Shift court fees away from innocent parties

Problem

Both the winner and loser in a patent suit almost always pay their owns fees and costs, which can total well into the millions of dollars if the case actually goes to trial. Because the potential costs are so high and there is no way to recover those costs, defendants will often settle to avoid hefty legal bills – even if they have a strong legal case that they never infringed on the patent or the patent was invalid to begin with.

Solution

Patent law should allow for the winning party, in cases where it was easy to see that the patent was invalid or there was no infringement, to obtain its fees and costs. If the trolls know they could be on the hook for that money, they will be less likely to file frivolous lawsuits.

Elijah Lynn
Flemington
NJ
United States
Posted Jun 19, 2012 2:42 pm
  • Software developer / engineer
  • Internet user
I think it should be much more than just legal fees. It should be 10x that to compensate for lost lives. It is very distracting and can affect a companies entire strategy for years to have a lawsuit against you. There should be some sort of multiplier on time spent in court.
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566 thumbs up.
steve f
Renton WA
WA
United States
Posted Jun 19, 2012 5:18 pm
  • Software developer / engineer
  • Internet user
The troll should be responsible for all court fees, lawyer costs for the defendant, and any revenue lost if the sales of a product are reduced because of an obviously false infringement claim.
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552 thumbs up.
Brian S
United States
Posted Jun 20, 2012 10:46 am
  • Software developer / engineer
  • Internet user
Change "trolls" to "plaintiffs". Troll is a loaded term and nobody is going to take you seriously if you use it. It's certainly an accurate description, given how patents are actually (ab)used and the companies out there whose sole purpose is to sue or settle for patent "damages", but EFF has always been much more professional and respectable than labeling.
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552 thumbs up.
John Galt
Sacramento
CA
United States
Posted Jun 19, 2012 6:15 pm
  • Software developer / engineer
  • Internet user
The US is the last so-called civilized nation on earth that doesn't have a loser-pays rule for all plaintiffs in all civil cases. That is only the beginning of the reforms needed.

Marc Randazza brags about how when he files a plaintiff's case (usually against anyone running BitTorrent), he's already gotten the police to tear apart the defendant's house and steal all his computers and backups. Clearly, there needs to be better due process -- not only a warrant beforehand, but a requirement that the police agency and/or the complainant pay restitution for all damage unless they convict *ALL* the affected persons of crimes serious enough to warrant the damage inflicted (and copyright infringement does NOT qualify unless the plaintiff can prove at least six-figure actual damages from that particular defendant).

In fact, this is just a subset of two much larger problems. First, the police have forgotten whom they work for, to the extent that they're willing to use all manner of force (everything from pepper spray and Tasers to no-knock midnight SWAT raids on people's homes) for trivial or even no reason, just because they feel like it. Second, the federal government is encouraging these practices by financing every podunk town police department to have its own SWAT team, plus riot gear, heavy weapons, and tanks. This is nothing less than a declaration of war against the American people, and it's one we'd better put a good hard stop to on election day before they stop letting us have elections.

I apologize for going beyond the topic of IP, but it needed to be said.
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536 thumbs up.
Nathan Hourt
Rensselaer Polytechnic Institute
SEARCY
AR
United States
Posted Jun 19, 2012 11:30 pm
  • Academic
  • Software developer / engineer
  • Internet user
Patent trolls ought not get away with breaking up a target's workflow, intimidating them, wasting their time, and potentially damaging their public image for nothing but some paltry legal fees that didn't stop them from suing in the first place. When the plaintiff's claims in a patent suit are found to be invalid, the plaintiff should be required to pay to the defendant at least triple the damages they were seeking. This would serve to offset the harm done to the defendant, as well as even further reducing the risk of patent trolling. Another benefit is that it would encourage plaintiffs to think twice about whether the damages they seek in a patent suit are reasonable.
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529 thumbs up.
Lucas Meyer
United States
Posted Jun 20, 2012 10:16 am
  • Software developer / engineer
As anyone who's been following the every-expanding morass of software patent litigation would know, a huge issue is that a lot of the patents in question are either completely unclear, or overly broad. It would be great to find a way to penalize patent trolls, anti-SLAPP style; I'm just not sure that it's that simple. For instance, take the multiple lawsuits that Apple and Samsung keep throwing at one another over smartphones...both sides have patents that they claim cover their products, and both claim that the other company's product is infringing. Not only does it take a huge amount of court time to decide which company's correct, but it doesn't seem like the courts can even come to a consensus over what patents apply to what products. For the patent system to work at all, it should be possible to tell (easily) whether a patent applies to a product or not. With software patents, this is simply not the case. And while forcing trolls to pay the defense's legal costs would be great, we'd also need better-defined rules as to which patents should be thrown out.
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526 thumbs up.
Steve Baker
Austin TX
TX
United States
Posted Jun 20, 2012 10:04 am
  • Patent owner
  • Software developer / engineer
  • Internet user
When a large company with an army of lawyers wishes to intimidate a small, but growing competitor, they can simply pull out a pile of somewhat-relevent believable-sounding patents and the mere threat of that causes a small company to roll over and give up - even though they know for 100% certainty that they are in the right. An individual or small group cannot possibly muster the legal resources to fight an Apple or a Microsoft or a Google. Even if you know that you're in the right - and (as proposed) that the other guy will pay your costs if you lose, the risk of losing due to sheer weight of lawyers is so high and the consequences so devastating - that even the promise of having your court costs covered is not enough for most people to fight it.

