Bill Would Force Patent Trolls To Pay Defendants' Legal Bills

First time accepted submitter TrueSatan writes "With support from the EFF's Defend Freedom Project two Republican congressmen seek to introduce a bill called the 'Shield Act' which, if passed, would enable judges to award costs to defendants if they are found to be the victims of frivolous patent litigation. From the article: 'A new bill introduced in the House of Representatives attempts to deter frivolous patent litigation by forcing unsuccessful patent plaintiffs to cover defendants' legal costs. Introduced by Rep. Peter DeFazio (D-OR) and co-sponsored by Rep. Jason Chaffetz (R-UT), the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act is limited to patents related to computer hardware and software.'"

Comments

Rep. != Republican

[SJHillman]

" two Republican congressmen seek to introduce a bill"
"Introduced by Rep. Peter DeFazio (D-OR) and co-sponsored by Rep. Jason Chaffetz (R-UT),"

So the parties are officially merged now?

Re:Rep. != Republican

[Anonymous Coward]

representative

Re:Rep. != Republican

[Therad]

Don't worry citizen, the Ministry of Truth will soon fix this incorrect article..

Re:Rep. != Republican

[Anonymous Coward]

Don't worry citizen, the Ministry of Truth will soon fix this correct article..

Re:Rep. != Republican

[228e2]

Don't worry citizen, the Ministry of Love will soon fix this incorrect citizen..

Re:Rep. != Republican

[Greyfox]

No one particularly likes the Reptiles, but they keep voting for them. If you don't, the wrong lizard might get in...

Re:Rep. != Republican

[pdabbadabba]

A representative is a type of congressman; a congressman can be either a representative (i.e., a congressman sitting in the House of Representatives) or a senator (a congressman who sits in the Senate).

Re:Rep. != Republican

[dgatwood]

Introduced by a Democrat and co-sponsored by a Republican is a good thing. It might have a better chance of getting through committees and the Senate, even though this looks a lot like election year posturing.

Actually, it's a bad thing. Whenever those two parties agree, only one thing is certain: the American public are going to get screwed. This is one of the worst possible patent reform laws that could realistically be passed. Anyone who truly understands intellectual property would know that the way to prevent patent trolls is through fixing the loopholes that they take advantage of. This means:

• Pass laws that strengthen the doctrine of laches so that those who should reasonably have known that patent infringement was taking place have about a one year window to bring a lawsuit, or else they can never sue that particular plaintiff again. Patent trolls almost invariably wait to sue until the alleged patent violator can no longer realistically remove the functionality or engineer around it, and until the alleged patent violator's sales volume is high enough to make it a very expensive case if they lose. Remove that incentive, and you cut trolls off at the knees.
• Pass laws that absolutely require a functioning implementation created by the plaintiff, not just a description of that implementation, before the plaintiff actually gains the right to sue. At the core of patent trolling is suing over ideas with no concrete implementations. Remove that ability, and you deal the trolls a death blow.
• Pass laws that redefine obviousness more broadly so that if anyone unaffiliated with the patent holder published a paper suggesting a similar solution prior to the earlier of A. the patent approval date or B. the date at which the patent holder first released a product exemplifying the patent, the patent can be invalidated by a simple administrative process. Redefine obviousness to mean "obvious to an expert in the field, given the problem it attempts to solve", not "obvious to a person with average skills, without being told the problem it attempts to solve". This would, of course, eliminate 99% of software patents, but given that 99% of software patents are patently crap, that would undoubtedly be a good improvement.
• Pass laws that allow anyone to challenge a patent through an administrative process at any time, by paying a fee not to exceed $100, and by providing evidence of prior art that should have invalidated the patent, had it been considered when the patent was originally evaluated.
• Pass laws that mandate a longer public comment period after a patent is published, extending up to the date at which the patent is actually approved, in which the general public is allowed to discuss the patent and submit additional prior art at a convenient website.
• Pass laws that reduce the duration of patents depending on the rate of progress in the industry. The software industry goes through complete design cycles every four or five years. If patents lasted only four or five years, it would greatly reduce the ability of a patent to cripple the industry.
• Pass laws that limit the ability to sell patents such that a company who buys a patent can only sue over that patent if they continued to manufacture a product or provide a service that exemplified that patent for at least a year or two after the purchase of the patent (or if they are actively manufacturing or providing such a product or service at the time of the lawsuit, during that initial period of time). This greatly reduces the viability of holding companies that exist solely to monetize patents.
• Make patents expire automatically if the patent holder ceases to manufacture products or make services available that exemplify the patent for a period of a year or more. This basically eliminates the viability of holding companies that exist solely to monetize patents.
• Ideally, pass laws that r

