IP Law Professors Rise-Up Against Patent Assertion Entities

By Dennis Crouch

A group of sixty US intellectual property law professors have signed a letter to Congress supporting anti-troll patent reform legislation. This effort was driven by Professor Love of Santa Clara and is also signed by Professors Bessen, Goldman, Ghosh, Lemley, Meurer, Samuelson, Sprigman, and others. [Download ProfessorsLetterOnTrolls].

A key introductory line from the letter:

Despite our differences, we all share concern that an increasing number of patent owners are taking advantage of weaknesses in the system to exploit their rights in ways that on net deter, rather than encourage, the development of new technology.

The basic argument is that patent litigation is expensive and frontloaded in such a way that "creates an opportunity for abuse" because early-state settlement is focused more on the cost of litigation rather than the value of the patent or its underlying technology. And, it is the recent "rise of patent assertion entities" that has "disrupted [the] delicate balance" of the patent system.

The professors propose the following six general reforms:

  1. To discourage weak claims of patent infringement brought at least in part for nuisance value, we recommend an increase in the frequency of attorneys' fee awards to accused patent infringers who choose to fight, rather than settle, and ultimately defeat the infringement allegations levelled against them.
  2. To reduce the size and front-loaded nature of patent litigation costs, we recommend limitations on the scope of discovery in patent cases prior to the issuance of a claim construction order, particularly with respect to the discovery of electronic materials like software source code, emails, and other electronic communications.
  3. To further protect innocent retailers and end-users that are particularly vulnerable to litigation cost hold-up, we recommend that courts begin to stay suits filed against parties that simply sell or use allegedly infringing technology until after the conclusion of parallel litigation between the patentee and the technology's manufacturer.
  4. To facilitate the early adjudication of patent infringement suits, we recommend that patentees be required to plead their infringement allegations with greater specificity.
  5. [To increase transparency and confidence in the market for patent licensing, we recommend that Congress require] patentees … to disclose and keep up-to-date the identity of parties with an ownership stake or other direct financial interest in their patent rights.
  6. [To increase transparency and confidence in the market for patent licensing, we recommend that] Congress consider additional legislation designed to deter fraudulent, misleading, or otherwise abusive patent licensing demands made outside of court.

Without a doubt, there is merit to the professors' case, although I bristle at the letter's broad-brush statements and overt stance that is pro-large-corporate-entity. I have a few thoughts regarding the specific suggestions:

(1): Anti-plaintiff fee shifting will have the obvious impact of altering the availability of contingency-fee counsel which may be the motivation of the suggestion. One problem is that almost every patent in litigation is amenable to a good-faith challenge on either invalidity or non-infringement grounds. Predicting winners and losers is a difficult prospect and this gives me little faith that the fee-shifting proposal will primarily target low-quality claims but instead will target risk-averse plaintiffs. The professors' suggestion here to reward non-settlement does not provide me with any confidence that overall litigation costs will be reduced. On the other hand, this proposal (especially if focused on invalidating patents) could serve as something like a bounty for attorneys to challenge bad patents and, as a consequence, would lessen the free-rider problem associated with a single company challenging a patent that is also being asserted against competitors.

(2) & (4): I agree that there is plenty room for reducing discovery costs and for raising pleading requirements without substantially harming patentee rights. However, one problem for both software and method patents is that some forms of infringement are difficult to truly pin-down absent discovery. Some work must be done on any particular proposals to ensure that the result is not a clear pathway unactionable infringement.

(3) Regarding customer lawsuits, we have a difficulty in line drawing because, for the most part, these are not simply customer lawsuits. Rather, the patents being asserted cover particular methods or systems that take advantage of a particular device on-the-market (such as a wireless router or flat-panel television). In this situation, the differences are such that the manufacturer and retailer typically refuse to honor their implied warrantee that the good is "free of the rightful claim … of infringement or the like." UCC 2-312(3). And so, the question is whether these use cases will fit within the definition. One reason for the downstream lawsuits is that downstreamers typically value the technology more than upstreamers with the result of greater damage award. (We know the downstreamers valued it more because they purchased it from the upstreamers). Since the exhaustion doctrine only allows a patentee to recoup at one point in the stream-of-commerce, it makes sense that they would focus on the highest valued user.

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Text of the letter:

To Members of the United States Congress:

We, the undersigned, are 60 professors from 26 states and the District of Columbia who teach and write about intellectual property law and policy. We write to you today to express our support for ongoing efforts to pass patent reform legislation that, we believe, will improve our nation's patent system and accelerate the pace of innovation in our country.

As a group we hold a diversity of views on the ideal structure and scope of our nation's intellectual property laws. Despite our differences, we all share concern that an increasing number of patent owners are taking advantage of weaknesses in the system to exploit their rights in ways that on net deter, rather than encourage, the development of new technology.

Several trends, each unmistakable and well supported by empirical evidence, fuel our concern. First, the cost of defending against patent infringement allegations is high and rising. The American Intellectual Property Law Association estimates that the median cost of litigating a moderately-sized patent suit is now $2.6 million, an amount that has increased over 70% since 2001. These and other surveys suggest that the expense of defending even a low-stakes patent suit will generally exceed $600,000. Moreover, the bulk of these expenses are incurred during the discovery phase of litigation, before the party accused of infringement has an opportunity to test the merits of the claims made against it in front of a judge or jury.

The magnitude and front-loaded nature of patent litigation expenses creates an opportunity for abuse. Patent holders can file suit and quickly impose large discovery costs on their opponents regardless of the validity of their patent rights and the merits of their infringement allegations. Companies accused of infringement, thus, have a strong incentive to fold and settle patent suits early, even when they believe the claims against them are meritless.

Historically, this problem has largely been a self-correcting one. In suits between product-producing technology companies, the party accused of infringement can file a counterclaim and impose a roughly equal amount of discovery costs on the plaintiff. The costs, though high, are symmetrical and, as a result, tend to encourage technology companies to compete in the marketplace with their products and prices, rather than in the courtroom with their patents.

In recent years, however, a second trend – the rise of "patent assertion entities" (PAEs) – has disrupted this delicate balance, making the high cost of patent litigation even more problematic. PAEs are businesses that do not make or sell products, but rather specialize in enforcing patent rights. Because PAEs do not make or sell any products of their own, they cannot be countersued for infringement. As a result, PAEs can use the high cost of patent litigation to their advantage. They can sue, threaten to impose large discovery costs that overwhelmingly fall on the accused infringer, and thereby extract settlements from their targets that primarily reflect a desire to avoid the cost of fighting, rather than the chance and consequences of actually losing the suit.

