Moving forward with a small claims patent court

The Patents County Court has been deciding "small" patent cases for the past 20 years. Under Hon. Colin Birss, the court now limits claims to £500,000. Larger claims can be brought in the High Court. In the US, all patent infringement cases are heard in Federal District court. And, it ordinarily does not make much sense to file a patent lawsuit when there is less than $1,000,000 at stake.

Over the next year, the USPTO and perhaps other agencies will be holding hearings on whether the US should develop a small claims proceeding for lower-value patent enforcement actions. In a recent release, the USPTO has asked for input on whether this type of enforcement proceeding would have market value and, if created, what parameters should guide its implementation.

Among the information of interest to the USPTO is whether there is a need and desire for this type of proceeding, in what circumstances is this proceeding needed if such a need exists, and what features this proceeding should possess. In particular the USPTO seeks information about core characteristics of a patent small claims proceeding including characteristics such as subject matter jurisdiction, venue, case management, appellate review, available remedies, and conformity with the U.S. constitutional framework (e.g. 7th Amendment).

https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-30483.pdf. Email comments to David.Gerk@uspto.gov by March 18, 2013.

Prior proposals in the 1980's and 1990's received positive treatment from the bar, but failed to garner congressional support.

32 thoughts on “Moving forward with a small claims patent court

  1. You still do not see the point of my post – please read it again and note the juxtaposition.

    Yeah, that’s probably my fault.

  2. The shoe not only doesn’t fit, it’s for the wrong species.

    There is a far cry difference between “push the envelope” and knowing the law in order to push that envelope and your openly too-pessimistic “subjet matter of doubtful eligibility

    If it is “doubtful,” it is past the edge of the envelope and not only are you NOT conscientiously serving your client, you are wasting their money. Obviously, “push the envelope” does not mean the same thing to eash of us.

    only source of income” – again, you seek to misjudge an entire group of people – as if their ethics (as well as judgment) were solely determined by their pocketbook.

    I simply say thee nay.

  3. If the shoe fits, anon, then put it on.

    Some of my most esteemed colleagues routinely “push the envelope” on eligibility/patentability. As a conscientious attorney representing the interests of a client that is active in such fields of commerce, you would be neglecting your duty if you didn’t. I would not dream of insulting them for doing their duty. It is just that, if this is their only source of income, and all they do, it is not ideal preparation for judging dispassionately and disinteresedly whether there are not enough duly issued claims for the good of the national economy, or too many.

  4. Who did Max insult, then? You called him insane because he suggested that somebody else might be involved with subject matter of doubtful validity?

    Better insanity, please.

  5. Did I indicate that I thought he was talking about me? (Answer: No)

    Am I surprised that you jump to the wrong conclusion? (Answer: No) you miss the point of my post completely with your too-eager focus on me, as usual.

    Better trolling please.

  6. I think you overestimate the cost of appeal, Max. It’s inexpensive, compared to trial. I’d favor more appeals, in a way – bifurcate the lower court proceedings so that you deal with the claim construction/validity issues first, then allow for an interlocutory appeal. Only after those things are resolved do you get into the expensive product-related discovery, etc., that are needed for infringement determination and damages.

    I think a rule that a losing appellant pays the appellee’s costs would be worth considering.

  7. And you MaxDrei, a voice of insanity. Taking a well written post debunking and anti-patent article (just consider the article’s source link: techdirt), and turning your post into an (unsubstantiated) insult – subject matter of doubtful eligibility.

    Love (not) the implicit blaming on the patent attorneys that you do – as if some of us cannot separate what we are paid to do from understanding the context within which we do what we are paid to do.

    I am not impressed – as usual.

  8. Yeah, really. That’s one of the nicest and most thorough smack downs of the insane anti-IP trolls I’ve ever seen. Kudos to CC.

    I’m sure the troll will totally ignore the reality presented by CC though.

  9. Loser pays at trial is a terrible idea. The US has a better economy and system than europe, and I’d like to keep it that way.

    Loser (of the appeal) pays for the appeal? Now that’s interesting.

  10. That’s a great idea as long as you never intend to enforce anything. Sometimes, you lose even when you should win. Litigation is almost less certain than prosecution.

  11. CC, you are the voice of sanity. And all expressed in such excellent English. I bet you are NOT a person (like so many here) whose main income comes from writing, filing and prosecuting patent applications on subject matter of doubtful eligibility.

    I’m impressed. May I ask; how did you find your way to this blog?

