Attorney Fees and Equal Treatment for Plaintiffs and Defendants

Media Queue v. Netflix (Fed. Cir. 2010)

This case involves a classic “improvement patent” scenario. Nick Gross was a longtime Netflix user when he came-up with the idea that the service should provide additional user notifications — such as when the movie queue runs dry. Just before filing suit, Gross and partners formed Media Queue as a holding company. Media Queue then sued Netflix, Blockbuster, and others for patent infringement. Nick is also a patent attorney and a nice guy. We met at a conference last spring.

After construing the claims, the district court dismissed the case based on its summary judgment finding of non-infringement.  The court, however, refused to award attorney-fees to the defendants because the case was not entirely frivolous or filed in bad faith.  Media Queue has appealed the summary judgment.  However, the more interesting aspect of the case is the counter-appeal by Netflix asking the Federal Circuit for an en banc hearing to on the issue of when a court may find an “exceptional case” and award attorney fees to the prevailing party. In particular, Netflix argues that the current law of attorney-fee awards is imbalanced in favor of the plaintiff-patentee.

35 USC 285 simply states that “The court in exceptional cases may award reasonable attorney fees to the prevailing party.”  Several decisions have held that a prevailing-patentee may obtain attorney fees based on a finding of willful infringement — i.e., that the accused infringer was aware of an objectively high likelihood that the patentee would prevail.  Willfulness can be found even when the defendant has a non-frivolous non-infringement of invalidity argument. On the flip-side, however, a prevailing-defendant (accused infringer) seeking attorney fees must show a seemingly higher standard of litigation misconduct or inequitable conduct.

The appeal asks the Federal Circuit to apply the Supreme Court precedent of Fogerty v. Fontasy, Inc. (1994) in holding that plaintiffs and defendants in patent cases are entitled to equal treatment in obtaining attorneys' fees.

The appeal is filed by Mark Lemley’s team at Durie Tangri. Amazon, Facebook, Microsoft, Oracle, Toyota, and others “frequent defendants” have filed briefs supporting en banc hearing.

Documents:

130 thoughts on “Attorney Fees and Equal Treatment for Plaintiffs and Defendants

  1. One major correction to this entry:

    Nick Gross is not a nice guy.

    Nick Gross is a patent troll, filing for invalid and unconstitutional patents on obvious (and abstract!) ideas and then suing people about them.

    Obviously the defendants deserve attorneys’ fees. In fact, Gross should be hit with fines for defrauding the patent office and for filing frivolous lawsuits. He should also be disbarred for the same reasons.

    Nice guy my ass.

  2. “6″–

    Your ridiculous tirade in response to “ping” was disappointing.

    I know that we all have our moments, and that a blog like this is a good place to vent some steam, so you get a pass this time.

    The general tenor here seems to be getting less genial recently–must be the heat.

  3. Malcolm,

    I think it was 6 that invited the technological test back into the useful arts.

    I think 6 also needs to re-read the majority opinion of the Bilski ruling. Useful arts be now much broader than in the seventeen hundreds and that be the LAW.

    As to “working properly”, aint that just a semantic of working properly for whom? maybe it’s a jamming device as opposed to a clean linkage – don’t that depend on the human in the interaction? What about the person wanting a jammin device so that they don’t have to go home?

    ‘Sides, I got me magic googles from me box o’ Lucky Charms.

    Maxie,

    but I think he was doing it to find out how good a test “technical” really is.

    Sorry – I already got dibs on the Boy-named-Sue angle. Ya gonna have to come up with a different cleverism.

  4. “‘That’s called semantics.”

    No it’s not called semantics. It’s called what we concern ourselves with here in the Useful Arts. Believe it or not, people still practice them.

    “Ya see, the problems themselves are not technical. ”

    O, rly? I guess that’s why when your bicycle’s chain keeps slipping off and back on you just pray to jes us to prevent it from hitting your pants leg/leg and getting stuff on you instead of addressing the technical problem of the gear not working properly or the chain being mis-sized etc.

    “They are abstract.”

    Let me know about how abstract they are when your chain snaps because it was mis-sized and you can’t get home.

    “If the so-called problem was divorced from human interaction, would it be a “problem”, or is it only a problem in someone’s mind?”

    It not being a problem if divorced from human interaction doesn’t make it an abstract problem, even if it be a problem “only in someone’s mind”. Either way, at least the technical problem I just raised above is a bit more of a problem than in someone’s mind, if they can’t get home, let’s say from in the woods, it’s going to be a big arse problem for their whole body in about 3 days if they can’t find water.

    Look, I’m glad to see we’ve settled the question. You’re a re tard ping. You see the world through some magic goggles that you acquired when you started plying an unholy trade in order to believe that the trade you ply is not unholy.

  5. Even if the CAFC said “there was no use of such test” is that the final word on the matter? What was the context?

    I recall that Rader J. has used “technical” as a stick with which to beat the Europeans, but I think he was doing it to find out how good a test “technical” really is.

    Watch the frequency with which he picks up that stick from now on. I expect it to diminish, from here on in.

  6. Hey, who invited the technology test back in -

    MaxDrei, probably.

    even the CAFC said there was no use of such test.

    The CAFC is wrong.

  7. It’s just that the skills are not technical in nature, because the problem being solved is not itself technical in nature.

    Hey, who invited the technology test back in – even the CAFC said there was no use of such test.

    “NO problem is “technical in nature”–”

    Are you a re tard or is this statement just an accident? Perhaps a blatant lie?

    6,

    That’s called semantics. Ya see, the problems themselves are not technical. They are abstract. If the so-called problem was divorced from human interaction, would it be a “problem”, or is it only a problem in someone’s mind?

  8. BB,
    I asked for case law to support you claims and you provided nothing but bold faced assertions. Again, since you are the one alleging MM is potentially guilty of defamation, please provide a court case to support your assertion.

    The quotes were directly what you or someone using the BB name posted, so I actually am the bright bulb in the courtroom, the one that wins cases.

    I especially appreciate the butt-face what about insult, I didn’t know this blog appealed elementary children. Also, changing the first word of a name to butt is not the best way to insult someone else given your chosen name, BB.

  9. An allegation that a person has participated in defamation is a statement of fact about the person’s character and fitness to make fun of others. Legally, an allegation of defamation is a statement of fact because it is potentially verifiable. An allegation of defamation is obviously provable vel non. Consequently, it is actionable as revenge, and deformation, at least in Virginia.

    By the by BB, whereabouts of how much did you lose in your case?

  10. Butt-face what about — Screw your head on, dude. The statement you refer to was that it would be funny if Dennis was Moonbeams. That is not a statement that Dennis IS Moonbeams. You must be a real bright bulb in a courtroom, if you’ve ever seen a courtroom.

    Even if the good “professor” is Moonbeams, I would have no problems proving the veracity of any statements I made.

    You are right, seeing people react to my posts was funny. Why are you so nervous? What threats of mine are you referring to? You are obviously Moonbeams in a new disguise and getting jittery.

    Ned said: “Babel Boy, if Mooney thinks a given set of facts amounts to IC, that is just his opinion.”

    If Moonbeams alleges publicly that you are a rapist or that you are a cheat, is that just his opinion, too. You clearly don’t understand the basics of defamation.

    An allegation that a lawyer has participated in IC is a statement of fact about the lawyer’s character and fitness to do his job. Legally, it is a statement of fact because it is potentially verifiable. An allegation of IC is obviously provable vel non. Consequently, it is actionable as defamation, and defamation per se, at least in Virginia.