To be sure, PAEs can in theory play a beneficial role in the market for innovation and some undoubtedly do. However, empirical evidence strongly suggests that many PAEs have a net negative impact on innovation. Technology companies – which, themselves, are innovators – spend tens of billions of dollars every year litigating and settling lawsuits filed by PAEs, funds that these tech companies might otherwise spend on additional research and design. Surveys also reveal that a large percentage of these suits settle for less than the cost of fighting, and multiple empirical studies conclude that PAEs lose about nine out of every ten times when their claims are actually adjudicated on their merits before a judge or jury.

The impact of these suits is made more troubling by the fact that PAE activity appears to be on the rise. Empirical studies suggest that at least 40%, and perhaps as high as 59% or more, of all companies sued for patent infringement in recent years were sued by PAEs. PAE suits were relatively rare more than a decade ago, and they remain relatively rare today elsewhere in the world.

More worrisome than these bare statistics is the fact that PAEs are increasingly targeting not large tech firms, but rather small business well outside the tech sector. Studies suggest that the majority of companies targeted by PAEs in recent years earn less than $10 million in annual revenue.

When PAEs target the numerous small companies downstream in the supply chain, rather than large technology manufacturers upstream, they benefit in two ways. First, for every product manufacturer, there may be dozens or hundreds of retailers who sell the product, and hundreds or thousands of customers who purchase and use the technology. Patent law allows patent owners to sue makers, sellers, or users. Suing sellers or users means more individual targets; some PAEs have sued hundreds of individual companies. And, more targets means more lawyers, more case filings, more discovery, and thus more litigation costs overall to induce a larger total settlement amount.

Second, compared to large manufacturers, small companies like retailers are less familiar with patent law, are less familiar with the accused technology, have smaller litigation budgets, and thus are more likely to settle instead of fight. In fact, many small businesses fear patent litigation to such an extent that they are willing to pay to settle vague infringement allegations made in lawyers' letters sent from unknown companies. Like spammers, some patent owners have indiscriminately sent thousands of demand letters to small businesses, with little or no intent of actually filing suit but instead with hopes that at least a few will pay to avoid the risk.

This egregious practice in particular, but also all abusive patent enforcement to some extent, thrives due to a lack of reliable information about patent rights. Brazen patent owners have been known to assert patents they actually do not own or, conversely, to go to great lengths to hide the fact that they actually do own patents being used in abusive ways. Some patent owners have also sought double recovery by accusing companies selling or using products made by manufacturers that already paid to license the asserted patent. Still others have threatened or initiated litigation without first disclosing any specific information about how, if at all, their targets arguably infringe the asserted patents.

In short, high litigation costs and a widespread lack of transparency in the patent system together make abusive patent enforcement a common occurrence both in and outside the technology sector. As a result, billions of dollars that might otherwise be used to hire and retain employees, to improve existing products, and to launch new products are, instead, diverted to socially wasteful litigation.

Accordingly, we believe that the U.S. patent system would benefit from at least the following six reforms, which together will help reduce the cost of patent litigation and expose abusive practices without degrading inventors' ability to protect genuine, valuable innovations:

  1. To discourage weak claims of patent infringement brought at least in part for nuisance value, we recommend an increase in the frequency of attorneys' fee awards to accused patent infringers who choose to fight, rather than settle, and ultimately defeat the infringement allegations levelled against them.
  2. To reduce the size and front-loaded nature of patent litigation costs, we recommend limitations on the scope of discovery in patent cases prior to the issuance of a claim construction order, particularly with respect to the discovery of electronic materials like software source code, emails, and other electronic communications.
  3. To further protect innocent retailers and end-users that are particularly vulnerable to litigation cost hold-up, we recommend that courts begin to stay suits filed against parties that simply sell or use allegedly infringing technology until after the conclusion of parallel litigation between the patentee and the technology's manufacturer.
  4. To facilitate the early adjudication of patent infringement suits, we recommend that patentees be required to plead their infringement allegations with greater specificity.

And finally, to increase transparency and confidence in the market for patent licensing, we recommend:

  1. that patentees be required to disclose and keep up-to-date the identity of parties with an ownership stake or other direct financial interest in their patent rights, and
  2. that Congress consider additional legislation designed to deter fraudulent, misleading, or otherwise abusive patent licensing demands made outside of court.

In closing, we also wish to stress that as scholars and researchers we have no direct financial stake in the outcome of legislative efforts to reform our patent laws. We do not write on behalf of any specific industry or trade association. Rather, we are motivated solely by our own convictions informed by years of study and research that the above proposals will on net advance the best interests of our country as a whole. We urge you to enact them.

Sincerely,

John R. Allison (Texas); Clark D. Asay (Penn State); Jonathan Askin (Brooklyn); Gaia Bernstein (Seton Hall); James E. Bessen (BU); Jeremy W. Bock (Memphis); Annemarie Bridy (Idaho); Irene Calboli (Marquette); Michael A. Carrier (Rutgers); Bernard Chao (Denver); Andrew Chin (UNC); Ralph D. Clifford (UMass); Jorge L. Contreras (American); Rebecca Curtin (Suffolk); Samuel F. Ernst (Chapman); Robin Feldman (Hastings); William T. Gallagher (Golden Gate); Jon M. Garon (Northern Kentucky); Shubha Ghosh (Wisconsin); Eric Goldman (Santa Clara); Leah Chan Grinvald (Suffolk); Debora J. Halbert (Hawaii); Bronwyn H. Hall (Berkeley); Yaniv Heled (Georgia State); Christian Helmers (Santa Clara School of Business); Sapna Kumar (Houston); Mary LaFrance (UNLV); Peter Lee (Davis); Mark A. Lemley (Stanford); Yvette Joy Liebesman (SLU); Lee Ann W. Lockridge (LSU); Brian J. Love (Santa Clara); Glynn S. Lunney, Jr. (Tulane); Phil Malone (Stanford); Mark P. McKenna (Notre Dame); Michael J. Meurer (BU); Joseph Scott Miller (Georgia); Fiona M. Scott Morton (Yale); Lateef Mtima (Howard); Ira Steven Nathenson (St. Thomas); Laura Lee Norris (Santa Clara); Tyler T. Ochoa (Santa Clara); Sean A. Pager (Michigan State); Cheryl B. Preston (BYU); Jorge R. Roig (Charleston); Jacob H. Rooksby (Duquesne); Brian Rowe (Seattle); Matthew Sag (Loyola Chicago); Pamela Samuelson (Berkeley); Jason Schultz (NYU); Christopher B. Seaman (W&L); Carl Shapiro (Berkeley); Lea Shaver (Indiana); Jessica Silbey (Suffolk); Christopher Jon Sprigman (NYU); Madhavi Sunder (Davis); Toshiko Takenaka (Washington); Sarah Tran (SMU); Jennifer M. Urban (Berkeley); Samson Vermont (Charlotte)

189 thoughts on “IP Law Professors Rise-Up Against Patent Assertion Entities

  1. Christ almighty. We can’t even get the Feds to force manufacturers which foodstuffs have GMO components. Now we want the FEDS to force businesses to disclose valuable trade secrets for transparency. I got news for ya, they already know. Ever heard of the NSA! Just doesn’t make sense to force one to disclose their own interest in a financial transaction. If you want confidence in the system-start with the professors’ brethren: experts. When you have two so-called experts testify under oath that a feature consists of two completely different things it make the job of the fact fonder more akin to rolling dice than reasoned analysis. You want a strong parent system-regulate experts. Make them disclose all financial interests.