Please FIX the system dont PATCH it

[Anonymous Coward]

Please FIX the system don't PATCH it!

The patent system is so badly broken that it kills innovation for generations..
Patent trolls are just an sideffect, and they won't stop just of risk of paying some money in 1 case out of 10...

Re:Please FIX the system dont PATCH it

[Irishman]

I definitely agree with this comment but I think that the bill being proposed is something that should be expanded far beyond patents. Allowing judges to force the plaintiffs to pay for an unsuccessful suit against the defendants in all cases would help limit spurious legal cases. If groups like RIAA had to pay when they lost the case against someone, it would go a long way to reduce these legal manoeuvres against people who cannot afford it.

Heh, the bill isn't bad

[gcnaddict]

6 ‘‘ 285A. Recovery of litigation costs for computer
7 hardware and software patent
8 ‘‘(a) IN GENERAL.—Notwithstanding section 285, in
9 an action disputing the validity or alleging the infringe-
10 ment of a computer hardware or software patent, upon
11 making a determination that the party alleging the in-
12 fringement of the patent did not have a reasonable likeli-
13 hood of succeeding, the court may award the recovery of
14 full costs to the prevailing party, including reasonable at-
15 torney’s fees, other than the United States.

The language allows the judge presiding over the case to effectively determine whether the case was a frivolous case, meaning there's a decent chance that this won't deter legitimate patent suits. That said, only time will tell.

Re:Heh, the bill isn't bad

[Anonymous Coward]

The reason it's unnecessary is that the law already allows the judge to order the plaintiff to pay the defendant's costs and attorney fees if he determines that the lawsuit was frivolous. This law, like many others, is a purely political move with no purpose but to create redundant legislation. The problem is that redundancy in the law can actually create ambiguity in its meaning. Neither patent trolls nor their victims will actually be affected by this one, except that the lawyers on both sides will get to play with the law's meaning more and, of course, bill for it.

SHIELD?

[KazW]

I think we can make a good guess about which movies these congressmen may have watched recently...

Garunteed Backfire

[dywolf]

Now instead of no-name or proxy companies holding giants hostage, the giants themselves will become the hostage takers, violating patents left and right, and daring any little guy patent holders to try, just try, to take em to court. Then when the giant outspends I mean wins the court case, the lil guy is now really fookered cause he had to the giant's lawyer bill for its high profile team of super expensive attorneys.....

Result: no lil guy will ever take on a giant that violates his patents, and when he contacts the company for any kind of settlement or sale offer, they'll just brush him off.

Ya this is a great idea.

Re:Garunteed Backfire

[dokc]

Now instead of no-name or proxy companies holding giants hostage, the giants themselves will become the hostage takers, violating patents left and right, and daring any little guy patent holders to try, just try, to take em to court. Then when the giant outspends I mean wins the court case, the lil guy is now really fookered cause he had to the giant's lawyer bill for its high profile team of super expensive attorneys.....

Result: no lil guy will ever take on a giant that violates his patents, and when he contacts the company for any kind of settlement or sale offer, they'll just brush him off.

Ya this is a great idea.

I don't see any difference to current situation.

Re:Does this include Microsoft?

[Anonymous Coward]

Microsoft has mostly used their patents defensively so I don't think they've included in this

True but their proxy companies would probably go down faster with this bill.

, nor Apple.

What the fuck are you smoking? Did you miss the whole Samsung shitfest?

Google, on the other hand, will be on hot waters especially with the recent purchase of Motorola Mobility.

Er, this isn't a retroactive bill ... not to mention legal costs (while big numbers to us) don't mean a whole lot to a company like Google. $40 million in lawyer fees? Drop in the bucket.

Hmmm

[Coisiche]

Much as I'd like to believe that this is the result of politicians actually having a good idea, I suspect it's nothing but a negotiation ploy because they want bigger payments from corporations who draw a large revenue stream from the questionable use of patents.

Wrong Problem - More Unnecessary Legislation

[Compulawyer]

Section 285 of the Patent Act of 1952 (35 U.S.C. 285) already permits judges to declare patent cases to be "exceptional" and award appropriate relief. From the defendant's perspective, a case can be declared exceptional if the plaintiff cannot show that at least one claim of the patent in suit covers the device or process accused of infringing the patent. This section is regularly used by defendants to obtain attorneys fees and costs.

Rule 11 of the Federal Rules of Civil Procedure and Section 1927 of Title 28 of the U.S. Code also provides bases for the same relief.

The problem with patent trolls is not the inability of defendants to get costs. It is that trolls often wage licensing campaigns by bringing highly questionable claims but set the costs of licenses below the cost to defend an action in court. Companies typically choose to go the economical route and take a license.

Re:Does this include Microsoft?

[SJHillman]

Google, on the other hand, will be on hot waters especially with the recent purchase of Motorola Mobility.

Er, this isn't a retroactive bill ... not to mention legal costs (while big numbers to us) don't mean a whole lot to a company like Google. $40 million in lawyer fees? Drop in the bucket.

Google posted around $2.7 billion in profits for Q4 of 2011, so let's figure they make around $10 billion in profits per year.
$40 million out of $10 billion in profit is like Joe Average taking home $50,000/yr and spending $200 on lawyer fees. (An imperfect analogy, but it shows how little Google's profit margin is hurt by lawyer fees.)

Oh noes!

[AbRASiON]

Apple might have to go back to innovating instead of what they've been doing the last 18 months. (Retina display being the last really clever thing I'd credit to Apple)
Galaxy S3 folks, Apple are shitting themselves and rightfully so, S2 was good, S3 is great, genuinely good hardware - some great software too.

Disclaimer: I've owned an iphone 3/3gs/4 and Galaxy S2 and S3.

Re:Does this include Microsoft?

[evilRhino]

It's fallacious to argue that money has similar opportunity costs in scale. $40 million could bribe a congressman to the tune of billions, whereas there is almost no legal opportunity to increase $200 to that degree.

Might not help

[jeti]

Keep in mind that IP Ventures is said to use between 1600 and 1800 proxy companies for suing. Those companies are formally independent of IP Ventures, but the filings indicate that IP Ventures has a financial interest in the outcome (they get their share). If the legislation is not carefully crafted, the proxy companies can just go bankrupt and sell the patent(s) back to IP Ventures.

Source: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack/

Re:Does this include Microsoft?

[bjwest]

You people think this is funny? This is EXACTLY how our political system works. It's perfectly legal for corporations to bribe our lawmakers to make decisions favorable to them, it's just called lobbying. Let Joe Shmoe try giving $200.00 to influence his representatives decision and see where he ends up.

not enough

[__aaltlg1547]

If the claims are truly frivolous the plaintiff should have to pay whatever they asked for in damages to compensate their intended victim for damage to their reputation. And it shouldn't just apply to trolls. The same should go for big sue-happy companies.

Re:Does this include Microsoft?

[camperdave]

If it is cleverly spent, it could work.

However, let's not forget the scale. If $40 million buys billions (let's say 2 billion), then $200 buys $10,000. That could be a simple matter of taking the mayor for a good meal and discussing a zoning issue, or a vending permit.

I have a better idea

[RogueWarrior65]

"Bill would force patent trolls *and their attorneys* to pay defendants' legal bills"