  11. BB’s comments:
    “The hoot will be when Dennis has to cough up all the names as defendants or witnesses and Mooney, Morgan, 6, and Heller all turn out to be either Dennis or some Turing machine.”

    BB, Denis is a named attorney and highly respected in the field of IP. Did you really post he is engaging in defamation by posting as Mooney (who you accused of engaging in defamation)?

    Here’s your quote regarding MM and malpractice:
    “Moonbeams — getting edgy? Trying to deflect the heat by saying the slip/fall comments were mine? Ha! I would enjoy deposing you. Your malpractice will not cover an intentional tort like libel, you know. Here’s your comment, unfairly and untruthfully referring to Mr. Gross as . . .:”

    Again, this whole libel and defamation subject is fascinating to me and I would like to read some representative cases on this.

  12. Reading BB’s posts and seeing people react was funny. I like how BB did not link any support for his position and appeared to threaten legal action on anonymous posters. I do not understand this at all but this is the internet and no one can take this seriously (even though some posters felt compelled to defend their actions).

    BB, if you are an attorney, you may want to familiarize yourself with the ethics rules in your jurisdiction. I picked California since this is an IP blog and many users are likely in CA:
    link to rules.calbar.ca.gov

    I would also be interested in the cases you defended or were accused of defamation. Can you provide us with a link? Your allegations are serious and I would like, as you said, to be educated on the subject.

  13. “NO problem is “technical in nature”–”

    Are you a re tard or is this statement just an accident? Perhaps a blatant lie?

    Just fyi, there are huge number of technical problems in my art. Huge. The number is gargantuan. A word you so rarely get to use.

  14. Wow, JNG that is quite a story. Inequitable conduct seems relevant, it is not just used to invalidate patents but can also be used to cover 1) the conduct of counsel and 2) the conduct of a party.

    If what you wrote is true, then GL. If it is not true, I think you just sealed the case against you.

  15. Not 6

      JNG, I read the story of your saga. While I think Netflix’s behavior in fabricating the declaration was deplorable, the fact that they made you an offer just meant they thought it might be cheaper to buy you off than defend an infringement suit. Don’t read anything more than that into it (like an implication that they thought that valid claims they might eventually infringe might eventually issue). And to paraphrase Disraeli, their behavior subsequent to the failure to reach a deal with you doesn’t make you less of a troll.

    Possibly, possibly not. It really depends on the claims. What I am puzzled by is just how Netflix could escape infringement? If the claims cover notification of empty queue status, and that is what Netflix does, I don’t get it.

    If there was ever a serious chance that claims of this scope could be obtained, I am sure Netflix bargaining position was taken with some respect and apprehension. They were not merely trying to swat away an annoying fly.

    But the last offer by Netflix with the illusory promise to pay the inventor some money IF his patents issues, but they could determine whether they issued at all, indicates that at least at that time they did not take the pending applications seriously and were treating the inventor like a fool.

  16. Mooney–

    Your assertion that the skills employed in solving such a problem are not technical in nature does not bear scrutiny.

    Further, your assertion that “the problem being solved is not itself technical in nature” has no utility and is misleading, as it suggests that there ARE some problems that are technical in nature. NO problem is “technical in nature”–only approaches to solutions can be technical.

    While I share your general disdain for the patentability of the automation of trivial tasks, your argument is not cogent.

    I expected better. Maybe you’re preparing to take some civil service exams?

  17. “I fail to understand why a lot of software folks seem to think theirs should be the only field in which it is acceptable to take other people’s ideas without compensation. You’ll have to explain that one to me, since it seems to require some kind of communal and universal buy-in that nobody’s ideas are worth paying for. Needless to say, I don’t share that opinion.

    People in any field are welcome to take other people’s “ideas” without compensation. Specific products, apparatuses, methods, and compositions of matter are all that might be prevented from being “taken” without compensation by the enforcement of a patent. Note the lack of the word “ideas” from that list of items.

  18. JNG, I read the story of your saga. While I think Netflix’s behavior in fabricating the declaration was deplorable, the fact that they made you an offer just meant they thought it might be cheaper to buy you off than defend an infringement suit. Don’t read anything more than that into it (like an implication that they thought that valid claims they might eventually infringe might eventually issue). And to paraphrase Disraeli, their behavior subsequent to the failure to reach a deal with you doesn’t make you less of a troll.

  19. IANAE What of the oft-mentioned inventor of the intermittent windshield wiper?

    As I understand it, he did manufacture a working embodiment of his invention and was in the process of scaling up his operations when he discovered his invention had been stolen.

  20. JNG Now I come along, show you how to improve your customer engagement logic to increase retention; you use the invention

    I respectfully submit that there are an infinite number of ways to retain customers of a pre-existing business and the overwhelming majority of them do not merit patent protection, for reasons that are fantastically obvious (or should be).

    I submit you really aren’t familiar enough with this field

    What is “this field”? As the Examiner noted during prosecution, the patent at issue relies heavily on the skilled artisan’s pre-existing knowledge to turn the idea into reality. As I’ve noted many times here and elsewhere, *anybody* can play this game if they have some cash and time to spare. Someone has an idea for automating some trivial task, they draw up a flowchart or two, whip out some claims, toss in some boiler about how anyone skilled in the art can do the necessary programming, and file the application with the PTO. More likely than not, you get a patent (helps to use some unusual terms, even if they are completely made up and nobody really uses them). I’m not saying that no skills are needed to make a living in this manner. It’s just that the skills are not technical in nature, because the problem being solved is not itself technical in nature.

  21. “When have engineers, product developers, or business developers in any field ever wanted to concern themselves with other people’s patents? Why should that decision be theirs to make?”

    You frame the issue wrong. The issue is not merely with them being concerned with “other people’s patents” the issue is more fully rounded out by a number of thins, such as the practical requirement for them to go out of their way to disclose their program (and each of its potentially thousands or millions of functionalities) in such a way as to make it viable prior art so that others cannot patent the same.

    You then reach the wrong “conclusion” or wrong leading questions/led answers.

    However, to provide at least one direct answer to your first question, they have wanted to concern themselves with other people’s patents when the other people become put on their as shats and choose to sue rather than compete in a market. That is one of several thousand answers that I could provide you.

    Even if you were to further refine your question to actually have asked what you meant to ask rather than what you literally did, the answer would simply be that the answer to your question is wholly irrelevant. Specifically if you had asked:

    “When has patent policy/law been based upon whether or not engineers, product developers, or business developers in any field have ever wanted to concern themselves with other people’s patents? And why should it now?”

    Then we’d be closer to a question that would get you an answer that is helpful in the discussion.

    The answer would be that the answer to the question is irrelevant to the discussion at hand. If it had not been for the desire to promote the useful arts your precious patent system would never have popped up in the first place. You have thus posed me with somewhat of a false dilemma since your entire proposition is based upon neglecting the fact that there is no reason for those people mentioned to have concerned themselve with the software patents under discussion in the first place, whereas there may be such a reason in the traditional useful arts. You assume off the bat that there is, when there is not.

    Thus their desire to be left alone is quite relevant as to why policy/law should be set in this area as set forth above as there is no justification for bothering them in the first place. And should you attempt to magic one up from thin air it will be illusory at best.