  2. The professors are concerned about nameless faceless plaintiff companies bringing patent suits. But is the rule also applicable to IBM and Microsoft? Other cases? Will these large companies, in their filing documents, reveal all the shareholders, stakeholders, and other insiders who will benefit (for example, the managers who get promotions) from the company on account of the suit? What is the reason for the so-called disclosure requirement? What if I put in all the names in the phone book and say somehow these persons benefit from the invention, because if I win the patent suit, some of the winnings will go the local bar, brewery and pizza place and coffee shop etc and therefore they all benefit in one way or another? What is the legal basis for this new requirement, and do they really want to shame someone for filing a suit against an infringer? And what about a shareholder/stakeholder’s right to privacy? As long as they are not witnesses, there is no reason to disclose them. Do they also have to name their spouses and children because they may benefit also?

  3. The professors do not want “end users” to be sued. But suing users of technology versus makers/sellers etc is a direct result of two things (a) vapid damages theories and (b) patent exhaustion theory. Suppose I patent a widget. The manufacturer is, of course, in China, and therefore I cannot sue him. The importer is likely a fly-by-night operator and so it is unwise to chase him. The retailer makes 50% markup and the end-user gets 100% productivity increase by using the widget in his business. Where is the most money to make? The same place that derives the most value from the infringement: the end user. Economically speaking, the end-user derives the most value from the invention by actually putting it to practice in a productive endeavor. The professors, “economists” that they are, want to protect the end user on the ground that he is simply the “innocent” party. But the professors should know (after all they allege this) from their teaching of the law that patent infringement is a strict liability tort and does not require knowledge or intent to infringe. The so-called innocent end user, being a participant in the market, will learn from the suit and start to protect himself from future suits by (a) seeking indemnification from the seller or refusing to buy the product, or (b) buying infringement insurance just as he buys worker’s compensation and general liability insurance for other acts/omissions. What is the big deal in this thing? Why is patent infringement any different tort that needs special protection to a person who derives the most benefit from the violation? By going down the stream of commerce, the lower rungs levels make the most benefit from the innovation. It is fair to go to that source of value rather than exhaust yourself by getting an unenforceable judgment against a Chinese manufacturer.

  4. Question: is there any serious doubt that a patent infringement action is entitled to a right to a trial by jury? I quote from Markman v. Westview at 377:”As to the first issue, going to the character of the cause of action, “[t]he form of our analysis is familiar. `First we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity.’ ” Granfinanciera, S. A. v. Nordberg, 492 U. S. 33, 42 (1989) (citation omitted). Equally familiar is the descent of today’s patent infringement action from the infringement actions tried at law in the 18th century, and there is no dispute that infringement cases today must be tried to a jury, as their predecessors were more than two centuries ago. See, e. g., Bramah v. Hardcastle, 1 Carp. P. C. 168 (K. B. 1789).”517 US, at 377.Next, is there any doubt that the validity of the patent was also tried in the courts of England prior to 1790? Again, from Markman:”Although by 1791 more than a century had passed since the enactment of the Statute of Monopolies, which provided 381*381 that the validity of any monopoly should be determined in accordance with the common law, patent litigation had remained within the jurisdiction of the Privy Council until 1752 and hence without the option of a jury trial. E. Walterscheid, Early Evolution of the United States Patent Law: Antecedents (Part 3), 77 J. Pat. & Tm. Off. Soc. 771, 771-776 (1995).”517 US, at 380.Is there then a 7th Amendment right to a jury trial for validity in infringement cases where there is a 7th Amendment right (i.e., damages are requested)?

  5. Corporatists have a new villain: “functional claiming”. Though this has been permitted for a while, Mark Lemley started distorting things and arguing that the patentees are obtaining patents on problems and not solutions. This is a load of nonsense because identifying the nature of a problem could be innovation, and the doctrine of equivalents prevents the infringers from trivial changes to the invention and argue that they do not literally infringe. Moreover, there is no requirement that all possible embodiments must be disclosed to give “notice” of an invention. Therefore the whole idea propagated by Mr. Lemley et al in the name of “functional” claiming is without theoretical basis. That does not stop him from writing tomes on what he thinks is patenting a problem and not a solution. When we look at what his acolytes are doing, it is simply marvelous. Every possible area of patent law is being tweaked in favor of infringers. Every notion of fair play is being trashed. These are the same people who complain when their tricks boomerang. So, if I cannot claim broadly, can I use a hundred claims to capture all the possible embodiments? Then they complain that the patentee is using too many claims to impose costs on the defendants. Patent assertion entities may not be the best thing, but the Newegg loss against Spangenberg shows that the juries are wise enough to see through the maze of false propaganda and focus on the only issues: whether the patent is valid and infringed.

      1. Ned, Lemley’s vanity article was referenced on this blog. Moreover, the core of the lie is that functional claiming should NOT be construed by one skilled in the art. That is what Lemley is arguing.Information processing persons skilled in the art use functional language to describe a well understood set of solutions.So, the question should be does the functional claims set a clear boundary understood by one skilled in the art. And, the answer is yes. Lemley’s vanity paper is outrageous.And, just look at the way software is described or spec’ed out. FUNCTIONALLY. And, the solutions are well known by one skilled in the art.Lemley will surely go down in history as one of the greatest destroyers of patent system. R Stern will be the other one. And, not by applying the law or making legal arguments but by misrepresentations.

        1. Night, I think Mark confuses functional claiming with method claiming. A lot of programmed computer claims are claimed as a series of steps. They are equivalent to method claims, and so long as that is understood, they should be treated as method claims.A functional claim in contrast is functional at the point of novelty. That is a whole different kettle of fish. To the extent Lemley does not keep these distinctions in mind, he is way off base.

          1. Ned, point of novelty is Europe. We evaluate a claim as a whole. Further, the question is does the functional claiming convey structure and the answer is clearly yes.

