the exception... they just make the news a lot more often.

        Trouble is, the real patent troll can't be made to pay. In case you're wondering, the real patent troll is the one that granted, not holds, the meaningless patent.

        If there was anyone responsible for, and profiting from the whole patent mess, it is the patent office for granting all those frivolous patents and pocketing the fees while letting us pay the court costs, and even worse the opportunity costs of people too terrified of patents to do anything.

      • by jbolden ( 176878 )

        A company in the industry doesn't do enough due diligence to check whether X did infringe or not. I don't have any problem with them getting their head handed to them. You have an obligation in your filings to have very good reason for believing what you are saying is true, and that should be more than just your gut instinct.

    • So how about a system in which the only representation of both sides is from a pool of appointed lawyers...like a "universal legal service" (kin to "universal medical services" of some countries)?

      Or at least both sides are limited in their expenses?

      Similarly to what small clams court does to even the playing field?

    • I will never understand why the loser doesn't pay the winner's fees.

      That would be naturally anti-balanced. Consider that the person who spent the most is likelier to win (even wrongly), and similarly that would mean a terrible expenditure on the part of the loser, who would lose both his case and the tremendous legal fees of the winner. The tenancy would then be for both sides to spend all their money on the case, and for the lose to go bankrupt.

      Ideally, the legal system should have the following traits:
      There should be a significant disadvantage for the aggressor, to discou

      • by jbolden ( 176878 )

        Very good list of traits for a legal system.

        I'd add to your list a requirement for
        due diligence: a party should be encouraged to investigate claims on their own before making them in court.
        rapid settlement: parties should be encouraged to make offers to one another in a timely matter
        punishment for stalling:
        encouragement towards truth telling: admitting flaws in your case rather than requiring the other party to prove them should always be to your advantage
        reduced cost: the system should work to adjudicate

    • by Teppy ( 105859 )
      Or use the A New Kind of Justice [blogspot.com] litigation system where the defendant would welcome being the target of a nuisance lawsuit.
      • by jbolden ( 176878 )

        You are just vastly decreasing the number of lawsuits. That might be a good reform. But essentially the burden on filing is so high and the costs so great that it would almost always (or possibly always) pay to resolve problems outside the justice system. Which means that structures that require lawsuits won't function. For example if debts aren't collectable the loan system collapses. The only way to get a loan would be a loan shark type investor who doesn't depend on the courts.

        Your numbers need to

  • My next TV (Score:5, Insightful)

    by garyisabusyguy ( 732330 ) on Saturday April 25, 2015 @01:54PM (#49551505)

    Will probably be a Vizio

    • by binarylarry ( 1338699 ) on Saturday April 25, 2015 @02:24PM (#49551603)

      I love drawing diagrams in Vizio.

      • by Anonymous Coward

        I love drawing diagrams in Vizio.

        Use Dia.

        PS: my captcha for this is "diagrams"! It's fate!

    • by Anonymous Coward

      Good, its a wise decision. I bought a 37" Vizio at walmart with my tax return in 2011. Still my primary "TV" today.

      At the time I bought it, it was all I could afford. I remember thinking the name was potently stupid, it was my first time hearing of the brand... So imagine my total surprise when it turned out to actually be a decent piece of manufacturing!
      The built in menu is super complete, all the color balance/adjustment & zoom & such you'd need. Also has a built-in TV tuner, or a scan function at

    • I bought a 60" Vizio a couple of years ago because it was a decent looking TV at a great price. Now, having learned more about the company, I'm really glad I did. The TV looks fantastic and has worked consistently - no complaints in that department, and I love how they're standing firm against these patent trolls.

      When it's eventually time to upgrade, I'll definitely look at their products again.

    • by antdude ( 79039 )

      They do more than TVs. :P

  • by Anonymous Coward

    I've had a Visio vvv37l in my bedroom for quite some time (maybe six/seven years), never had problems with it. Hell, once the wife, while in a hormonal state; decided to push the T.V. off of its stand (a dresser) and it plopped down flat onto the monitor. I think from a height of about five feet, the damn thing just keeps going.

    Now, I've had a Panasonic TC60ST60 for less than two years and it took a dump on me. My LED TV before it was a top of the line Samsung, it died just shy of 16 months.