    As to your second question, the decision should “theirs” to make (aka 99.99% of the people’s) because they are the ones who are cheifly impacted and who pay for the nonsensical “promotion” of this “non-Useful Art”. Again, as before, that’s one answer amongst many thousand that I could provide you, but that’ll just have to do you.

    “Why should software get special treatment?”

    It shouldn’t get special treatment. That is the entire point. 101 provides for 4 things. Products, compositions, apparatii, and methods (aka “arts”). Software is none of those. So sorry. The only reason they’re getting special treatment now is because of badly set office policy and a terrible failure of the courts combined with congressional apathy.

    I’m not having this entire conversation, which I’ve had many times before, over again with you today IANAE. I note that I already spent a good deal of time editing the above post and I tire of it, this post might not have flowed together perfectly because I gave up editing it because I tire of discussing the matter. I think you should be able to get the jist of what I wish to say from the above.

  22. Trying to close the italics because the blog software is seriously handicapped.

    I wish it would allow anonymous posting without typing an email address etc.

  23. I draw a distinction between the practicing entity and the non-practicing entity

    This be a policy driven distinction, mind you.

  24. The practicing entity is producing something that the public can use; the non-practicing entity is not. One entity is using a patent to protect its existing business; the other is using a patent to erect a toll booth on a particular area of technology, thereby making it more expensive for true innovators to provide a valuable good or service in the space.

    What’s wrong, in principle, with inventing something that the public can use and selling it to the company best able to incorporate that something into its existing products or services? What of the oft-mentioned inventor of the intermittent windshield wiper? Is it realistic to ask of his ilk that they directly practice their inventions?

    It doesn’t seem proper to focus on “producing something that the public can use” as the only meritorious activity, when “inventing something that the public can use” is so often the key step in the process.

    Of course, there’s a difference between actually inventing something and placing painstakingly-drafted obstacles in the path of an existing business, but that shouldn’t change the general principle that inventors of all kinds – and by extension, people who acquire the rights of those inventors – are entitled to their royalties.

  25. 2) Wilton: nothing in this patent was a “submarine” to Netflix. In fact, as you see, they vetted the patent while it was still only an application and saw considerable value which is why they gave me a sizable offer. I understand you don’t like software patents, but until Congress says otherwise, they are just as acceptable as any other type of IP. Also it seems to me that you impose a double standard on IP that is invented by someone sitting at a desk in NFLX (GOOD by your standards) and someone sitting at a desk down the block in their home (BAD by your standards). Well, thankfully the law doesn’t draw that artificial distinction between where the inventor happens to be situated employment-wise.

    JNG, you assume way too much about me. I don’t have a problem with software patents per se, and I don’t have a problem with the independent inventor versus the corporate inventor. I draw a distinction between the practicing entity and the non-practicing entity.

    The practicing entity is producing something that the public can use; the non-practicing entity is not. One entity is using a patent to protect its existing business; the other is using a patent to erect a toll booth on a particular area of technology, thereby making it more expensive for true innovators to provide a valuable good or service in the space. One entity suffers economic harm due to an alleged infringer’s infringement; the other entity does not.

    So, unless you can show me the product or service that Media Queue plans to commercialize in accordance with the patent discussed hereinabove, I believe that your company falls in the latter category, and it is my opinion that such entities are a drag on the nation’s economy.

  26. “Yet you still think such inventions are worth nothing?”

    Contrary to popular belief I am not Malcolm, but I would like to address this point. The set of “things that, when implemented, realize a profit” is not coextensive with the set of “things that are entitled to a patent”, and rightly so.

    Let’s try to stay on topic, please. Nobody cares how much money a particular idea/invention is worth, in this context.

  27. Greetings guys

    I see a lot of back and forth and while I can’t comment on all of it, let me just try to address a few points:

    1) Ned H: my post was solely directed to the issue of Netflix asking for attorney’s fees now, based on their claim that the Court SHOULD have looked at equitable factors. Judge Illston never had to see or review the facts I laid out in my post, but will certainly see them if Netflix insists on making their dealings with me part of the consideration.

    2) Wilton: nothing in this patent was a “submarine” to Netflix. In fact, as you see, they vetted the patent while it was still only an application and saw considerable value which is why they gave me a sizable offer. I understand you don’t like software patents, but until Congress says otherwise, they are just as acceptable as any other type of IP. Also it seems to me that you impose a double standard on IP that is invented by someone sitting at a desk in NFLX (GOOD by your standards) and someone sitting at a desk down the block in their home (BAD by your standards). Well, thankfully the law doesn’t draw that artificial distinction between where the inventor happens to be situated employment-wise.

    3) MM: you seem to have some kind of a personal animus or bias against anyone making $$ off of their intellectual creations. You’re entitled to that opinion, but this seems rather narrow minded. In terms of the “value” of these types of patents, lets look at a hypothetical: I operate a subscription business with 10m subscribers, and 5% churn per quarter. Every lost customer costs me $50 in lifetime lost profits and new customer acquisition costs. Now I come along, show you how to improve your customer engagement logic to increase retention; you use the invention, and then your churn is suddenly now reduced to 4.5%. All things being equal, I’ve now reduced your losses by $10m per year over what they were before. Yet you still think such inventions are worth nothing? This is just an example, but I submit you really aren’t familiar enough with this field to be making any accurate evaluations of the merits of any particular technology. You also don’t know me well enough apparently to realize my wife does all the shopping at the market, so I’m not around for the occasional slip and fall.

    4) 6: I fail to understand why a lot of software folks seem to think theirs should be the only field in which it is acceptable to take other people’s ideas without compensation. You’ll have to explain that one to me, since it seems to require some kind of communal and universal buy-in that nobody’s ideas are worth paying for. Needless to say, I don’t share that opinion.

    Good day to you all.

  28. Willton, perhaps. I might go so far as to prevent the defendant from raising the issue of invalidity, the issue where the unclean hands occurred in the hypothetical case at bar, leaving the patent owner to his proofs on infringement, which, may and should result in an injunction.

    Given the strange set of facts as we know them, it would be interesting to find out just why the court found as a matter of law there to be no infringement.

  29. Babel Boy, if Mooney thinks a given set of facts amounts to IC, that is just his opinion. Mooney is commenting on facts stated in court documents, I presume. I believe we the public have a right to fair comment on public facts.

    As to his opinion on ambulance chasers, that is just opinion as well. I am sure even Mr. Gross would understand that, even while disagreeing with his opinion.

    I have never seen anyone here commenting on anything but public facts. No one goes out and states, AFAIK, that anyone has committed IC based on an independent discovery of facts not of public record. Now that “would” be cause for a lawsuit if it happened.

  30. “A ‘feature’ that is no longer wanted should be excised.”

    What do you mean, “no longer wanted”? When have engineers, product developers, or business developers in any field ever wanted to concern themselves with other people’s patents? Why should that decision be theirs to make?

    This concern is neither new nor limited to software. Why should software get special treatment? Kill off all the patents with abstract claims under Bilski, kill off all the patents that are invalid over non-patent prior art, and let the industry deal with the rest of them the same way as people who make car engines or mousetraps or computers or whatever.

  31. Now we all know that the original fraud on the PTO Supreme Court cases involved false affidavits submitted in order to obtain patents. The patents, even if valid, were held unenforceable. But shouldn’t there also be a penalty in some fashion given against the filer of a false affidavit in opposition to a patent?

    Perhaps a suit for tortious interference?

    What happens in court if a defendant is guilty of unclean hands? Should the judge simply ignore their defenses and move straight to the issue of damages?