            1. Ned I know Haliburton very well. So, tell me how it applies to functional claiming? The holding in Haliburton was that for public policy reasons a method for carrying out a scientific process should not be eligible so that other machines may be manufactured for competition. The public policy reasons for Haliburton no longer apply. Haliburton is an example of an extreme case where the SCOTUS has used its power of judicial exception to try and write public laws. Haliburton should be expressly over turned or fairly construed to apply to a time when the design of the machine was more important than the design of the method. The technical environment of Haliburton is no longer applicable to modern technology.Ned, really, your biases are outrageous. Lemley’s paper on functional claiming is laughable. What is clear is that by not policing the law journals is that they have turned into vanity publications by the popular professors who use them to become popular and rich. Scholarship has nothing to do with modern law journals. It is shameful.Furthermore, stop playing psychotic games. The question is simple. Take a functional claim. Does it convey to one skilled in the art a definite set of solutions. The answer for information processing is clearly yes. Just read a book on software specification. How do you think they spec out software—with functional descriptions.So read that paragraph above anyone on this board and try to tell me it isn’t true. All this nonsense comes down to that one paragraph above. And policing scope is simple. We have a case for that. Do you know which case Ned? Shameful. Lemley knows this. Lemley knowingly misrepresents facts and the law. You read the paragraph above Ned and tell me that I am wrong.You know, Ned, you have a long career where you were once respected. Is it really worth giving up your integrity? You know what’s going on.

            2. Obviously, you read the 9th Cir. case on the method. The case I reference is the SC case, at 329 US 1.The SC case stands for the simple proposition that one cannot literally claim something that one did not invent.Question to you, Night, do you seriously dispute that one cannot get a patent on something that one did not invent?

            3. I read the SCOTUS case. It stands for the simple proposition that for public policy reasons the SCOTUS decided to not grant a patent for an invention.Seriously Ned. They say they don’t want to grant a patent on the method for public policy reasons of encouraging additional machine implementations of the method and to promote competition.

            4. And, please respond to my one paragraph regarding functional claiming. Do you dispute that one skilled in the art understands a clear set of solutions that are defined by functional claiming? Why do you people think that it is ok to ignore reality? Go to the technology. It is outrageous to fabricate a reality that is devoid of the actual technology. Go to google scholar. Type in software specification and read a respectable book. Type in software structure and tell me that software doesn’t define a structure and a machine. it does.That is the reality of the science/technology.

            5. Ned, Dennis apparently didn’t like my last response to you. The short of it: I was referring to the SCOTUS case as you know. Ned the holding of Haliburton is that for public policy reasons the SCOTUS took away a patent.

        1. Thanks for the links.Lemley refers to the Halliburton case that held a claim functional at the point of novelty indefinite. Lemley’s discussion of the law seems to omit this nuance.

    1. Anonymous, do you or do you not share the view that a patent should cover no more that what is disclosed and equivalents?

      1. The law appears to be that a patent covers everything reasonably contemplated by a “person of ordinary skill in the art” as coming under the rubric of the claim language. Now, what this covers need not be the only thing disclosed in a patent application. The doctrine of equivalents is there to capture future modifications to technology that essentially cover the subject matter of the claims. So, in answer to your question, there is a line but the line is to be determined by a jury and not by theoreticians who propagate the view that all equivalents must be excluded. One off cases should not be used as examples to create new restrictions, but that is what Mr. Lemley argues. He takes an extreme example that is probably controlled (or should have been controlled) by Rule 11, and argues that the entire law should be changed to accommodate the corporate infringers.The jury has shown in the recent Newegg case that Jones patent on encryption covers something practiced by Newegg’s structure. That is the best way to sort out these type of things. Barring all equivalents in the name of functional claiming does disservice to the patentee.

        1. Let me ask the question a different way: Suppose the claim literally covers a way of accomplishing something that is not the equivalent of the disclosure? Consider, I invent a screw and the prior art is a nail. I claim “apparatus to attach … ” Arguably, the claim reads on the prior art. The result is clear.Now consider a modified claim to distinguish the nail: “threaded apparatus to attach ….” The claim literally covers a threaded bolt/nut combination, but clearly the presence of the thread is not the invention. It is the use of the thread to attach… The bolt/nut combination is not an equivalent of a screw.So what then do we say about such a claim? Do we construe it to cover the screw and equivalents? Do we construe it to cover the bolt/nut? If the latter, is there anything at all wrong with the claim?

          1. This example assumes that the inventor of screw did not also contemplate the bolt or that the bolt/nut combination is something radically different from the screw. As claimed in your example, the claim makes perfect sense because a screw is in fact a “threaded apparatus to attach”, and the screw is different from the nail only in that the screw has a thread in addition to a nail. Therefore every threaded apparatus that can attach comes under the claim, including a bolt/nut combination because the female of the combination (bolt) has thread-acceptance-part running in the hole. I would see the bolt/nut as adding an additional element to a claim.So, therefore, nail – element A (does not have a thread).screw – element A + B (nail with thread)bolt/nut – element A + B + C.Viewed this way, a claim for screw is infringed by a claim for bolt/nut, even though the bolt/nut combination is independently patentable and more versatile.

            1. Anonymous, excellent reply. Adding additional feature does not remove infringement, if the bolt sans nut actually did an attachment function with the thread.But, I will assume that this is not the case for this argument. The thread on the bolt does nothing as it extends substantially beyond item being attached the hole diameter is designed such that the thread do not engage the walls of the hole.Here, there is no doubt that a bolt/nut is not the equivalent of the screw.What then? Is the claim invalid or its there infringement because the claim literally reads on the bolt/nut?

            2. Still it infringes. The claim is to a threaded apparatus that attaches. You are merely changing the thing to which the screw attaches, instead of the board, now the bolt. The bolt and nut combination is nothing more than a screw driven into a wooden board, with the wooden board providing the friction to the threaded part so as to hold the screw in position along with something else that can be held together. No matter what you can do with the bolt, the bolt itself is infringing without the nut for this reason. The bolt is the screw to which the claim is drawn.

            3. OK. Then in order to avoid such infringement, should we construe the claim to cover the screw and equivalents in the first place, or simply hold the claim invalid as indefinite?

            4. The claim is not invalid because (we assume) there is no prior art. It is not indefinite because the claim is an apt description of the invention–the screw. The bolt/nut manufacturer owes royalties to the screw patentee. There appears no way to “avoid infringement” under these circumstances.