    I know this is o

    • Re:Great company. (Score:5, Interesting)

      by pslytely psycho ( 1699190 ) on Saturday April 25, 2015 @02:20PM (#49551585) Journal
      I shall add to your anecdote.

      I had a 22" Visio mounted in my Freightliner, (large American style tractor-trailer for those unfamiliar) it survived 7 years of vibration, hard shocks (potholes, bad roads), dust, moisture and extremes in temperatures. I used it another year after I retired and then gave it to my son. He sold it after buying a new TV about a year later.

      The only two problems it ever had were:
      1: about three years after I put it in the truck, a large capacitor came unglued from the board and broke its connection. I re-soldered it in the back while my student drove. (the ultimate mobile TV repair?)

      2: at the six year mark, it developed a yellowish discoloration at the bottom center of the screen. It was only noticeable when viewed from an angle or from strait on if it was displaying a blank screen. It was difficult to see strait on with anything moving on the screen (DVD, computer game).

      I was very impressed with its performance as it lived through total hellish abuse and continued to function for years afterward. It may even still be working. I certainly wouldn't be surprised!
      • large American style tractor-trailer for those unfamiliar

        I'm not American but am still no more familiar? Where I live a tractor is a machine with big wheels at the back and small wheels at the front that you use on a farm for towing stuff in the dirt, none of which would ever have electricity or the need for a TV.

        • Sorry man, It is sometimes difficult to know how to describe something to an international audience who may or may not be familiar with the subject. I know there is a large difference between the types of large trucks in Europe and America. And not everyone is familiar with the types in other countries.
          "Articulated Lorry," that the other poster used was just something that unfortunately, never crossed my mind.

          Probably should of just linked to a photo!

           
  • I don't get it, you win an appeal on a higher court, but instead of giving you a ruling they send you back to the lower court judge, urging her to reconsider? Is this common and is there a specific reasoning on why it is done so?

    • Usually because the higher court says the reasoning originally used was possibly wrong and the lower judge, more familiar with the case, needs to address such, or a procedural error was made.

    • by raymorris ( 2726007 ) on Saturday April 25, 2015 @02:20PM (#49551587) Journal

      The appeals courts generally rule on the LAW, not on the FACTS. So when they overturn a decision they frequently remand it with an instruction (not a request) to decide it in accordance with a specific understanding of the law.

      Why send it back rather than just deciding the outcome of the case? Because the appellant ruling on the law may or may not change the outcome of a case. Imagine someone confessed to a murder, and there were also witnesses. The appellant court might rule that as a matter of law the confession is not admissible. They'd remand the case to be tried without the confession. The murderer might well still be convicted based on witness testimony and other evidence. The appeals court doesn't hear from witnesses, they just rule on points of law. The trial court would need to judge guilt or innocence, while following the appellant court's instruction to not play the confession for the jury.

    • by PPH ( 736903 )

      The higher court has a tee time.

    • by AK Marc ( 707885 )
      The appeals courts are not supposed to re-try facts of cases. They look at procedural errors, and errors in application of law. Once those errors are identified, then it should be sent down to a lower court for a re-trial. That's how it is supposed to work, and how it does work in most cases. Sometimes the points of law changes the outcome of the individual case, sometimes the don't.

      For example, in Roe v Wade, Roe "won" at the Supreme Court, but lost the case because the delays in being granted the r
  • That is all well and good but their adherence to their GPL obligations appears to be ...questionable at best.
  • This is the first I'm hearing about Vizio's combativeness with patent trolls. I'm not sure how their legal standing on getting fees back will work out but I am much more likely to buy one of their TV's now.
  • by Sebby ( 238625 ) on Saturday April 25, 2015 @02:52PM (#49551695)
    After they win that, they can go after the USPTO for creating this mess they've had to spend money to clean up.

    Sure, some will say 'that's how the system works', but I don't see why companies should have to pay to clean up a government agency's screwups.

    Also, it might make the USPTO think twice (read: actually do their job [slashdot.org]) before approving bogus "patents".

    • by jbolden ( 176878 )

      The federal government has sovereign immunity. Congress has a to waive immunity otherwise they can't be sued.

