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Supreme Court Clears Patent Invalidity Suits
The Empiricist writes "The United States Supreme Court has cleared the way for entities to sue over the validity of a patent — even while paying user fees to the patent holder. The eight-to-one Medimmune v. Genetech decision, written by Justice Scalia, held that by paying royalties to a patent holder, one does not necessarily waive the right to challenge the validity of the patent."
that it is obvious that the Supreme Court would reach this decision. Any other decision would defy all logic.
And of course, in the end, the lawyers win.
I like happy endings.
For average Joes like you and me, if I tell you that you owe me money, and you fear damage to your credit report if you don't pay me but you don't actually think that you do owe me, you can write "paid under protest" underneath where I would endorse the check, and then sue me to get your money back. The court won't hold it against you that you paid the bill if you make it clear to the court that you never considered yourself to be liable for the debt.*
The fact that we're talking about multi-bazillion dollar corporations doesn't mean this concept shouldn't still apply.
(* As a side note, the new electronic bank records for checks makes this a lot more viable as proof, because the fact that the bank has on record that they cashed the check with "paid under protest" already written on it means that the defendant can't claim you wrote it after the fact. Also, banks have to send you an official copy of their record of the check upon request - the copy you get with your bank statement may get accepted in small claims court, but it's not what the law considers "official".)
yet we hardly see anyone but patent trolls and megacorps doing anything with patents, so anything which weakens them is for the best.
That's because patents only make the news when you get sued. I take it that you are not an inventor. Much of the value of a startup technology company is contained in its patent portfolio, and that portfolio is what makes it attractive for purchase by larger companies.
If you're just a lone inventor and you have that good an idea, you're probably better off making a prototype and marketing the idea directly, anyhow, rather than getting patents.
There's no reason why you can't do both. In fact, if you don't do both, you're an idiot who is taking unnecessary risks on behalf of your investors.
Toronto-area transit rider? Rate your ride.
But you raise another interesting point: the ability of a licensee to essentially attack the patent-holder via law suit to try to get the little guy to buckle. Such a lawsuit is clearly unjust and there's got to be a law somewhere that covers such an aggressive move against a patent-holder. Extortion? Racketeering? The little guy ought to be able to immediately contest the lawsuit itself as being predatory, meant to bankrupt him, force him to sell his patent, or re-negotiate the license. If the lawsuit is found to be without merit and predatory, the company bringing the suit should be liable in a HUGE way at that point, ordered to pay HUGE compensation, and the executives who initiated the suit brought up on criminal charges. Otherwise, companies will be able to get away with anything they want as long as they have a bigger legal war chest than their competitors.
that portfolio is what makes it attractive for purchase by larger companies.
Back in the day the goal of a small company was to grow until it was one of the larger companies, not lose itself to the highest bidder.
KFG
For those who are talking about auto-revoke clauses in lawsuits (of which I've seen a number post), read the article:
During arguments in October, Chief Justice John G. Roberts Jr. suggested there may be some way to structure a licensing agreement to diminish the threat of a lawsuit. Best predicts companies will likely try including contractual provisions prohibiting filing suit, potentially charging lower fees for those who agree to waive that legal right. But it's unclear whether such measures are legal. Courts generally hold that the right to sue should be retained - a sentiment that came out in this case.
Simply because a clause is within a contract/agreement, doesn't make it legally valid. As the courts have established through decisions, the right to sue should be retained and it's likely that clauses stipulating the prohibition of filing suit would be deemed legally unenforceable. A contract/agreement could be structured to make it undesirable to file suit or more desirable to persuade a licensee not to, but clauses that seek to waiver that right most likely will fail.
This decision has a more profound effect then simply the right to sue. It also raises the bar in the establishment of knowingly violating a patent. If a person/company sues to invalidate a patent, then only if the lawsuit is unsuccessful and the person/company continues to violate the patent can it be established they "knowingly" violated the patent. So this will also have an effect of making it more difficult to seek treble damages. Any person/company with the foresight and resources would file an invalidation lawsuit for that very reason, I suspect.
I agree with the Supreme Courts interpretation that just because you license, doesn't mean "Actual Controversy" requirements for filing an invalidation suit are voided. Previous court decisions established that you had to violate a patent first in order to file suit to fulfill "Actual Controversy" requirements. The Catch-22 of this is that by the very act of violating the patent, you are doing so "knowingly" in order to pursue an invalidation suit. Which means that should the suit fail, you'll automatically be nailed for treble damages since you've already established you knowingly violated the patent in order to pursue the invalidation suit in the first place.
The previous logic was flawed. It was like saying that if someone portends you owe them money, you would have to acknowledge you do owe them money before you could file a suit to establish you don't. The refusal to acknowledge a patent as valid should be grounds enough to fulfill the actual controversy requirements.