            5. Anonymous, I set this example up to show that claims can and often do literally cover non equivalents of disclosed embodiments. Under controlling SC precedent, a patent can only cover what is disclosed and equivalents, because, as a constitutional matter, broader coverage covers the independent inventions of others and THAT retards the progress in the useful arts.The Supremes in Graver Tank suggested using the so-called reverse doctrine of equivalents, citing Westinghouse. But that case is the case cited by Rich for 112, p.6, now 112(f), where claims are construed to cover the corresponding structure and equivalents.Drafting claims is imprecise. We should do our best to capture the invention. If we go too far, and it is facially so, the claim should be invalid under 112, p. 1 and p. 2. If it is not facially invalid, we should still construe the claims such that they cover no more than the corresponding structure and equivalents.

            6. I agree that claim drafting is imprecise. However, the language of the claim is what determines its scope. For example if the patentee claims too broadly as to cover other things, then he runs the risk of having prior art to invalidate the claims. On the other hand, he may also benefit from broad coverage if there is no invalidating prior art. To say that a claim is limited to the disclosed embodiments is not the law. Only when means-plus-function claims are involved a court will look to a “structure” in the specification to see if there is an embodiment that covers the claimed function. I do not see that if I disclose one structure (screw in your example) I am therefore limited to the screw and cannot sue the maker/user/seller of the bolt from your example. The latter is captured by the doctrine of equivalents. The claim is drafted in the means-plus-function with at least one identified structure to support the claim to overcome the 112(f) requirement. But to argue from this that the DOE is not applicable to such claims is not what Graver Tank says.

            7. Anonymous, the operating assumption here is that the bolt/nut is not the equivalent of the screw. If it was, I have no problem. The claim scope defines over the prior art and does not literally cover non equivalents.As to what the law is, you might want to read the often cited O’Reilly v. Morse on claim scope. If the claim literally covers the independent inventions of others, it is void: “In either case he must describe the manner and process … and the end it accomplishes. And any one may lawfully accomplish the same end without infringing the patent, if he uses means substantially different from those described.”56 US at 119.Compare Graver here,”Thus, where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat the patentee’s action for infringement. Westinghouse v. Boyden Power Brake Co., 170 U. S. 537, 568.”Also, Halliburton, here,”Had Walker accurately described the machine he claims to have invented, he would have had no such broad rights to bar the use of all devices now or hereafter known which could accent waves. For had he accurately described the resonator together with the Lehr and Wyatt apparatus, and sued for infringement, charging the use of something else used in combination to accent the waves, the alleged infringer could have prevailed if the substituted device (1) performed a substantially different function; (2) was not known at the date of Walker’s patent as a proper substitute for the resonator; or (3) had been actually invented after the date of the patent. Fuller v.Yentzer, supra, at 296-97; Gill v. Wells, supra, at 29. Certainly, if we are to be consistent with Rev. Stat. 4888, a patentee cannot obtain greater coverage by failing to describe his invention than by describing it as the statute commands.”These Supreme Court cases state the law. They are all uniform that the scope of a patent ultimately cannot extend by equivalents of the disclosure. Claim claiming beyond that scope may be valid if construed to cover the disclosure and equivalents. If not, they are invalid.

  6. ‘Professor Love of Santa Clara and is also signed by Professors Bessen,Goldman, Ghosh, Lemley, Meurer, Samuelson, Sprigman, and others’As in Love’s bio, it is common for profs to moonlight for industry. In this case he and the others have one thing in common -the word on the street is they all are paid puppets for some of the world biggest invention thieves.Just because they call it patent “reform” doesn’t mean it is.All this patent ‘reform’ talk is mere dissembling by China, huge multinational thieves and their paid puppets -some masquerading as reporters, some in Congress, the White House and elsewhere in the federal government. They have already damaged the American patent system so that property rights are teetering on lawlessness. Simply put, their intent is to legalize theft -to twist and weaken the patent system so it can only be used by them and no one else. Then they can steal at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED. Meanwhile, the huge multinationals ship more and more American jobs to China and elsewhere overseas.Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.Most important for America is what the patent system does for America’s economy. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they included inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity and the jobs the commercialization of those inventions bring. For 200 years the patent system has not only fueled the American economy, but the world’s. If we weaken the patent system we force inventors underground like Stradivarius and in turn weaken our economy and job creation. For a robust economy America depends on a strong patent system accessible to all -large and small, not the watered down weak system the large multinationals and China are foisting on America.For the truth, please see http://www.truereform.piausa.olink to facebook.comlink to piausa.wordpress.comlink to cpip.gmu.edu

  7. DennisI’m amazed that this group would put this kind of ethically challenged statement in writing:”…In closing, we also wish to stress that as scholars and researchers we have no direct financial stake in the outcome of legislative efforts to reform our patent laws. We do not write on behalf of any specific industry or trade association. Rather, we are motivated solely by our own convictions informed by years of study and research that the above proposals will on net advance the best interests of our country as a whole. We urge you to enact them.”Wow, they are just disinterested “scholars” looking out for the best interests of the country. How benevolent! Note the multiple obfuscations here: “no DIRECT financial stake…” and “WE” are not writing on behalf of any group, but leaving the obvious escape hatch they each individually represent one or more large corporate infringers or anti-patent entities.

    1. Just for amusement value, I thought I’d start to check out the list. To not be biased, I simply started at the top, using the first name, in alphabetic order. So here’s Prof Allison’s bio, the first unbiased, disinterested “scholar and researcher” on the list:John R. Allison – The University of Texas at Austin, McCombs School of Business link to mccombs.utexas.edu…You can’t surf the Internet without tripping over one of Prof Allison’s many pro-large corporate “studies” demonizing patent owners and PAEs. He was apparently sponsored recently to conduct an “independent” survey like this most recent gem for the Korean Semiconductor Industry association, which, predictably complains that people with patents frequently sue …his clients.link to ftc.gov…”…In line with the increased scholarly focus on the impact of PAE activity on high technology industries in particular, the KSIA commissioned in 2011 a third-party study to address the effects of NPE patent litigation on the semiconductor industry specifically. This study was conducted by Dr. John R. Allison… the author of several previous landmark studies on the impact of patent litigation on certain high technology sectors.”I guess putting down “high paid consultant supporting large Korean company infringers” as an affiliation (instead of “scholar and researcher” at UT wouldn’t have been quite as …. impressive? Who wants to do the next person on the list? I’m willing to do the lot if necessary, but we should crowdsource the expose of these anti-patent charlatans posing as disinterested academics.

      1. Lots of sleight of hand in the letter itself.Note that while our founding fathers wanted the US patent system to encompass what as only lately been denigrated as “Trolls,” (see the award winning journalism mentioned at link to patentdocs.org… ), the professors here only reference the theoretical possibility that “Trolls” may do some good. – this in addition to the previous point that the so-called ‘Trolls’ bust patent thickets.