      • by Sebby ( 238625 )
        Fine. Sue the individual examiners then.
        • by jbolden ( 176878 )

          Sovereign immunity applies to employees, congress hasn't waived it there. To go after them you would have to prove bad faith, illegal action, discrimination...

          • by Sebby ( 238625 )
            • See my earlier embedded post
            • Also this [slashdot.org].
            • A "patent" previously granted that turns out to be invalid due to prior art? Bad faith/incompetence (both the examiner, and its supervisor for keeping incompetent personel on the job at tax payers' expense)
            • Monkeys... er, 'examiners' at the USPTO rubber-stamping "patents" to meet quotas [patent-trademark-law.com] (which only got 'fixed' very recently, in terms of speed of tech)? Again bad faith/incompetence/ill will
            • Monke....'examiners' not understanding and/or not questioning validity of
            • by jbolden ( 176878 )

              Mixed with the sarcasm and the editorial I'm having a tough time extracting the position you are advocating. Or more importantly what you are disagreeing with. The point above is that you can't sue patent examiners. Your position seems to be that patents should be subject to a more complex and hostile review (i.e. a much more expensive review). If that's your point I'd agree. Otherwise you are going to have to represent.

              • by Sebby ( 238625 )
                My point (which I clearly stated originally): Why the hell should companies, including tax payers (costs of running courts & all) have to pay for the USPTO's fuckups?

                If a patent is declared "invalid", then why was it a "patent" to begin with!? And why do companies have to pay, out of their own pocket, to "fix" these invalid patents?? (Please, do provide *detailded* reasons why the companies should be burdened with the costs of cleaning up the USPTO's messes).

                Either the USPTO didn't do their

                • by jbolden ( 176878 )

                  Why the hell should companies, including tax payers (costs of running courts & all) have to pay for the USPTO's fuckups?

                  There are two different issues here.

                  For the USPTO to vet patents properly would require a substantially higher cost per patent. The tax payers through their elected representative did not allow for patent fees to go high enough to cover that cost nor subsidies to cover that cost. They are the most responsible party for the policies.

                  As for companies. Companies don't have to pay for

              • by Sebby ( 238625 )
                And here is another fine example [slashdot.org] for you.
  • Whenever I hear of a story like this, I am reminded of the scene in Martin Scorsese's great movie, Raging Bull, in which Jake LaMotta, played by Robert DiNiro, speaks of an upcoming opponent to an associate:

    "I'll put yous both in the ring and give yous both a fuckin' beatin', then yous can both fuck each other!"

    Haven't we lost enough to the stupidity of our intellectual property laws? Could it be time to revisit whether or not they're actually doing what they were meant to do?

  • by istartedi ( 132515 ) on Saturday April 25, 2015 @04:18PM (#49551961) Journal

    It's kind of like winning a cockfight though. The whole contest exists only because the surrounding environment is corrupt and/or seedy.

    • by 32771 ( 906153 )

      But it is great, it doesn't cost as much for the government as more patent officers would, matches the powers of the creative against those of the parasites automatically and establishes a deterrent. This is wonderful, sometimes I applaud government decisions.

  • by Anonymous Coward

    A lot of patent complaints are started from holding companies, comprised of attorneys. There is almost my cost to the assertion company and most of the costs are in the defendant attorney fees to cover the cost of discovery.
    There are a ton of examples of an assertion company claiming infringement, but won't say how the defendant is infringing three patent.
    This is why most assertion companies price there settlement offers just under the cost of fighting the case.
    The point of the article is that a defendant s

  • Ok, now Vizio, you have my attention for being a good guy... in this regard. I'm in the market for a couple of new screens every year (home offices for two, couple of tech saavy kids, etc etc), and this sort of corporate behavior is a huge influencer in my decision of whose almost-commodity product to buy.

    If you're listening at all: I'll buy your products again this year. How about you try to be better about the GPL?

  • Strangely I was just watching a plane crash doco about Singapore Airlines Flight 0006 which attempted to take off on a closed runaway in Taiwan and crashed at speed into construction equipment killing half the passengers and crew. One of the survivors was William Wang, CEO of Vizio.

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