    No, the patentee should still have to prove his case for infringement and should still be subject to the potential defenses of invalidity and inequitable conduct. Just because the defendant was a bad actor does not mean that infringement should be conclusively presumed.

    A more proper remedy for the bad acts would be treble or punitive damages, not to mention a disciplinary hearing.

  32. Based only on what I know here, I think Netflix has a lot of balls asking for the court to review the issue of attorney fees in this case given that it appears that they, Netflix, just may themselves have committed fraud on the patent office. I haven’t reviewed the record in this case, but I wonder if the issue was raised in the case and somehow resolved in Netflix favor.

    Anybody have any info on this?

  33. 6, software patent? I haven’t checked the claims, but the primary objection is that this patent is directed to an improved way of doing business. Software is plainly incidental.

  34. “I think the answer can only be “no”, if you want any meaningful patent system to exist at all. Creating and using technology is always subject to whatever patents might exist out there, regardless of one’s technical field, and patents are made public so that people in those fields can (theoretically) be aware of them and design around them.

    When you say “alleged ‘inventions’ of software”, what you’re really saying is that software has particular patent quality issues. If that’s the case (and it probably is), that’s the problem that needs to be addressed. The solution is not to scrap a whole category of patents because infringers would rather not be bothered by them – that’s not a bug, it’s a feature.

    A “feature” that is no longer wanted should be excised. And like I said, .01% of people who are software patent attorneys would think like you do here. Every “normal” intelligent business person, engineer, ex-business person or engineer whom I have discussed the situation with sees very clearly the reasons to chop this nonsense off at the source.

    I can assure you that a patent system sans this type of software patent will still be quite meaningful. In fact, should this very patent fall to 101 as an abstract idea the patent system will still be very strong. The same goes for every other patent in this field of “invention”.

  35. BB Ha! I would enjoy deposing you.

    [eye roll]

    Yes, that’s why I keep urging you to get a life.

  36. Thanks Malcolm. Yes it does appear they were doing an end run by giving the info to the patent applicant rather than to the PTO. But my concern is that the affidavit given to the inventor for filing was admittedly and demonstratively false.

    Now we all know that the original fraud on the PTO Supreme Court cases involved false affidavits submitted in order to obtain patents. The patents, even if valid, were held unenforceable. But shouldn’t there also be a penalty in some fashion given against the filer of a false affidavit in opposition to a patent?

    What happens in court if a defendant is guilty of unclean hands? Should the judge simply ignore their defenses and move straight to the issue of damages?

  37. 6: “Last post I made it showed me the little | when stating who it was posted by”

    That happens when the tags are broken. I suggest we blame Malcolm, and also I second the recommendation that Dennis find some way to fix the broken tag thing.

  38. 6: “A better question … is whether or not we want people to be able to write and use whatever software they please, especially to upgrade services they are providing without having to take into account all the alleged “inventions” of software.”

    I think the answer can only be “no”, if you want any meaningful patent system to exist at all. Creating and using technology is always subject to whatever patents might exist out there, regardless of one’s technical field, and patents are made public so that people in those fields can (theoretically) be aware of them and design around them.

    When you say “alleged ‘inventions’ of software”, what you’re really saying is that software has particular patent quality issues. If that’s the case (and it probably is), that’s the problem that needs to be addressed. The solution is not to scrap a whole category of patents because infringers would rather not be bothered by them – that’s not a bug, it’s a feature.

  39. Moonbeams — getting edgy? Trying to deflect the heat by saying the slip/fall comments were mine? Ha! I would enjoy deposing you. Your malpractice will not cover an intentional tort like libel, you know. Here’s your comment, unfairly and untruthfully referring to Mr. Gross as . . .:

    “. . . a slip-and-fall litigator who spends twenty hours every week wandering grocery store aisles hoping to get “unlucky.” Posted by: Malcolm Mooney | Jul 09, 2010 at 04:13 PM

    For your own sake and the sake of your kids’ tuition, you need to moderate your Mel Gibson approach to comments on patent blogs.

  40. man I ha te this posting system.

    Last post I made it showed me the little | when stating who it was posted by so I figured it didn’t post. I reposted, and then here we are with it posted twice with a little addition.

    I would like D or typepad to be able to fix this problem without worrying about infringin’ on a patent.

  41. ” Do we want people to simply ignore the law whenever they feel like it?”

    A better question, pingerdoodle, is whether or not we want people to be able to write and use whatever software they please, especially to upgrade services they are providing without having to take into account all the alleged “inventions” of software. And the answer I’m pretty sure everyone in this country will agree on is yes, save for the .01% of the population who are software patent attorneys.

    I wonder if Nero sued them with his JPEG patent yet.

    Either way, this patent at hand is a prime candidate for an abstract idea 101 analysis.

  42. ” Do we want people to simply ignore the law whenever they feel like it?”

    A better question, pingerdoodle, is whether or not we want people to be able to write and use whatever software they please, especially to upgrade services they are providing without having to take into account all the alleged “inventions” of software. And the answer I’m pretty sure everyone in this country will agree on is yes, save for the .01% of the population who are software patent attorneys.

    I wonder if Nero sued them with his JPEG patent yet.

  43. I’ve seen a situation in which the third party submitted it to the USPTO, and the USPTO relayed it to the applicant. At least the USPTO could adopt a policy of not relaying it in those circumstances.

  44. Ned To everyone, I have never encountered what appears to have happened here. While a patent application is pending, a third party gives the applicant alleged public use/publicantion evidence for submission to the PTO (as a part of his duty of disclosure) that contains false statements of fact. It strikes me that the party doing this should not be allowed to simply walk away without some sort of penalty.

    This is an example (albeit a particularly sordid one) of an end-run around the PTO’s rules for submissions by third parties. By submitting the info to the applicant who then must comply with his/her own obligations under Rule 56, the third party not only avoids having to make any oath about the veracity of the statements, but they also have a chance to get their opinions about the prior art before the Examiner (the rules for third party submissions require any memorandum or briefing about the prior art to be deleted prior to Examination).

    There have been some proposals to reform the rules in this regard, e.g., creating an exception to Rule 56 that would remove the obligation to submit information that was provided to an applicant by a third party. The difficulty is drafting the rule in such a way that distinguishes a third party who is plainly doing an end-run around the third party submission rules from a third party who is “innocently” disclosing information of which the applicant happens to become aware.

  45. Wilton, a patent as a “landmine” implies a subterranean booby trap. But patents have to be published, before they get to the stage of being enforceable, no? So, they are not subterranean, right?

    I had thought the whole point of a patent system is indeed that a patent is a genuine obstacle to innovators: it forces the innovators to find other ways to overcome the technical problem. That is the public policy benefit to the economy.

    First, a patent application is not published until 18 months after the effective filing date (or longer if there’s a nonpublication request), and until it issues, its claims are in a state of flux. That’s a pretty significant window of time for one to create a business and not know that a patent application is looming with claims that are directed to one’s product or service. This is especially true when applicants use continuation practice to encroach on other people’s businesses years down the road. While submarining on the order of Lemelson is largely dead, it still happens to varying degrees.