      2. Day 2, here’s the second person on the list:Professor Clark – D. Asay Penn State University Dickinson School of Law Bio is here: link to linkedin.com. – Pedigree includes stint at large marquee firm (WSGR) relied on regularly by large anti-patent entities looking for the most expensive defense they can find Mostly known for his sympathies and support of the FSF and FOSS crowds whining about software patents and how evil they are:link to outercurve.org…”…True, the AIA fell short of software patent opponents’ ultimate desire to banish softwarepatents altogether. But it did provide an enhanced avenue for FOSS communities to prove what they’ve been claiming for years: that many software patents should not be granted.” Clearly someone again who represents and advocates anti-patent interests, not some objective disinterested “scholar and researcher” who suddenly decided his conscience required him to take a stand against patent owners for the good of the country.

        1. Clearly someone again who represents and advocates anti-patent interests, not some objective disinterested “scholar and researcher” who suddenly decided his conscience required him to take a stand against patent owners for the good of the country.You’re accusing him of being consistent in his opinion, and you’re implying that his conscience has been requiring him to hold his views for some time now. Quite the revelation, since the letter states that these people are “motivated solely by our own convictions informed by years of study and research”.Could you please explain why you think that’s a bad thing?

          1. I think if you re-read my last sentence, you will note I say exactly the opposite: he is just another paid mouthpiece, not a conscientious objector.

  8. John R. AllisonThe Universityof Texas at Austin, McCombs School of Business link to mccombs.utexas.edu…Lex Machina,private company selling subscriptions to large corporate infringers. Dennis-Honestly, I’m amazed these folks would put ethically challenged statements like these in writing:”…we also wish to stress that as scholars and researchers we have no direct financial stake in the outcome of legislative efforts to reform our patent laws. We do not write on behalf of any specific industry or trade association. Rather, we are motivated solely by our own convictions informed by years of study and research that the above proposals will on net advance the best interests of our country as a whole.”This carefully written sleight of hand tries to convey the impression that these are all disinterested “scholars” who are simply looking at the best interests of the country. Awww – how … benevolent! Note the obfuscation about “WE” (the collective group) not writing “on behalf” of anyone, while leaving open the escape hatch that of course EACH of them individually represents multiple large scale corporate infringers.

  9. Good comments from Dennis and commenter(s). The issue of the possible antitrust and/or fair trade implications of the way that some NPEs operate is of great interest to many, and may provide a way to challenge some of the more egregious behaviors. I have pointed out some of those issues in a previous guest column in Patently-O, particularity the question of whether the behaviors of NPEs should be evaluated in terms of whether they support or deter accomplishing the goals of the patent system.A link to that article is :link to patentlyo.com

  10. Dennis: Regarding customer lawsuits, we have a difficulty in line drawing because, for the most part, these are not simply customer lawsuits. Rather, the patents being asserted cover particular methods or systems that take advantage of a particular device on-the-market (such as a wireless router or flat-panel television)And let’s just pause for a moment and ask the obvious question: what in the heck is going on when people are being sued for using a wireless router or flat-panel television that they bought?If we consider for a moment (as the patent trolls love to do) how things might have been in, say, Edison’s day, we basically have a system where the PTO is spewing out patents (typically filed by people who have zero intent on producing anything other than a lawsuit or the threat of one) that cover methods of manually turning on the lightbulb for different purposes (e.g., the sun has set!; illuminate this paper with available real estate on it! if the light turns off as you come up the steps, you’ve been defriended! the light shines on the highest ranked pie in the contest! the light reminds you that you need to renew your subscription to Horse Drawn Carriage Digest! etc etc).Of course part of the problem is the junk patents. The other part of the problem is the people who won’t get a life and insist that filing and asserting this junk is “normal” or “necessary.” You know, those people who already have plenty of money and just want more.

    1. Malcolm, more than any other, the following cases are the reason we have junk patents:1. Donaldson;2. State Street Bank; and3. Bilski – Supreme Court overruling the MOT as the exclusive testThen we have the likes of IBM and Microsoft pushing software patents where the novelty is abstract.

      1. “Then we have the likes of IBM and Microsoft pushing software patents where the novelty is abstract.”If you want to play with the big boys you gotta come prepared.

        1. tell me how we create new natural laws every time we write instructions for a computer.Sounds almost as silly as creating new computers every time we write instructions for a computer.

          1. INANE, If you understood the art field, or if you understood the law, you would realize just how silly your attempt is with “new computers.”You don’t, so (very likely), you don’t. And we have to suffer as you take yet another Calvinball face spike.

    2. *If we consider for a moment (as the patent trolls love to do) how things might have been in, say, Edison’s day, we basically have a system where the PTO is spewing out patents (typically filed by people who have zero intent on producing anything other than a lawsuit or the threat of one) that cover methods of manually turning on the lightbulb for different purposes (e.g., the sun has set!; illuminate this paper with available real estate on it! if the light turns off as you come up the steps, you’ve been defriended! the light shines on the highest ranked pie in the contest! the light reminds you that you need to renew your subscription to Horse Drawn Carriage Digest! etc etc).*A very good summary of the kind of patent we so often see in litigation nowadays.

  11. Want to reduce costs? Limit time. Limit scope.We could impose a statutory limit on time from filing to judgment. We could limit the number of patents per case to one. We could limit the number of claims to 3, with no dependent claims being assertable unless all the independent claims are held invalid on summary judgment. Res Judicata will not extent to non asserted claims.We could limit the number of claim terms construed to 5. We could limit the number of references to 10.As always, these limits could be adjusted by a court in the interests of justice.

  12. Just a note, but one of the reasons that the likes of Spangenberg are filing suit rather than negotiating first may have to do with IPRs. The filing of the suit starts a clock running – an IPR has to be filed within the year.

