Supreme Court Makes It Easier To Get Lawyers Fees In Patent Cases
UnknowingFool (672806) writes "In a pair of unanimous rulings yesterday, the Supreme Court made it easier for defendants in patent cases to collect attorneys fees if the litigation was frivolous. In the first case, Octane Fitness v. Icon Health & Fitness, the court ruled that a standard used by lower courts to award attorney's fees was impossible to meet. The original standard under Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc. had ruled that a claim had to be both 'objectively baseless' and 'brought in subjective bad faith' before fees could be awarded. The high court ruled that fees should be awarded merely when the case is 'exceptional' and not when the defendant must prove there was zero merit.
In the second case, Highmark v. Allcare Health Management, the Supreme Court also noted the 'exceptional' standard in reversing the appellate court's decision but specifically ruled that appellate courts should give more deference to the lower courts on rulings of fact. In Highmark, the district court found that Allcare had engaged in a pattern of 'vexatious' and 'deceitful' conduct throughout the litigation and awarded fees. The appellate court while agreeing with the lower court about part of the case reversed the fees in their de novo review of the case. In de novo reviews, the court case is essentially retried with the higher court. The Supreme Court iterated that de novo reviews should be done typically for 'questions of law' and reviews on 'questions of fact' are done if there are clear errors with decisions on matters of discretion 'reviewable for "abuse of discretion."' In other words, the appellate courts can review a case if a lower court has not correctly interpreted law; however, they should not retry a lower case on facts unless the lower court made a clear error. Also unless the lower court abused their power in some way, the appellate court should not review their final decisions.
For example, if a person is tried for murder, an appellate court could rule that a district court misinterpreted a statute about sentencing if the person if found guilty. The appellate court should not retry the facts of the case unless the lower court had made a clear error like ruling that there was a DNA match when there was not. Also an appellate court should not reverse the lower court if they sentenced the person to a reasonable time. Now if the district court sentenced the person to 400 years for one murder, then the appellate court should intervene.
In effect the two rulings make it easier for companies to recover money should they be sued in frivolous patent lawsuits. This would make the risks greater for those who sue."
In the second case, Highmark v. Allcare Health Management, the Supreme Court also noted the 'exceptional' standard in reversing the appellate court's decision but specifically ruled that appellate courts should give more deference to the lower courts on rulings of fact. In Highmark, the district court found that Allcare had engaged in a pattern of 'vexatious' and 'deceitful' conduct throughout the litigation and awarded fees. The appellate court while agreeing with the lower court about part of the case reversed the fees in their de novo review of the case. In de novo reviews, the court case is essentially retried with the higher court. The Supreme Court iterated that de novo reviews should be done typically for 'questions of law' and reviews on 'questions of fact' are done if there are clear errors with decisions on matters of discretion 'reviewable for "abuse of discretion."' In other words, the appellate courts can review a case if a lower court has not correctly interpreted law; however, they should not retry a lower case on facts unless the lower court made a clear error. Also unless the lower court abused their power in some way, the appellate court should not review their final decisions.
For example, if a person is tried for murder, an appellate court could rule that a district court misinterpreted a statute about sentencing if the person if found guilty. The appellate court should not retry the facts of the case unless the lower court had made a clear error like ruling that there was a DNA match when there was not. Also an appellate court should not reverse the lower court if they sentenced the person to a reasonable time. Now if the district court sentenced the person to 400 years for one murder, then the appellate court should intervene.
In effect the two rulings make it easier for companies to recover money should they be sued in frivolous patent lawsuits. This would make the risks greater for those who sue."
Is there a legal definition of "exceptional?" Aren't these types of cases already so common that they wouldn't qualify as "exceptional?"
This has both positive and negative impacts on the small guy. He is in better shape to defend his patent against big companies who try to stop him from entering the market via lawsuits. He has a greater risk when defending his patent against inf ringers. If his case is solid, it shouldn't matter.
This has very little to do with the article, but it's something that's always confused my about American law. Why in god's name would you sentence someone to 400 years in prison unless you believe in Highlanders? Similarly, what is the point of consecutive life sentences? Prima facie it seems to be that if one life sentence gets overturned, there's still a couple more to make sure the person stays in prison, but that makes the whole act of overturning a life sentence in the first place a farce.
You are assuming the small guys defense VS the big guys lawsuit has anything to do with the legitimacy of the bug guys claim. This is almost never the case.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Weak troll again. If you have a valid patent with reasonable claims this changes nothing. Moron.
You sir are as others have pointed out a troll. 1st, what the hell does the GOP have to do with this ruling? I get that there are 5 conservative justices vs 4 liberal ones, but that has bitten the GOP in the ass as much as it has helped. So that can't be it. 2nd, this helps a small inventor as much as it hurts him. Like others will point out, if an inventor's claim is strong & not just adding to an old idea then the inventor will be able to file a lawsuit and get not only the infringement payment, but also the law suit fees. On the other hand, if a big IP troll comes after a mom & pop hotel b/c they use wireless routers, then they can make sure that they are able to fight the suit w/out having to worry about losing their business to paying for the lawsuit.
I'll note that recovery of attorney fees is unlikely against true patent troll companies - they'll just use the standard tricks of using a shell company with no assets on the books, just enough money to pay for their lawyers. Though I've heard of that failing on occasion - there are ways to reach deeper into the shells in cases like this, such as charging the lawyers that brought the suit, the executives of the company(SOMEBODY has to be named), etc....
But anything that raises the risk of engaging in patent trolling(and similar lawsuits) is a good thing.
As always, awards should generally be limited to 'reasonable' fees. No spending $1M then charging the other guy for it, when $100k would have been enough...
I don't read AC A human right
I am not sure I understand your point. There certainly will be many cases where this ruling does not apply. I certainly was only speaking to the cases where it does apply. If it never applies, none of this matters to begin with.
Speaking as a small inventor I say, YEAH! It is about time this went through. This will protect us from trolls by hurting the trolls.
Since when was a Supreme Court ruling "the Republicans"? Especially in a unanimous vote?
And the knife cuts both way here. Not only would this make it riskier for a small inventor to assert patent infringement, but it protects the small inventor from being targeted with frivolous infringement claims. The latter strikes me as a far more common occurrence.
And in the former case, the individual only incurs risk if they press a claim that is exceptionally weak or concerns an exceptionally weak patent. In which case, good. They should lose everything.
Oh look, it's that "The Republicans" troll again! Pay no attention to the Obama stickers on his butt.
completely corrupted our laws. We used to have simple laws for things like murder with clear-cut sentences (i.e. death, "life", 40 years, etc). Over the decades, however, the legal class (actually both the lawyers in robes who sit on the bench, and the lawyers who get elected to legislatures) have added all sorts of loopholes and modifiers. Now, when a jury sentences somebody to 40 years they are not told that the "system" will give the person time off for good behavior, credit for time already served (the time in jail before and during the trial), and in many places even simply reduce the sentence duration by a certain percentage. As a further complication, the "system" will often let a convict who killed two people and got 40 years for each serve those sentences simultaneously (a "concurrent" sentence - apparently murderers have much more valuable lives and can multi-task so that on day of their lives is worth two or more of ours). Oh, and in many place, a "life" sentence (which USED to mean you stay in jail until you die) has been re-interpreted to mean a fixed number of years, like 30 and then often has had the option of parole added - so it's possible for a jury to send a murderer to jail for life only to see tha lawyers let the guy out in 15 years (time off for being good, parole, eraly release for prison overcrowding, etc - ANYTHING that gets the crook back out on the street where his actions will likely drive up the need for more lawyers). Given all this crap, the best thing a jury who wants to see a convict actually get punished can do is to hit him with the maximum penalties 400 years MIGHT mean the guy won't go free until he has gray hair. Current sentences are nothing but a fraud perpetrated against juries (who are INTENTIONALLY not told about the loopholes and modifiers) and the law abiding portion of the population, who vote and might get upset if they were aware of the tricks.
Since when was a Supreme Court ruling "the Republicans"? Especially in a unanimous vote?
And the knife cuts both way here. Not only would this make it riskier for a small inventor to assert patent infringement, but it protects the small inventor from being targeted with frivolous infringement claims. The latter strikes me as a far more common occurrence.
And in the former case, the individual only incurs risk if they press a claim that is exceptionally weak or concerns an exceptionally weak patent. In which case, good. They should lose everything.
Not necessarily. Unless there is a limit of damages to lesser of legal fees paid, big money can still make disproportionate use of it.
Let's say you and nine other people each have a million dollar idea and a firm with $100M and shell companies to spare wants to legally steal them. They can gamble losing up to a million in fees and fines against each idea. If you, or any of the other nine guys can't put up, say, a $100k to defend your idea, you can be outspent and thus likely to lose on a procedural or other technicality.
Even if you do scrape the $100k together, you are tied up in court for a year or ten and facing a 10:1 legal arms race. Let's say that 10:1 ratio and your obvious goodness gives you a 50:50 chance. If you win, you get your $100k back in the form of a judgement against a shell company with no assets. If you lose, you are out $100k, plus their $1M in fees. 50:50 odds that you will lose 1.1M +time, or $100k+time, with no possible advantage to you.
They only need to get 1 guy in ten to fold to have a net return on their legal investment and, thanks to shell companies and subsidiaries, there is literally no risk to their investors if one folds, and huge upside if more than 1 caves.
This is what rifles and martyrs are for. The problem is the would be martyrs end up shooting the wrong people because they are dumb enough to be martyrs.
You can only lose on a procedural technicality if you are the Plaintiff, as that would result in the case being dismissed. Also, you don't appear to understand shell companies, or how they work, or what they can and can't protect you from.
I hate grammar Nazi's.
due to the socialist medical system, 30 years is life.
You can only lose on a procedural technicality if you are the Plaintiff, as that would result in the case being dismissed. Also, you don't appear to understand shell companies, or how they work, or what they can and can't protect you from.
By lose procedurally I mean that if you, as the defendant, can't afford to respond to three different suits in three different juristictions, you may lose on a summary judgement.
I understand them and the phrase "judgement proof" better than you appear to:
http://cookcounty.legalexaminer.com/automobile-accidents/taxi-cab-companies-now-playing-the-corporate-shell-game/
http://thinkprogress.org/climate/2014/01/22/3182911/freedom-industries-bankruptcy-bad-news/