    Second, you are assuming that anyone who chooses to innovate actually reads the USPTO Official Gazette or regularly conducts patent searches to determine what is out there. That’s not a good assumption to make. Despite what Section 112 says, many issued patents are completely unhelpful for the purpose of knowing the state of the art because they are written in ways that only lawyers can understand. Outside the threat of a lawsuit, a technologist is not going to find much incentive to read patents or published applications. Couple that with a willful infringement jurisprudence that strongly discourages any product maker from doing patent searches at all, and one can understand how the patent system does not further it’s policy objectives very well. I don’t know about you, but the business men and technologists I know typically don’t scour patent thickets as part of their technical education; they leave that to their lawyers that they’d prefer not to hire.

    Third, market participants in a particular industry know what their competition is doing. They don’t tend to know what non-competitors are doing, especially if they don’t know who they are. Few businesses think that they will ever have to compete in the marketplace with a guy who makes his living as a patent agent.

    So yes, patents can and do act as landmines in certain circumstances. Just ask Research in Motion.

  46. BB comments about Mr. Gross being a slip-and-fall lawyer

    That’s funny. First BB pretends to be concerned about Mr. Gross, and then he proceeds to inaccurately recite comments which were, in fact, never made. Odd.

    You really should be more careful, BB. You don’t want to get sued … again. Do you? Or is this just a pathetic attempt to turn the opinion of someone with whom you disagree into something “bigger”? You really do need to get a life, BB.

    But just so there’s no confusion: it is my opinion that patent attorneys who “invent” and file trivial “improvement” patents based on the existing technology of corporations for the presumed purpose of subsequently extracting money from those corporations share much in common with slip and fall attorneys, except of course that most slip and fall attorneys at least pretend to be trying to help an injured person. If you disagree with this comparison, BB, and you want to discuss it further, this is an acceptable time and place to express your disagreement. Go for it.

  47. BB Not to turn this thread into a course in defamation, but it is one of my favorite subjects as I have … been sued…in defamation.

    No kidding? Maybe it’s because you have a really big mouth and you don’t know when to show up.

    Not to turn this thread into a course in defamation, but it is one of my favorite subjects as I have sued…in defamation.

    No kidding? Let me guess: you lost.

  48. Ned

    Not to turn this thread into a course in defamation, but it is one of my favorite subjects as I have sued, been sued, and defended suits in defamation.

    My only point is that when a real, named person is the subject of one’s rants, such as Moonbeam’s vs. Mr. Gross, one has to exercise a lot more discretion than when ranting about some anonymous commentor.

    If you are really a patent lawyer named “Ned Heller”, I would likely be liable for accusing you on this site of inequitable conduct in obtaining a patent, whereas if “Ned Heller” is a pseudonym for a person not identified, I would not.

    For instance, some time ago Moonbeams fired off an unsupported and unsupportable inequitable conduct accusation against a named patent attorney on the basis of a patent the attorney obtained pro se. Clearly actionable defamation. He’s coming perilously close again with respect to his comments about Mr. Gross being a slip-and-fall lawyer, etc.

    As to what is opinion and what is fact, that is a very slippery subject. The courts have held for years that one can insinuate actionable defamatory “facts” through what appears to be “opinion.” So to say that opinion is 100% protected is somewhat naive and legally incorrect.

    This is a public service message the Bulldog Attorneys Defamation Assn. reminding all contributors to play nice. Your IP address can be subpoenaed.

  49. It aint finger waggin Wilton.

    Though I aint surprised that you limit your understanding to that level.

    Must be a policy thing.

  50. Another thing that bothers me is that the claim to prior public use by Netflix is not only bogus, but admittedly so. Yet the Netflix brief seems to repeat this assertion as if it were established fact. I had that impression after reading their brief.

    Now, the patent owner can point this out in their reply brief, it is true, but it also seems to me that there ought to be SOME limits in advocacy. This brief by Netflix, to the extent I understand the situation, seems way beyond the pale of any fair advocacy.

  51. As to the should-woulda-coulda, see your congressmen and solve the problem in the manner that it should be solved – don’t be all willy-nilly with the law as it is. That be a bad road to go down.

    This is a blog, Ping, not a court of law. I’m not representing anyone here, and I’m committing malpractice by expressing my views on the subject of patent law. Spare me your finger-wagging.

  52. LH Netflix could have simply continued with the business model they had been following.

    The patent at issue represents about as much of a change in the NetFlix’ “business model” as if they had painted their office bathrooms a new color.

  53. Wilton, a patent as a “landmine” implies a subterranean booby trap. But patents have to be published, before they get to the stage of being enforceable, no? So, they are not subterranean, right?

    I had thought the whole point of a patent system is indeed that a patent is a genuine obstacle to innovators: it forces the innovators to find other ways to overcome the technical problem. That is the public policy benefit to the economy.

    The only claims that can be enforced are those that are not invalid. All claims that include stuff that is ob via are invalid. Ob Via is the Latin for “total roadblock” in the path of technical progress. So, your landmine can’t block the road.

    So, for these reasons, I think you are wrong.

  54. I don’t think it is right to grant someone a legal monopoly (and let’s face it: that’s what a patent does) to someone that does not allow society to benefit from his or her invention.

    Have you read eBay v. MercExchange at all?

  55. Well, JNG, I read your summary. Truly, NetFlix tossed you a lemon with that bogus set of “publication”. Imagine a giant corporation behaving like that!

    But you should have taken that six figure offer and ran with it all the way to the bank. I don’t think your patent is worth all that much, frankly (I suspect it’s not valid). NetFlix appears to have recognized that you were likely to continue to be a troll thorn in their side and was hoping to pay you to go away so they could avoid the expense of litigation. Either type of expense (the payoff or litigation) is, of course, passed on to their customers. I guess the customers should thank you? Maybe next time use the suggestion box.

    Oh, right. The “strike it rich” thing.

    God Bless America.

  56. I am clearly talking about policy here.

    and

    I’m not saying that it is; I’m saying that it should be.

    Reminds me of an adage:

    If you have the law on your side,, argue the law.
    If you have the facts on your side, argue the facts.

    If you have neither, argue policy.

    As to the should-woulda-coulda, see your congressmen and solve the problem in the manner that it should be solved – don’t be all willy-nilly with the law as it is. That be a bad road to go down.

  57. “Making and using an invention is not part of the quid pro quo, nor a part of the patent rights. You be missing a basic tenant of the patent system.”

    I’m not saying that it is; I’m saying that it should be. I don’t think it is right to grant someone a legal monopoly (and let’s face it: that’s what a patent does) to someone that does not allow society to benefit from his or her invention. A patent should be used to protect one’s business; it should not be used as a land mine just waiting to be stepped upon.

    At the very least I think there should be a higher pleading threshold for patent infringement litigants.

  58. Willton,

    I am going to defend some “trolls” here for a second. As Ping pointed out, Netflix could have simply continued with the business model they had been following. Netflix did not need to infringe Media Queue’s patent.

    Having said that, I do not see MQ winning as I would be surprised if the claims hold up even without the machine or transformation test (not to mention they sound obvious too). However, MQ filed and prosecuted through the patent office and as far as the information I have goes there has been no serious allegation of inequitable conduct on MQ’s part (if any). Therefore, I see no basis for attorneys fees.

  59. whose business model is to game the system

    It’s all a game Wilton – no one is innocent. Everyone is playing – some just play near the edge of (but still within) the rules.

    Making and using an invention is not part of the quid pro quo, nor a part of the patent rights. You be missing a basic tenant of the patent system.

  60. Ping, this has nothing to do with whether someone should obey the law or not; I am clearly talking about policy here. I hope I’m not the only one here who does not appreciate entities whose business model is to game the system in order to squeeze monopoly rents out of established players in the market. I find it highly unlikely that entities like Media Queue ever intend on entering the marketplace with a product that people can actually use. What good is their patent to society if they never intend on making or using the invention therein?