  13. The problem with professors is that they lack any practical understanding about how patent cases are actually litigated. The most naive thing that’s said here is the idea that “courts begin to stay suits filed against parties that simply sell or use allegedly infringing technology until after the conclusion of parallel litigation between the patentee and the technology’s manufacturer.”Idiots. As things stand today, in the technology sector, it is RARE that manufacturers are named in suits against customers. Most of the NPE suits today are simply against the end-product manufacturer, and the NPE is usually very reluctant to name the manufacturer. Lots of reasons for this. This is, in part, a reaction to the Supreme Court’s decision in LG v. Quanta, expanding the scope of the patent “exhaustion” doctrine. When you sue a component manufacturer, you stand the chance that any judgment against it will have downstream exhaustion effects on its customers. But it is also motivated by concerns about proving damages. When you sue the manufacturer, the royalty base for any damages award is the price of the infringing component, which is typically small. NPEs would rather sue the end product manufacturer, and claim a percentage of the revenue associated with the larger product. If your product is a WIFI chip or a Bluetooth controller, for example, would you rather collect a royalty on the sale of the component (which is usually under $10), or a royalty on the sale of the laptop ($1000+)?? And finally, why sue the manufacturer? They are financially capable of defending themselves and are unlikely to easily settle, while the customers are small and, quite often, financially unstable and more likely to offer quick settlements in their desperate attempt to get out of the suit. In many cases, these forces are so strong that NPEs adamantly refuse to sue the manufacturers, who are forced to file their own DJ complaints or intervene in the suit.The world is far better for customers accused of infringement when the manufacturer is also sued. There are, unfortunately, already enough barriers to this happening. The proposal here, staying a patent suit against the customer in favor of the manufacturer, will simply present yet another barrier preventing them from happening and making it even more rare.

    1. Lode_Runner, I agree that firms that buy components to be used in making larger apparatus or to be used in larger systems or in processes need to be separately sued. The value of the use varies by the use, and any suit against the manufacturer will not properly account for these differences yet such a suit may foreclose subsequent suits under Quanta. However, I don’t think the proposal is intended to address this situation.What I think the proposal is attempting to address is the “end-user” who does not use the product in a larger, system; and innocent retailers who do no more than simply resell the product of the manufacturer.I personally don’t see how damages issue is affected here justifying the focus on the manufacturer.

      1. “innocent”?Infringement is still infringement Ned.Last I checked the law still said:”whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”Let’s squelch the “innocent” dustcloud right away.

        1. Let’s squelch the “innocent” dustcloud right awayAnother great talking point that is sure to win points for the patent trolls and their beloved cheerleaders. Please keep up the great work, TB!

          1. Malcolm,Posts of yours that do nothing more than vacuously call others names are really not appropriate.Kindly attempt to make a point (I mean, besides that you can be a douchebag), or STFU.Thanks.

            1. Kindly attempt to make a pointI made my point very clearly, TB, and there was nothing vacuous about. You can take your Patent Jeebus halo and go home now. Or do you want me to make my point again so you can understand it? Maybe I should use bold letters and caps like you do (in lieu of your crayons, no doubt). Let me know. Happy to oblige you, at the moment. That may change, of course. Oh wait, it just did. You better go find a donut and do your usual thing.

            2. Uh, just so you know, you’ve now forfeited any right you might have had to constantly whine about me politely suggesting that you “shut up already” about 2 years ago.

            3. LOL – wrong yet again Leopold.You are doing that red cape thing again.There is a world of difference between my asking Malcolm to make a point and your telling the wrong people to just shut up.(hint: it has to do with your perpetual lack of ability to understand what ‘the wrong people’ means and why). My calling you out for telling the wrong people to ‘just shut up’ was not merely you telling someone to ‘just shut up,’ it was that you were telling only one side – and the wrong side – to just shut up. Hence – not only do I not forfeit anything – your smarmy ‘oh I get to try to diss anon’ trips you up. You need to think before you post my friend.And in the instant case, perhaps you would like to chime in on the law (as I provided) versus the nonsense that Malcolm provided. Do you think the law has changed? Do you think there is such a thing as ‘innocent infringement?’ Do you think (as the 60 professors appear to think) that the excuse of not knowing the law is good enough to excuse breaking the law? (the 60 professors of law ought to be rightfully embarrassed about that).

            4. The strategy of the Palin boys is to soil posts that they don’t agree with. That flood the board with responses to kick up dust. Dennis really should find a way to control this.

      2. > What I think the proposal is attempting to address > is the “end-user” who does not use the product in> a larger, system; and innocent retailers who do no> more than simply resell the product of the> manufacturer.I think that’s the intention, but I am not sure such a line can so easily be drawn. If the proposal was designed to deal with the “scanner troll” problem, i.e., the troll who bulk mailed thousands of demand letters to any company that used some standard piece of office equipment, I doubt the statute will have any impact because those demands rarely result in suit even if the targets ignore the letter. My concern is that any attempt to distinguish the “end customer” from “customer” is illusory at best. Other than stand-alone office equipment, there is almost nothing you can buy these days, tech-wise, that is not used “in a larger system,” to use your words. Most every technology component you can buy today, whether it’s a printer, optical disc drive, network component, display, even things like iPads, can be purchased separately and are designed as part of a larger integrated system. The era of stand-alone things like fax machines, copiers, etc., is long over. In the end, my concern is that the world’s a much better place for the patent system when the actual manufacturer of the component, product, etc., is involved in the suit. A proposal to avoid the overhyped scanner-troll problem is a bad idea if its unintended consequence will be to further discourage the naming of manufacturers in infringement suits.

    2. Most of the NPE suits today are simply against the end-product manufacturer, and the NPE is usually very reluctant to name the manufacturer. Lots of reasons for this. This is, in part, a reaction to the Supreme Court’s decision in LG v. Quanta, expanding the scope of the patent “exhaustion” doctrine.There it is again. Patent troll behavior is not the fault of patent trolls — the Supreme Court made us do it!Like the only thing in the world these people know how to do is prosecute junk, identify junk, and sue people with it.why sue the manufacturer? They are financially capable of defending themselves and are unlikely to easily settle, while the customers are small and, quite often, financially unstable and more likely to offer quick settlements in their desperate attempt to get out of the suit.Right. Why would you risk your life trying to kill and eat an adult elephant when that little baby is so juicy and helpless? You can’t blame patent trolls for making these easy decisions. But you can blame everyone else.

