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Vizio, Destroyer of Patent Trolls
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."
I will never understand why the loser doesn't pay the winner's fees.
I come here for the love
Will probably be a Vizio
Wherever You Go, There You Are
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 only one guys experience, and generally I don't like to get behind companies, but hey I feel I've gotten my monies worth and then some.
I can't say I have much faith in anything other than Vizio, I'm glad to see they're doing well with patient trolls.
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?
Violence is the last refuge of the incompetent. Polar Scope Align for iOS
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).
Would they have more success using their legal budget to hire lobbyists to change patent laws to severely restrict or do away with patent trolls altogether, though?
Maybe they also do this, too.
That is all well and good but their adherence to their GPL obligations appears to be ...questionable at best.
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.
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.
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.
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) before approving bogus "patents".
AC comments get piped to
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:
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?
You are welcome on my lawn.
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?
4wdloop
It's kind of like winning a cockfight though. The whole contest exists only because the surrounding environment is corrupt and/or seedy.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
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.
Or, it happens often enough, that the car company in question tanks because, who the fuck wants to buy a car where the manufacturer would rather sue everyone into oblivion than fix a safety defect?
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 should have the right to collect from the plaintive in these types of cases where it was a blatant shakedown attempt.
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).
If you manage to have a trial that last for months or even years at the expense of a million bucks only to discover after all that time and expense that your case is being heard in the wrong court then you, your lawyer and the judge are a bunch of morons. The principle of loser pays has been used around the world for centuries without the problem you just cited being a deal breaker.
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-kickback negotiations (which are not discoverable, due to attorney-client privilege). This is a common failing when relying on factoids that are determined by the recordkeeping and other actions of ... your opponent (dare I say, enemy?).
Example: a shell corporation sues, the lawyer for the shell corporation 'hires'
out lots of expensive work to the parent corporation for technical support.
When the lsoer pays for this work, the parent corporation profits twice... and
the second payment is tax-free (it's a recovery of 'costs').
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?
I think not...(*poof*)
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 judged even though our society can't afford justice to be cheap.
Better IMHO would be tiers with very different procedures (and thus costs) at each tier:
small claims: up to $20k
reduced claims $10-200k
standard: $100k - 5m
enhanced expectations: $2.5m+
As for admitting it is a problem... part of the problem with the USA in terms of good faith is not admitting something is almost always to your advantage. That's something the courts would want to discourage. Admitting a wrong should reduce the claim while failure to admit it should increase it. That encourages people towards settlement.
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.
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: the Court of Public Opinion. A true PR Hell to get out of.
Take GM for example. They wanted to both fix their problems quickly (to salve off more class actions and look like they care) and settle it quickly (to minimize the financial and PR damages and look like they care) in order to continue doing what they normally do. However, that all blew up in their face when a paper trail emerged that they knew for quite some time of the problems. Now, a bit off topic, they are using the fact they are under bankruptcy protection as a defense. However, even if they get away with the financial payments, they still have to deal with the PR damage and that maybe difficult to do.
Unless what I've always suspected is true: The entire US has a bad case of ADHD and forgets it all when some other news shiney comes out.
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 unlikely to join the class. I just received a check from a class action against Toyota. The check is for $29. Someone severely injured by the flaw wouldn't have joined the class, they sue individually (and maybe settle after filing suit) to get a more appropriate remedy for their specific situation.