    There’s a very good reason why entities like Media Queue are called “trolls.”

  61. I don’t care how egregious Netflix or its lawyers are acting

    Carte Blanche. How special.

    Let’s take a step back for a moment and realize how blind this stance is. Did Netflix violate a legitimate patent? Could Netflix have continued to operate without the violation of the patent? Did Netflix engage in “egregious” behavior? Was the patent under question so onerous that Netflix method of operation so threatened that they just hada violate the patent? Could they have operated in the old way prior to patent violation? Do we want people to simply ignore the law whenever they feel like it?

    Will those with such blatant anti-patent views simply obey the law?

  62. Ned: No, “leach” would be a better term. I don’t care how egregious Netflix or its lawyers are acting; Netflix has a product that people use and enjoy, and Media Queue does not. Media Queue apparently thinks that it is too difficult to actually compete in the marketplace, so it instead it decides to wave around an issued patent in the hopes of squeezing a license fee out of a company that has created a vibrant market for its goods. You’ll have to excuse me if I think the actions of such entities creates a drag on the economy.

  63. Well, JNG, it does look like you are being smeared. Further, it does also look like the Section 132 “Netflix public use” declaration was submitted with false information that was later admitted to be false.

    To everyone, I have never encountered what appears to have happened here. While a patent application is pending, a third party gives the applicant alleged public use/publicantion evidence for submission to the PTO (as a part of his duty of disclosure) that contains false statements of fact. It strikes me that the party doing this should not be allowed to simply walk away without some sort of penalty.

  64. Dennis

    I have addressed the false statements in the Netflix brief -along with a full accounting of the history of their contacts with me – in this post:

    link to nicdagreek.typepad.com

    thanks for alerting me to this situation as it needed to be remedied

  65. I wonder: does Media Queue have a product or service that it sells? Has it made any effort to produce such a product or service?

    This strikes me as another patentee that suffers no damages from the defendant’s infringement (assuming the patent is valid). There’s a word I like to use for such a patentee, but it escapes me at the moment….

  66. ‘add the words “on the internet”‘…

    A computer implemented method to have computers do what computers are built to do. Include a flowchart, that makes it bulletproof.

  67. Same old s–t – you add the words “on the internet” to a claim on a method of conducting commerce, no matter how obvious, and voila! The USPTO issues you a patent.

  68. Babel Boy, the point I was trying to make is that the folks here are just expressing their opinions. They are not making false statements of facts. Now, it may have been some time since I refreshed my understanding of libel law, but I thought it fundamental that the libel had to be and is exclusively related to a false statement of fact.

    Now if I were to say that so and so is a i d i o t, that clearly is a statement of opinion and not a statement of fact. No one would seriously think otherwise.

    Am I wrong in this?

    Taking it a step further, if someone actually sued someone else for libel in connection with statement of opinion, I would hope that the court would not only summarily dismiss the case, but award sanctions to the defendant.

  69. Hey Babel,
    Someone told me if I go anywhere near them to get what’s mine, they will have me arrested? Is that an okay thing to put in writing, or not?

  70. I will also ensure that you never type or write with your hands ever again.

    LOLOLOLOL

    Something comes to mind about “empty wagons make the most noise.”

    Threats of physical harm over the internetz are a sign of “small-man” syndrome.

    Choose your messages carefully.

  71. The hoot will be when Dennis has to cough up all the names as defendants or witnesses and Mooney, Morgan, 6, and Heller all turn out to be either Dennis or some Turing machine.

    Get a life, BB.

  72. da Greek should learn that when individual members of the public are an integral part of “infringements” on “patented methods” courts are going to chew a bit harder on the “Netflix stole my binky” arguments.

    Try next time to craft your claims to exclude Joe and Jane Sixpack carrying out their ordinary lives in their own home ordering up a few buggy whips online.

    Patents on methods of doing business are so ’90s anyway. You’re showing your age, Nicky.

  73. “The hoot will be when Dennis has to cough up all the names”

    If someone wants my name it’d probably be easier to ask me than him for it, I doubt if he knows it. Alternatively, you could just cipher who I am from the myriad clues provided throughout the years. If D does know who I am, he’s never let on to me. And again,

    link to images.encyclopediadramatica.com

    I’ll be honest with you though, anyone wanting to bring a defamation suit against me and has some evidence of such can ask me for my name and I’ll be sure to provide it. I will also ensure that you never type or write with your hands ever again. And since voice typing is getting more popular and easier I might have to also make sure you are relieved of your ability to speak as well. Gl getting enough money out of me to replace your lost income. Or even enough to justify your constantly looking over your shoulder.

    Weigh your options carefully.

  74. Ned, when you have anonymous folks taking shots at other anonymous folks, I seriously doubt that there is a liability issue.

    But when an anonymous sandbagger defames an actual, flesh and bones, person who is identified not just by name but by a link to his firm’s website, there could be ramifications.

    Just a thought.

    BTW, defamation has nil to do with whether some third person agrees with the defendant-to-be, so I’m not sure where you’re coming from there.

    The hoot will be when Dennis has to cough up all the names as defendants or witnesses and Mooney, Morgan, 6, and Heller all turn out to be either Dennis or some Turing machine.

  75. That a dispositive fact like a completely missing claim element in an accused product is arguably “in dispute” does not make it immune to summary judgment, or sanctions, if there was no credible evidence offered to support a triable fact dispute.
    [Assuming you are lucky to get a judge who will seriously consider S.J. motions promptly, before millions have already been spent on discovery and trial preparation on numerous other issues.]

  76. Just read the NetFlix brief. One of my questions above is answered: the Examiner himself identified and cited at least some of the prior art relating to customer notifications.

    Still not sure how the patent made it out of the gates. How can patentability of this sort of method hinge on the information provided by the notification, unless there is a art-recognized technical obstacle preventing one from obtaining the information?

  77. “One of these days he’s going to make comments like these that tend to cause us to hold a named PatObv contributor in disrepute, and a subpoena is going to be hand delivered to Prof. Couch, forcing him to give up Moonbeam’s identity. Then the SWHTF… ”

    FYI Mooney is probably behind 7 proxies. I know I am :)

    link to images.encyclopediadramatica.com

    link to images.encyclopediadramatica.com

    link to images.encyclopediadramatica.com

    And finally

    link to images.encyclopediadramatica.com

  78. Ah, come on Babel Boy. A lot of us have an attitude here and like to express our opinions in somewhat sarcastic tones. Mooney does no more than this. I may or may not always agree with him, but more often than not, I do agree with him.

  79. Moonbeams is once again pushing the defamation envelope. Certainly not the first time.

    One of these days he’s going to make comments like these that tend to cause us to hold a named PatObv contributor in disrepute, and a subpoena is going to be hand delivered to Prof. Couch, forcing him to give up Moonbeam’s identity. Then the SWHTF…

  80. I don’t see where the plaintiffs were aware of an objectively high likelihood that they would not prevail, so I don’t see that this case would be exceptional if the same standard (but in reverse) were applied to the plaintiff. IMHO it’s the suit for costs by the defendant which is frivolous.

  81. Posted by: TINLA IANYL | Jul 09, 2010 at 03:26 PM “Am I right? You guys are just anti-patent, right?”

    Right. Any more questions?

  82. unpopular “pro se” kind of patentee

    More like a slip-and-fall litigator who spends twenty hours every week wandering grocery store aisles hoping to get “unlucky.”

  83. I can’t resist asking: Isn’t the notorious [and later disclaimed] IBM “token ring toilet queue” patent, aka the “airplane potty pass patent,” 6,329,919, prior art to this Netflix movie queue patent?

  84. “Consider the problem being addressed by the movie queue “invention.” Now consider the solution. Now grab your vomit bag.”

    Are you syaing it’s just “too easy?”

    I mean, the mailbox flag is so easy, a caveman could do it. Or at least an ancient Greek.

  85. Let’s not forget that what Lemley and his posse are doing amount to demagoguery to the extent he is using an unpopular “pro se” kind of patentee who is asserting an unpopular kind of patent, business method, allegedly against a service in use before the filing of his patent application (which is not grounds for finding non infringement) to change the law that is applicable to all of us in a manner most of use who value the patent system would not support.

  86. MM
    I have to laugh at your example, but considering some of what gets patented nowadays, the McD’s hypo is not quite as far-fetched as it might seem. But more realistically, what is the rationale for Subsection (b)(1), giving safe harbor only if a person has “actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent”? Not clear that this is required to harmonize with s102.

  87. TINLA Seems to me that folks who have a problem with a patent being granted on the computerized machine that notifies users when their movie queue is empty would likewise despise ye aulde patent on the mailbox having a flag that, by a weighted mechanical mechanism, automatically raises and lowers as outgoing mail is deposited and picked up.

    Funny that you would consider that the former “invention” is even remotely comparable to the latter. Consider the problem being addressed by the movie queue “invention.” Now consider the solution. Now grab your vomit bag.

  88. smashmouth I didn’t realize how difficult it was to defend on the basis of a prior practice of a claimed method.

    It’s completely fact-dependent, like everything else. Let’s say you file an application today and get a claim to “A method of making a food composition, comprising placing a beef patty between two pieces of bread.” And then you sue McDonald’s. You think they are going to have a difficult time proving invalidity by prior use? Even with all those “rules”?

    Please.

  89. Seems to me that folks who have a problem with a patent being granted on the computerized machine that notifies users when their movie queue is empty would likewise despise ye aulde patent on the mailbox having a flag that, by a weighted mechanical mechanism, automatically raises and lowers as outgoing mail is deposited and picked up. Am I right? You guys are just anti-patent, right?

  90. “And they say that I’m pedantic?

    Posted by: Malcolm Mooney | Jul 09, 2010 at 02:40 PM ”

    Hold on, here. I asked him for a detailed answer. I’m a neophyte, I don’t know the nuances like some of the experienced practitioners and examiners on this board.

    Substantively, I just figured invalidity was a proper defense to infringement. Although as Ned reminds me, subject to a less favorable quantum of proof (from defendant’s standpoint). And thanks for spurring me to review 35 USC 273. I didn’t realize how difficult it was to defend on the basis of a prior practice of a claimed method.

  91. “This case involves a classic “improvement patent” scenario. Nick Gross was a longtime Netflix user when he came-up with the idea that the service should provide additional user notifications — such as when the movie queue runs dry.”

    In other words, this guy knew exactly what was coming (just like we all did), slipped a patent through the patent office and now wants some dollars.

    I have to admit, I give him credit for having the balls to even try to get such a patent, as it is likely 100% KSR obvious ivo the netflix website itself at the time.

    “The court, however, refused to award attorney-fees to the defendants because the case was not entirely frivolous or filed in bad faith”

    That’s a bad call. The whole scheme was in bad faith. It is the definition of bad faith. If you look in the dictionary under “bad faith” 3 years from now, this will be the example.

    “In particular, Netflix argues that the current law of attorney-fee awards is imbalanced in favor of the plaintiff-patentee. ”

    I not only like Netflix for the Nip/Tuck I’m watching right now, but I like the size of their legal balls. I would give them an extra 5$ next month to help pay for this endeavor.

    “Nick is also a patent attorney and a nice guy. ”

    Big surprise on the first part, but the last part you’re obviously mistaken on. Perhaps this is his first foray into as sclownery but I doubt it.

    “The appeal is filed by Mark Lemley’s team at Durie Tangri. Amazon, Facebook, Microsoft, Oracle, Toyota, and others “frequent defendants” have filed briefs supporting en banc hearing. ”

    The real nice guys have formed a posse. Fin awesome. I wish I could ride with you guys on this one.

  92. smashmouth, the courts have repeated held that a defense that the alleged conduct was begun before the filing date or the date of invention is not a proper defense to infringement. Such proofs go to validity, just as you noted.

    And they say that I’m pedantic?

  93. smashmouth, the courts have repeated held that a defense that the alleged conduct was begun before the filing date or the date of invention is not a proper defense to infringement. Such proofs go to validity, just as you noted. The issue of validity is one that has to be proved by clear and convincing evidence and has a lot of other rules about whether a prior, secret use, even qualifies as prior art, for example.

  94. Paul, I am very deeply disturbed by this case if the court found, as a matter of law, that the Netflix system did not infringe if, as you say, the presence or absence of an element was in dispute.

  95. It is alleged that “Media Queue had asserted that several Netflix features constituted the claimed “notification rules” and “queue replenishment control rules” that had been “authorized by the subscriber.” The suit was allegedly continued after that was allegedly disproven and then the “district court found that none of the accused Netflix features satisfied the claimed elements, correctly construed.”
    If this suit really was pursued after adequate showing to the patent owner of THREE clearly missing claim elements, that does seem like a good case to ask what the term “exceptional case” encompasses for defendants in 35 USC 285? But that is yet to be demonstrated here.

  96. Nick: I will post here a fuller, richer history of all the sordid experiences I had with Netflix

    I’d like to hear more about the prosecution of the patent. Before your patent issued, were you aware of any businesses that informed their customers that their requests for merchandise had been satisfied? It seems that if you had been aware of this practice, you would not have believed that you invented a new method of notifying people that their “movie queue” had run dry. And yet you live on earth and you are apparently well educated.

    I find all this rather puzzling. Except of course for the “striking it rich” aspect of the story.

  97. “A patent on the idea of Netflix notifying customers when the queue is empty is an example of everything that some of us think is wrong with “software” or “business method” patents.”

    FACT: Never is the history of the patent office has anyone been granted a patent for a mere idea.

  98. A patent on the idea of Netflix notifying customers when the queue is empty is an example of everything that some of us think is wrong with “software” or “business method” patents.

    Indeed. It’s the kind of “invention” that is typically filed by a patent attorney trying to “strike it rich” in a lawsuit against a deep-pocketed corporation.

    There’s some word for this business strategy. I just can’t remember what it is right now.

  99. “It is not a proper defense to infringement to prove that the infringing conduct was begun before the patent was filed. . . .
    Posted by: Ned Heller | Jul 09, 2010 at 01:27 PM”

    Please explain. If Netflix was engaging in infringing conduct say, before the earliest effective filing date of the patent, then isn’t that a challenge to the validity of the patent? In other words, invalidity under s102(a)? What am I missing?

  100. It is not a proper defense to infringement to prove that the infringing conduct was begun before the patent was filed. But this is apparently what Netflix argued, at least in part, and it is being repeated here on appeal.

    From the brief:

      Media Queue asserted the allegedly novel patent against preexistíng Netflix features, (A1943, A1944-45.) including those that had been expressly disclaimed in the patent itself.

    I would politely suggest that if Netflix won based on a bogus legal theory, it is not remotely entitled to sanctions whatsoever.

  101. Nick Gross was a longtime Netflix user when he came-up with the idea that the service should provide additional user notifications — such as when the movie queue runs dry. Just before filing suit, Gross and partners formed Media Queue as a holding company. Media Queue then sued Netflix, Blockbuster, and others for patent infringement. Nick is also a patent attorney

    I think there’s another term that can be accurately used to describe Nick.

  102. Babel Boy,

    Fed. R. Civ. Pro 68(d) is what you suggest, but applies only to certain costs.

  103. If the a court finds that summary judgment is appropriate that seems to be a pretty good reason for saying that the lawsuit had no substantial merit and should not have been brought in the first place. Rather than having a two stage test maybe Defendants should more or less automatically get attorney fees if they win on summary judgment.

    A patent on the idea of Netflix notifying customers when the queue is empty is an example of everything that some of us think is wrong with “software” or “business method” patents.

  104. I like the system where if a party, say P, makes D a settlement offer and D refuses, if judgment is entered for P in excess of P’s offer, D pays the judgment and also pays P’s costs.

    So P sues for $5M and offers to settle for $1M. If D refuses to settle and A gets judgment for $1.1 M, D also has to pay A’s lawyers.

    Of course, both parties can make offers. For instance, if D makes a counteroffer and P refuses the counteroffer and then judgment comes in for P in an amount less than D’s counteroffer, then P gets the judgment but has to pay D’s costs.

    So, if P files an infringement suit for $5M and D considers the suit groundless, D offers to settle for $20, which, of course, P rejects. If D wins, D gets its lawyers paid.

    Same case, but P honestly thinks it has a case and counter-offers $1M. If P gets judgment for over $1M, D pays P’s lawyers. If P gets judgment for between $1M and $20, nobody pays the other’s lawyers. If P doesn’t get at least $20; i.e., D wins, P pays D’s costs.

    This system lets the parties themselves evaluate whether the suit is frivolous, or how frivolous. The court would not be awarding costs at all unless there is funny business during litigation.

    I think the Brits have a system similar to this. If they don’t, they should.

  105. “…social costs…”
    “…The patentee, a disgruntled Netflix customer, drafted claims to a purported improvement on the admitted prior art Netflix system…”

    whatever.

  106. Filing and maintaining a frivolous patent suit is grounds for declaring it exceptional. Eltech Systems Corp. v. PPG Industries, Inc., 903 F.2d 805, 811 (Fed.Cir.1990). Isn’t this analogous to willful infringement sanctions?

  107. Nick, now you said it. Lying. That is what I cannot stand in litigation. It is a constant drumbeat of half truths, misrepresentations and intentional misconduct. If you can demonstrate even one lie, I am all for you, brother. I would even go so far as to see the lying litigators hanged, or if not hanged, at least fined.

  108. What about the declaratory judgment defendant whose patents are found not invalid, enforceable, and infringed? I don’t know if the statute applied to them? But as a policy matter, should prevailing DJ defendants also have an easier time getting attorneys fees?

  109. This patent appears to claim a software system that lets the user set rules for empty queue notification, lets the user set rules for queue replenishment and requires that the user indicate whether resultant replenishments are to happen automatically.

    Seems like a patent composed, IMHO, with the expectation that the required expertise in the enforcement transaction will be multitudes greater than the required skilled in the art expertise for inventiveness. In short, a simple patent tailor made for someone with enforcement expertise.

    Some might point out that these characteristics should have minimal bearing on any exceptional case consideration.

    But its hard for me to believe that a court is not swayed to favor a claim covering groundbreaking and/or costly innovation over one covering a few files of source code development when determining the ‘overreaching’ nature of a patent infringement case.

  110. Greetings Dennis
    I appreciate that you did not join in on the “character assassination” bandwagon I now see being promoted by Netflix in the appeal. Unfortunately when the merits are against them its par for the course now for big companies to try and impugn small inventors to curry favor and gain sympathy. If I can, I will post here a fuller, richer history of all the sordid experiences I had with Netflix -(and here I mean their representatives, not their service) so the truth can be read about their efforts to buy my IP, and then their subsequent futile efforts to kill the same in the PTO when the prize was not to be theirs. Their papers contain a number of bald faced lies and omissions(surprise surprise) that really should not go unaddressed at this point.

  111. Bobby, I might agree with you if the patent is invalid for inequitable conduct, but not if it’s not the patentee’s fault. Remember, the patentee only gets attorney’s fees for will ful infringement on the part of the defendant. It strikes me as equitable on the flip side to award defendants attorneys fees if the patentee knew there was no infringment (frivolous lawsuit), or knew the patent was invalid (due to their own inequitable conduct).

  112. “Frivolous lawsuit” on the plaintiff side seems like a proper flipside to “willful infringement” on the defendant side. Isn’t that what the Court ruled here? How is that in conflict with “the Supreme Court precedent of Fogerty v. Fontasy, Inc. (1994) in holding that plaintiffs and defendants in patent cases are entitled to equal treatment in obtaining attorneys’ fees?”

  113. bobby,

    How is it equitable to require the patentee to pay for something the government should have done?

  114. Since plaintiffs have all the presumptions in an infringement suit, anytime a defendant wins, especially at summary judgment, it should be treated as an exceptional case. Further, anytime a defendant proves invalidity, he should get his fees as well.

    The current system rewards trolls with million-dollar war chests because they are exposed to almost zero risk while defendants are faced with the prospect of million-dollar fees and nothing to show for it even when they win.

    A defendant who succeeds on invalidity has likely spent at least hundreds of thousands of dollars to do something the PTO should have done. He’s also done a public service by invalidating a patent that shouldn’t have issued and thereby freeing the marketplace and removing uncertainty for other potential “infringers.” In exchange for this service, the law should require the holder of the invalid patent to pay his fees.

  115. I hope that [unlike Bilski] the facts of this case make for a good test case, in case this issue of reimbursing attorney fees for prevaling defendants finally gets more seriously considered. It may be the only practical way to discourage baseless troll suits, since most defendants just “pay off” to avoid the huge litigation costs, and S.J.’s like the one here, or in KSR, are rare, especially in E.D. TX.
    I am sure that the statistics, if someone does them, will show that although 35 USC 285 is “prevailing party” neutral, far more “exceptional cases” are found in favor of patent owners to award them “reasonable attorney fees”.
    Furthermore, because a high burden of proof and evidence is on defendants for almost every issue except infringement and damages in patent litigation, and defendants normally have much higher discovery burdens and costs, the defendants who do not promptly give up and “settle” normally have far higher attorney fees than patent owners.

  116. I correct myself. S. 505 is discretionary (“may award”) but there is no conditional language. I don’t think any change in the law is needed other than perhaps to mention that undue trollishness, ie litigation misconduct including frivolity by a plaintiff may trigger exceptionality in the court’s discretion. Tempest in a teapot, IMO.

  117. IIRC s. 505 of the Copyright Act is mandatory on fees to prevailing party (“shall award”) and contains no condition like “exceptional.” When Fogerty was decided there was a clear bias in favor of prevailing plaintiffs in copyright litigation.

    I don’t see this in patent cases at all. Just more whining from big “tech” who built their businesses on ignoring IP of others. Karma is a b*tch and these guys are bent on wrecking the system for everyone else.

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