  12. Strange, my own country has pretty weak IP laws (or more precisely, very weak enforcement of those laws) and has regularly featured in the US Congress’ IP blacklist. But far from being among the “fastest growing economies”, it is currently in the agonies of recession…
    There is something called “economic cycles”, you know. Even if a country is momentarily experimenting fast economic growth, this does not necessarily imply that this growth is sustainable in the long or even medium term. The fastest-growing economy in the world is Equatorial Guinea, a notoriously corrupt, brutish place to live, but which just happens to sit on top of great oil reserves. Not many of its citizens get to benefit from that growth, though.
    Now look at the so-called BRICS economies: like that in Equatorial Guinea, the growth in Brazil, Russia and South Africa is fundamentally based on a raw materials windfall. In the long term, such extraction-based growth often turns to be more a curse than a blessing: very few countries have been able to manage such windfalls sustainably (it’s basically a list of one: Norway).
    India and China are in a different category: their “raw materials” are their massive workforces. But even so, China’s economy is looking worryingly bubbly, with rampant real estate speculation. And in both countries, the Rule of Law is far from being a given, which is not a situation conducive to sustainable economic growth. Again, China does have very strong IP laws, as a matter of fact, but their enforcement is…well…spotty. However, this is not a specific problem of IP, but a general problem of the Rule of Law, which generally makes business in China unsuitable for the faint-hearted.
    And if the author of the article really believes that Nigeria, of all countries, is an example to follow, I have an e-mail from a Nigerian prince who would like to make business with him…

  13. So then if we had cheap labor (which we actually do considering how productive our labor is on avg compared to developing countries like BRIC) and got rid of our “strong” IP then we would also have a growing economy like that?

  14. Loser Pays is much needed in the US anyway. Maybe it would also help in keeping “small” claims from getting removed or appealed to the regular courts.

  15. Regardless of affordability, a process like this is needed to improve any patent system. Any such developments would necessarily have to begin with the basic policy that all parties understand the value of a patent and have a basic knowledge of the patent process.

  16. Good point about contingency fees. In England it goes like this. David takes out legal expenses insurance and finds contingency fee law firm Grabbit & Runne which then bills at double its normal hourly rate. If David wins, Goliath is required by the court to pay those hourly fees, and the insurance premium. If David, surprisingly, does not win, G&R do not bill David.

    So when renowned patent law firm G & R informs Goliath that they have invested in the case, Goliath promptly settles.

    I’m not a litigator. I’m told the English way is not a universal panacea. But it’s a good start, eh?

  17. In the U.S. limited-resource independent inventors and small companies can now rather easily obtain contingent fee [% of recovery fees only] representation for patent suits if their patent actually has merit and is being infringed.
    Furthermore, most sued defendents will settle for a payment that might well exceed what the patent owner would get in a small claims court, in order to avoid the high legal costs to defend patent suits.
    Also, if Both sides really wanted a low cost patent validity and infringement determination they could agree to fixed fees and fixed time compulsory arbitration with volunteer patent attorneys.

  18. Can we discuss how to manage appeals? All the speed and economy in the world helps David not one jot if loser Goliath simply appeals everything to a cumbersome and expensive appeal instance.

    In England, at least three things deter Goliath from behaving like that i) Goliath has to ask permission to appeal ii) the likelihood of a reversal is slim iii) a Loser Pays rule on costs.

    Will you not just better call the whole thing off?

  19. Here’s hoping.

    You know what the rub is though, right? These specialized judges would probably need to be patent attorneys such that they could understand the technology. You’d get consistent, fast resolution, and I bet eventually, if you had a case on the bubble of 1M, you’d see people just opting to reduce their claim to 1M to get the quick, certain resolution of the small claims court. The district court lawsuit gaming farce would be near an end.

  20. No. and no help needed. In my last sentence I was alluding to why Congress failed to support; because also back in the 1980′s and 1990′s it was thrall to Goliath. Is that conceivable?

  21. Did you miss the last sentence? Let me help:

    Prior proposals in the 1980′s and 1990′s received positive treatment from the bar, but failed to garner congressional support.

  22. I’m hoping for an informative thread on this one, accustomed as I am to being told that the patents systems of every country except the USA is set up to serve BigCorp while that of the USA is uniquely adapted to serve the interests of David, against Goliath.

    Doesn’t little David need a Small Claims Court then? Or is it just that the Congress is in thrall to Goliath?

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