  14. Dennis: I bristle at the letter’s … overt stance that is pro-large-corporate-entityI don’t see anything in the letter that discusses the “pro-large-corporate-entity” stance of any the letter-writers. I do see something in your statement, however, that suggests you are buying into the rhetoric of the hardcore troll defenders who are, pretty much to a person, self-interested shills very much invested in the game.The issue of patent trolls asserting junk patents has very little do with the size or corporate status of the “entity” (or entities) being targeted. Rather, it has everything to do with the amount of money that the troll perceives can be made by targetting that entity or entities.The troll defenders bring up “large corporations” and accuse those seeking reform of the patent system of being “in league” with those corporations for two reasons: (1) large corporations tend to have more money (see preceding paragraph) and (2) there is a pre-existing “bias” against “large corporations” that the trolls like to use. They love painting themselves as “little guys”, fighting against those big bad corporations that so many people are suspicious of (and justifiably so — I’m extremely wary of them as well and can provide you with a long, long list of non-patent related reforms which would make those large corporations and the patent trolls who prey on them very sad indeed). Maybe long ago there was truth to the “Robin Hood” myth that the patent trolls love to tell everyone. Maybe there’s a little bit of truth to that now, buried somewhere in the data that is being collected. But from what I can see all these patent trolls are in the top 5% of the wealthiest Americans already, which means they are some of the richest people in the world. The bottom line is the patent trolls and their defenders really need to get over themselves. Everybody knows what’s going on: the patent system is broken, it’s largely due to some very bad court decisions that open the floodgates to patenting junk that either never should have been eligible for patenting or, to the extent is eligible, should be claimed far more narrowly, and the trolls and their fake “little guy” cheerleaders are exploiting that broken-ness for all it’s worth.Of course, banning software and business patents is touching the third rail for the patent trolls. Gee, I wonder why? It couldn’t be because that’s the lowest hanging fruit and the easiest, most broken part of the patent system to abuse, is it? Such that pretty much anyone with a modest understanding of patent law can get in there and become a player, a little “Spangenberg, Jr.”, if you will? Nah. It couldn’t be that. It must be because they really believe that without software and business method patents America will turn into a third world country. Yeah. That’s it. Sure. Do you believe that, Dennis?

    1. “buying into the rhetoric…The issue of patent trolls asserting junk patents”.LOL – talk about buying into the rhetoric…Look what you are selling..You are forgetting the fact Iong ago that I shared with you – Peter Zura’s 271 Blog study showing that the so-called “Patent Trolls” are more likely to go after and buy quality patents than your so-called wholesale labeling of ‘junk patents.’ That the so-called ‘junk patents’ are actually more likely pursued by practicing entities in order to build their armageddon war chest for that “delicate balance that the 60 Professor throng want to return to (because that game nullified the advantage of the small actor with a single critical advance).That you use the name-calling denigration (remember who coined the pejorative first – and why – hint: it was not for the benefit of the public) reveals the man behind the curtain. This is merely the latest chapter in your pogrom against business method and software patents.Nothing more.(of course, Malcolm’s response is the Oh So Very Carroll, ‘you are wrong’ – ignoring the fact that it was not me that did the Zura study [a typical Malcolm spin of inconvenient facts], and also ignoring the fact that it very much matters who coined the term – and why – Malcolm sticking his head in the ground in an attempt to ignore this context is most telling)

      1. Peter Zura’s 271 Blog studyWhat part of this “study” convinced you that patent trolls don’t pursue junk patents and assert them against whoever they can be asserted against for profit? You’re right that I’d forgotten about it. Wrong about everything else, though.remember who coined the pejorativeIt doesn’t matter who “coined the pejorative”, TB. The pejorative fits. And really it’s not about “ownership” of junk patents (or any other patents). It’s about bottom feeders who exploit the patent system for their personal gain, while they themselves are producing nothing except lawsuits. Junky patents that should never have issued are certainly a key problem, but they’re not the only problem.I’m glad you seem interested in reforms that target the power of large corporations in our country, however. Perhaps you can share your thoughts on that subject further, e.g., let us know what non-patent reforms you have in mind to check the power and influence of large corporations in America. I’m sure you have some interesting thoughts, perhaps some involving your beloved Constitution.

  15. How about charging attorney’s fees to those who bring DJ actions in bad faith or assert defenses or claim construction arguments that do not meet the smell test? The fee shfting rule should be both ways. Notice how the defense trolls are asking for only the patentee to pay for infringer’s costs and fees but not the other way.How about also demanding that the defense lawyers have a fee-cap so that their maximum hourly fee is no more than $250-$350, that they cannot have six lawyers preparing for depositions where only one would be sufficient, and that they cannot increase the cost of the litigation by out-papering the patentee. In fact, these are commonsense reforms because the marketplace (e.g., large infringers such as Microsoft) is already imposing these terms on the defense bar. If the defense lawyers have the opportunity to impose costs on patentees without a reciprocal imposition on themselves, they have every incentive to rake up bills by putting a B.A. (political science) lawyer to review complex semiconductor documents and incur costs. Lemley is a corporate hack and he should be exposed. He has been driving the so-called reform express for a long time. He and his ideas resulted in sue-first-and-ask-questions-later strategy (Declaratory Judgment jurisdiction), thereby removing any incentive to negotiate a settlement. He and his cohorts also caused patentees go to the end-users by their creative arguments on divided infringement. They do not understand that their actions result in equal and opposite reaction. Stealing by infringers necessarily will result in enforcers entering the fray. The defense bar’s abusive tactics are the real reason for the rise of Spangenbergs of the world. They refused to negotiate with an inventor, who then turned to the enforcers. Same thing will happen in a neighborhood–if you refuse to pay me, I will turn to the street thug and have him collect for me.

    1. “Same thing will happen in a neighborhood–if you refuse to pay me, I will turn to the street thug and have him collect for me.”Is there any chance that this last statement is more revealing than you intended?

      1. The origins of private enforcers have something to do with the legal system corrupted by the insiders. Is that not what IPNav’s greatest marketing plan? I have worked for (alleged) infringers and they first look at the financial capacity of the sole inventor or small firm that brought the suit. Then they decide to file paper after paper on silly issues and attack the patentee with all kinds of fraud on the PTO etc without any basis. (Therasense took care of that nonsense) These abusive tactics, and refusal to sit down and discuss amicable settlement, are the real reasons for the escalation of costs. The same thing is done in non-patent tort cases. A patentee who is disrespected and abused has no place to go but to a Spangenberg for “justice.” That is how it appears to be happening.

        1. A patentee who is disrespected and abused”BOO HOO HOOHOOOOOHOOO HOOOOO!!!!!Seriously, you guys are unbelievable. “Disrespected and abused”? The big bad old company just wouldn’t roll over and hand me the $50,000 that I was asking for because the PTO rubber stamped my patent on sending me a reminder email that my Netflix queue needed to be updated? So now you can’t build that addition on your house in San Diego? Oh, that sounds so sad. You know, it’s just like someone who’s child was killed because McDonald’s hired a felon who had been convicted ten times before of putting a razor blade in food that he was serving. I’m glad you helped put this in perspective for everyone. Spangenberg is a saint, really. Without him, America will just revert to an agrarian economy, I suppose, because nobody will innovate anymore. Isn’t that how the story ends?

          1. MM, you can be such an idiot at times. I suppose that if you actually practiced, you would have more intelligent (and far less frequent) commentary.

            1. MM, you can be such an idiot at times.I apologize if my comments don’t seem “intelligent” enough for you. It’d be nice, though, if you could explain exactly where an error was made so I can avoid making the same mistake again.

            2. “if you could explain exactly where an error was made so I can avoid making the same mistake again.”LOL.No wait,LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOLahh,