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New Bill Would Require Patent Trolls To Pay Defendants' Attorneys
Zordak writes "According to Law 360, H.R. 845, the 'Saving High-Tech Innovators from Egregious Legal Disputes' (SHIELD) Act of 2013 would require non-practicing entities that lose in patent litigation to pay the full legal costs of accused infringers. The new bill (PDF) would define a 'non-practicing entity' as a plaintiff that is neither the original inventor or assignee of a patent, and that has not made its own 'substantial investment in exploiting the patent.' The bill is designed to particularly have a chilling effect on 'shotgun' litigation tactics by NPEs, in which they sue numerous defendants on a patent with only a vague case for infringement. Notably, once a party is deemed to be an NPE early in the litigation, they will be required to post a bond to cover the defendants' litigation costs before going forward."
Sudden outbreak of common sense?
That's about time.
--- Linux or FreeBSD, it's like blondes or brunettes. I like both. ---
But what if I sell/assign an invention to a patent troll right off the bat before it issues...?
would require patent trolls' attorneys to go unpaid.
Seems to me that this will just encourage greater extortion of small shops - those that can't afford to even consider taking a case to court.
S.H.I.E.L.D.
"Strategic Hazard Intervention Espionage Logistics Directorate"
"Saving High-Tech Innovators from Egregious Legal Disputes"
I think congress pulled a fast one on Marvel and beat them hands down!
AC experimenter and I give a rats ass to anyone who cares!
I freaking love acronyms
The would deprive us of watching another Darl McBride style train wreck!
Seriously, I learned a lot about the legal system from the "SCO Stupid" (sm). Other than that, I agree, common sense ... about something at last.
- - - Non Caffeine Drink or Drink Error
That sounds great. I hope it actually passes...
Bill page at Thomas
Find your house rep
Go green: turn off your refrigerator.
Why am I having a hard time believing this is real and has a hope of being passed into law?
Am I really so cynical/jaded that a good-sounding idea from government and/or lawmakers just feels like some sort of a trap? It say something about how the world's been run lately.
No sig today...
Does filing a lawsuit count as a "substantial investment in exploiting the patent"?
So only if you end up in court and are classified as troll do any of these minor annoyances\penalties apply. This is not going to change the game significantly at all for most of the players or victims. Maybe just maybe a few of the smaller trolls may back off a few very weak cases if a company says 'see you in court' but that's about it.
The bill is designed to particularly have a chilling effect on 'shotgun' litigation tactics by NPEs, in which they sue numerous defendants on a patent with only a vague case for infringement.
So to achieve that, instead of addressing shotgun litigation by any litigant, they create an inhibition to all NPEs. That would include things like the The Open Invention Network, and would exempt practicing entities like SCO. Does that sound right?
This legislation would create unequal patent protection for big corps versus independent inventors. Once a patent is sold by its original inventor, it can only subsequently be sold to big corps or it loses some of its power. This means big corps will have an advantage compared to independent inventors, who will have less ability to market their inventions.
If the problem is shotgun patent enforcement, regulate shotgun patent enforcement. If the problem is overbroad patents, narrow the allowed scope of patents. Address the real problem with equal treatment for all litigants under the law. Don't create a preferred class for big incumbent corps and inhibit independent competition.
This is nothing more than another land grab by big incumbents who use our government to inhibit free market competition.
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How about just barring the eastern district of Texas from hearing any cases on patents?...
If it's not on fire, it's a software problem
Create a federal patent court circuit with knowledgeable judges, and be specific to exclude the eastern district of Texas for systematic bias.
Correct. But this makes it worse for them inthat they will be increasingly targeted by NPEs who don't want to take the risk of going to court with one of the big players.
Unlikely. The reason they don't usually go after the small companies is because they are small, i.e. they have no money. There is little point in spending much money trying to extort a tiny settlement out of a company that the NPE may very well bankrupt in the process. If I'm a small company I would basically say "bring it on". They'll spend more money on lawyers than they would win in a settlement and even if they did win they probably would get nothing because the company would declare bankruptcy.
Hurray! Patent reform finally arrives for those who make "substantial investment in exploiting the patent". Apple, Google, IBM, Oracle be saved! Now get back to work!
While patent lawsuits are particularly important, why is it that we have to make a new law for this at all? Shouldn't we have this for all lawsuits across the board? It can still be allowed for judges to decide in specific cases if the situation does not warrant this requirement. But overall it should normally be the way it is done.
now we need to go OSS in diesel cars
addressed here. The other half is where people get patents on stupidly obvious things and sit on them ("submarine patents", like online shopping cart) and then, without ever having attempted to implement the patent, pounce when someone else does something loosely similar.
So it only covers half the problem, only affecting those that buy said patents as fire for their litigation, but this is a good start anyway. This will at least deal with the larger patent trolls that make their entire business model out of buying patents that should have never been issued, and them using them to game the patent system and extort money. They really never had a hint of innovation, even if the original inventor may have.
I work for the Department of Redundancy Department.
So, why doesn't this apply to all civil lawsuits? This is how it works in many countries thus their courts aren't tied up as bad as ours (i.e. American).
http://en.wikipedia.org/wiki/Loser_pays
Why am I having a hard time believing this is real and has a hope of being passed into law?
And even if it does become law, the wording is ambiguous:
...and that has not made its own 'substantial investment in exploiting the patent.'
What *exactly* does this mean? I'm sure that Patent Trolls can work the language to their advantage, especially in
South Texas, or where ever the local Media are cleaning up on Patent Troll cases...
If you want news from today, you have to come back tomorrow.
Small shops are not out there filing lawsuits against numerous alleged patent infringing companies. Generally they are the targets of that approach. The bill would allow the targets of patent trolls the ability to recoup losses that they currently have no ability to recoup. Currently the defendants either pay the troll, or pay for lawyers to fight. There is no recovery currently for any part of the trial. The current methods of patent trolls are extortionist.
You phrase the problem like the patent trolls are the victims. That is absolutely not the case.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
If this allows reimbursement of attorney's fees for patent troll attacks, will it induce charities like the EFF to bankroll a defense attorney if it can recover its legal fees from the plaintiff?
Why am I having a hard time believing this is real and has a hope of being passed into law?
Because you haven't realized that if this was passed then large companies who've stolen an idea from a non-corporation inventor before he/she has obtained funding to manufacturer his/her idea will use the threat of large-company-size legal bills to browbeat the independent inventor into forgoing a suit and settling for peanuts instead of what they would have paid if they had to license the invention from another large corporation.
*I* would have a hard time believing this *won't* be passed into law.
I love that they have singled out patent trolls as opposed to making it hard for some basement inventor to defend himself. Bravo!
Granted, I was talking about DMCA takedown notices, but it is the same concept: relevant blog post
excitingthingstodo.blogspot.com
Wow, did you read anything at all or did you see "patent" and just start posting? If you read anything and are posting, you must be a shill. If you didn't read, shame on you. "loser" in this case is limited to a defendant where it's deemed that the company initiating the suit is a troll. The wording in the article states very clearly that if you are deemed a NPE (more on that in a moment) then you must pay a bond to cover the defendant's cost in order to pursue the case.
NPE: You are a widget maker, and competing with 10 other widget makers in the market place. Trollguy buys a patent for a screw that you use in your widget and he sues every one of you dirty widget makers for infringing on his patent for a widget-screw. He does not make widgets, did not invent a widget, and in fact his current business is buying patents and suing people. He would be by definition a NPE. As a NPE, he needs to bond the defendant's legal fees, for every one of those cases of alleged infringement, in order to pursue the cases.
That is a good thing!
In addition: If the infringement claim is dies in court you, Mister Widget, immediately recoup your legal fees by cashing in the bond.
Now if Joe's Widgets sues you for stealing their rounded corner widget design, they are not a NPE. They do not have to bond your legal fees. So the law does not harm normal competition and does not punish inventors. It's at least "some" protection from the current joke that has become patent trolling.
Since I have not fully read the Bill I can not claim that the wording is secure and clear enough to really do anything. Politicians are generally shitheads, and even the best written and intended Bills can get screwed up by their idiocy. That fact is rarely the Bill's fault, but rather the people's fault for voting in shitheads over and over and over again.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
This is a Bandaid solution. It doesn't address the real problem - too many bad patents are being issued.
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If you read the text of the bill, it says that the "original assignee," if they filed the application can still sue. Trolls often buy patents from defunct companies. All they need to do is buy the company instead, keep it as a separate subsidiary and sue away. This isn't going to stop anything.
Second, this adversely affects legitimate patent defense. Let's say you are sued by a practicing entity on some b.s. overbroad software patents. Well, a common strategy is to license patents from another company and sue back. (i.e. best defense is a good offense). Well under this law if you get sued, you better have your own patents, or you are out of luck.
To actually believe this will help? All patent trolls have to do is spoin off shell corporations that funnel the winnings back to the troll and declare bankruptcy if they lose. In fact trolls already do this because judges have the power to access cost in frivolous actions.
Having the plaintiffs in a false claim pay 1.5x to 2x the defendants costs would be better. Perhaps the assessing of higher costs could be left up to the court, if the lawsuit was determined to be egregious.
Unfortunately I make it the Saving HIgh-Tech INnovators From EgregIous Legal Disputes, or SHIT IN FEILD Bill. Spelling error apart, this is indeed likely to be as successful as trying to persuade bears not to poo in the woods.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
So what if this gets challenged by the trolls under the grounds that it may be unconstitutional. They may argue that if a patent is a property right like a house then as the new owner they should be able to enjoy the same priveleges as the previous owner. Or the may argue that the law discriminates against them as the new owners of the said property. Not sure how those arguments would hold up though.
Loser Pays applies to virtually the entire rest of the galaxy, and, while not perfect, it is way better than the Loonie Tunes US approach. Here in the UK, it applies to both criminal and civil law in 100% of cases, unless the judge decides the loser was partly to blame - eg deliberately made himself look guilty to attract a law suit.
Yes. U.S. is virtually the only industrialized nation to not have a loser pays system. Thanks to the Trial Lawyers lobby and a legislature stuffed with lawyers we now routinely submit innocent companies and people to frivolous lawsuits.
Hmm...this could solve a huge problem in the food industry. The documentary, Food Inc. explains how companies like Monsanto intentionally plant their patented, genetically modified soybeans into the fields of farmers who don't want to grow their product. Although the farmers have done nothing wrong, Monsanto keeps the patent litigation going until the farmer in question can no longer pay his legal fees and is forced to shut down. According to the film, this is a main reason why in the US there are so many super-powerful GMO companies and so few independent farmers.
can we get a law to stop their crazy ass get even richer even quicker schemes.
Make them post a bond to cover any and all defendants legal costs. That would prevent the case from ever getting to court and truly prevent these patent trolls from ever filing suit. As described the bill wouldn't prevent the filing, then when they lose file for bankruptcy. Just too easy to get out of it in bankruptcy.
The United States government tramples property rights yet again. Slashdotters love it.
If this is the bill, then it was introduced in August 2012 and since then died... http://www.govtrack.us/congress/bills/112/hr6245
Pass this into law immediately. Thank TSM for that.
All those moments will be lost in time, like tears in rain... time... to... die...
Why not go further, and only allow patent litigation between practicing entities?
One great example is when consumers sue large corporations. Posters like this will drag up bullshit like "coffee is supposed to be hot" and "he just wants money [without working for it]" not bothering to learn just how much hotter that spilled cup of coffee was than it should have been, how the corporation was saving money heating it beyond the industry standard, how much damage the spill did to the individual, how the cup was handed off etc. or how reasonable many such claims are, most asking for no more than reimbursement of medical and legal expenses.
A bill to amend chapter 29 of title 35, United States Code, to provide for the recovery of patent litigation costs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013".
SEC. 2. RECOVERY OF LITIGATION COSTS.
(a) AMENDMENT.-Chapter 29 of title 35, United States Code, is amended by inserting after section 285 the following new section:
285A. Recovery of litigation costs
(a) IN GENERAL.-In an action involving the validity or infringement of a patent-
(1) a party asserting invalidity or noninfringement may move for judgment that the adverse party does not meet at least one of the conditions described in subsection (d);
(2) not later than 90 days after a party has moved for the judgment described in paragraph (1), the adverse party shall be provided an opportunity to prove such party meets at least one of the conditions described in subsection (d);
(3) as soon as practicable after the adverse party has been provided an opportunity to respond under paragraph (2), but not later than 120 days after a party has moved for the judgment described in paragraph (1), the court shall make a determination whether the adverse party meets at least one of the conditions described in subsection (d); and
(4) notwithstanding section 285, the Court shall award the recovery of full costs to any prevailing party asserting invalidity or noninfringement, including reasonable attorney's fees, other than the United States, upon the entry of a final judgment if the court determines that the adverse party did not meet at least one of the conditions described in subsection (d), unless the court finds that exceptional circumstances make an award unjust.
(b) BOND REQUIRED.-Any party that fails to meet a condition under subsection (a)(3) shall be required to post a bond in an amount determined by the court to cover the recovery of full costs described in subsection (a)(4).
(c) TIMING AND EFFECT OF PENDING MOTION.-
With respect to any motion made pursuant to subsection (a)(1) the following applies:
(1) In the case of a motion that is filed before the moving party's initial disclosure are due-
(A) the court shall limit any discovery to discovery that is necessary for the disposition of the motion; and
(B) the court may delay issuing any scheduling order until after ruling on the motion.
(2) In the case of a motion that is filed after the moving party's initial disclosures are due the court may delay ruling on the motion until after the entry of final judgment.
(3) In the case of a motion that is filed after the entry of final judgment, any such motion must be combined with a motion for fees to the prevailing party.
(d) CONDITION DEFINED.-For purposes of this section, a 'condition' means, with respect to the party alleging infringement, any of the following:
(1) ORIGINAL INVENTOR.-Such party is the inventor, a joint inventor, or in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, the original assignee of the patent.
(2) EXPLOITATION OF THE PATENT.-Such party can provide documentation to the court of substantial investment made by such party in the exploitation of the patent through production or sale of an item covered by the patent.
(3) UNIVERSITY OR TECHNOLOGY TRANSFER ORGANIZATION.-Such party is-
(A) an institution of higher education (as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or
(B) a technology transfer organization whose primary purpose is to facilitate the commercialization of technology developed by one or more institutions of higher education.".
(b) TECHNICAL AND CONFORMING AMENDMENT.-
The table of sections for chapter 29 of title 35, United States Code, is amended
would be can't sue at all unless there is a substantial investment of time, money, and R+D in a valid attempt to use the patent to bring a physical product to marke. Note the word physical here. This would be meant in the sense of preventing holders of patents on ideas/business methods/software would be completely prevented from sueing anyone.
And before a patent suit can go forward, there should be a complete review of the patent. If there is prior art, or if the patent is vague in any way, it is invalidated instead of allowing the suit to go forward. The patent holder pays for the review.
Lets just get rid of the whole patent system - Most lawyers would starve :-)