Patent law (by it's very nature) is not a black-and-white matter, there is tons of shades of opinion and risks that the judges or jurors won't be able to understand the (by definition) novel and complex issues involved. So there is gigantic risk in fighting - even if you know for sure that you didn't infringe a patent.

Worse still - if you're an individual writing some new piece of software, there is simply no possible way to search though every patent in existence to see if you're likely to infringe upon it. That's an impossible task for even the largest organization. Software patent infringement is 100% inevitable - even if you're the most careful, honest, law-abiding person on the planet. If you slip up - you should always have the right to say "Sorry - I won't use that code anymore" - and not face any legal liability.

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519 thumbs up.
Terry Ackey
United States
Posted Jun 20, 2012 6:45 pm
  • Software developer / engineer
Isn't this already the case in general for lawsuits where the losing party really shouldn't have sued in the first place? If the dispute is a reasonable one, both parties usually bear their own costs. But if the loser had no business dragging the winner into court, the loser pays the winner's legal fees and court costs.
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512 thumbs up.
David Piepgrass
Mentor Engineering
Calgary
Canada
Posted Jun 20, 2012 10:54 pm
  • Software developer / engineer
Apparently one of the things patent trolls do is to send nasty letters claiming infringement, and asking for license money, but refusing at first to tell the victim what patent(s) they are infringing on, let alone how they are infringing.

This behavior should be considered a show of bad faith from the plaintiff. If the plaintiff (or future plaintiff) knows about an infringement, but refuses to tell the defendant specifically what they are doing wrong, the plaintiff should forfeit any legal awards that they would have otherwise earned from keeping the defendant in the dark.

Moreover, it would be nice if something could be done about the 'protection racket' approach (where patent trolls are not aware of any infringement, and indeed don't necessarily know anything at all about the victim, but send a letter offering not to sue if the company just pays a license fee.)
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508 thumbs up.
Stephan Kinsella
Kinsella Law Group
Houston
TX
United States
Posted Feb 6, 2013 11:33 am
  • Lawyer
The problem with this proposal is that it (a) hinges on the hard to define standard of where it was "easy to see" when the patent was invalid or not infringed, and (b) it implies (I think) that in some cases the patentee might be able to collect fees from the defendant-victim.

In my view, a better proposal would simply specify that the losing patentee-plaintiff always pays the costs of the victim-defendant. This should be automatic, not tied to some nebulous "easy to see" standard; and the victim of the patent suit should never have to pay fees, even if it loses, since the loss is enough of a punishment and should not be compounded. If victims of patent suits face the risk of having to pay the costs of a victorious patent plaintiff, this simply adds to the threat faced by the victim and makes it even more likely they can be bullied into settling for fear of the huge damages that might be faced.
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475 thumbs up.

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Steve H
United States
Posted Mar 18, 2015 7:18 pm
  • Academic
  • Software developer / engineer
  • Internet user
By having the loser pay, this could potentially hurt their business, especially if they are a small one or if it's just one inventor standing up to the troll. Legal battles against a company and a NPE can cost millions to fight and even more if the defendant loses. The defendant needs a safe haven when trying to defend itself from an NPE and have the NPE pay all legal fees if they decide to move forward with the lawsuit. Also, if the NPE loses, they should have to pay the defendant for potential loss of R&D. These legal battles can drag on for years on end which causes a halt in innovation for our economy to grow and prosper. In fact, there is currently a 48% decline in R&D spending because of NPE's winning lawsuits. We must take back our innovation by having the NPE pay all costs and have businesses increase their R&D spending without the fear of NPE's getting in the way. This will drive most of the trolls away if they know that they must pay for it all just to win.
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215 thumbs up.
Dan Carr
United States
Posted Jan 27, 2015 2:56 pm
no question about it. I think the PTO should have an quick process to dismiss patent troll cases but the defendants should be entitled to collect more than just attorney costs - especially if the plaintiff is an NPE
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224 thumbs up.
Jonathon Nooner
United States
Posted Jul 18, 2013 12:51 pm
  • Internet user
I retract my statement from July 16. I didn't think about it this piece of the issue hard enough. Both sides paying the court fee would hurt the small tech company more than the larger patent assertion entities. And so I have reversed my position on this issue. If the loser pays, then the small company could gain some recompense for the difficulties imposed by the frivolous lawsuit. I fully support this concept now.

The average patent lawsuit costs roughly $5 million. It would be better if a party gets hit with a patent infringement case that a small panel of software experts (regarding software patents) could investigate the validity of a patent. The idea being, if the patent is found not to be unique, then it can be invalidated before an expensive and resource heavy trial ever takes place. This would make patent trolling unmarketable because a panel of experts will be more likely to take the bad patents and toss them in the trash.

I would much rather have software engineers investigating the validity of a patent than some court in Eastern Texas who may be biased or may not have any solid understanding about the technology or ideas being discussed.

It would be nice if it were possible to edit the old posts instead of just making new ones.
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380 thumbs up.
Jonathon Nooner
United States
Posted Jul 17, 2013 10:24 pm
  • Internet user
Wouldn't it be far better, if it were possible, to invalidate the patent before it even gets taken to court? What if there were a group of representatives from the software industry, who understand the field... to be able to decide whether or not a patent *should* be valid. I would imagine that this would be a far better solution. Cheaper and better for the system.

The PTO has proven that it either lacks the technical competence or the time or the incentive to properly investigate the history of a technology. Let a group of experts handle it! They would have the incentive, and the competence to take the time that these patents need.

Loser pays all just seems like it would raise the stakes of the case.
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392 thumbs up.
Jonathon Nooner
United States
Posted Jul 16, 2013 1:46 am
  • Internet user
This is a bad idea. Require the loser to pay all of the legal costs? Our legal system isn't perfect. If you get hit with a patent infringement lawsuit as a small company, you fight it in court, then you happen to lose; what are the chances that you can possible afford to pay back all of the fees for the whole case? Slim I presume. I would be opposed to this.
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394 thumbs up.
Anthony Little
Melbourne
Australia
Posted Feb 16, 2013 4:51 pm
  • Software developer / engineer
  • Internet user
I would go further than just the "loser pays" scenario (which already happens in Australia).
I also think the software code solution being submitted with the patent is the right approach.
It appears (from this side of the pacific) that the US patent office grants too many patents that aren't actually backed up by actual specific inventions. A 'method' is not an invention, it is effectively an idea, and should not be patentable.
That method for scanning documents and sending via email is the stupidest patent I've ever heard. It fails the obviousness test completely.

My next comments are a bit more extreme but want to know what people think.

How about changing patent law to follow a general principle so that if a company holds a valid software patent and are not 'active in the marketplace' with products that use that patent, then the patent expires. Give them a specific time period, say 90 days, 6 months, a year (or two, or three, timeframe can be altered to common sense). If they own a patent and don't actually try to produce or sell anything that uses the patent then their patent is invalidated.

This law would immediately wipe out the business model for all patent trolls. Overnight.
So if the scan-to-email trolls want to stay in business they actually have to start selling things that scan-to-email.


What do people think?
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444 thumbs up.
Stephan Kinsella
Kinsella Law Group
Houston
TX
United States
Posted Feb 6, 2013 11:33 am
  • Lawyer
The problem with this proposal is that it (a) hinges on the hard to define standard of where it was "easy to see" when the patent was invalid or not infringed, and (b) it implies (I think) that in some cases the patentee might be able to collect fees from the defendant-victim.

In my view, a better proposal would simply specify that the losing patentee-plaintiff always pays the costs of the victim-defendant. This should be automatic, not tied to some nebulous "easy to see" standard; and the victim of the patent suit should never have to pay fees, even if it loses, since the loss is enough of a punishment and should not be compounded. If victims of patent suits face the risk of having to pay the costs of a victorious patent plaintiff, this simply adds to the threat faced by the victim and makes it even more likely they can be bullied into settling for fear of the huge damages that might be faced.
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475 thumbs up.
Cathal Mc Elhone
Ireland
Posted Jan 14, 2013 6:32 am
  • Software developer / engineer
  • Internet user
The Defendant should be able to choose the location of the court case because these trolls file the court cases in plaintiff friendly areas
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429 thumbs up.
dark flux
United States
Posted Jan 9, 2013 12:49 pm
  • Internet user
how about we shift the cost of lawyers to the GOVERNMENT, so that all lawyers work for no cost to the public? this way, the QUALITY of the legal team will be equal on both sides of the legislation, instead of "The person who can afford the better leagl team wins"...
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462 thumbs up.
John Paul Donoghue
Santa Fe
NM
United States
Posted Nov 4, 2012 3:25 pm
  • Internet user
I think those who do things like this and are found guilty of it should be shut down like those who commit accounting fraud, and the patents they owned being released to the public for anyone to use.
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469 thumbs up.

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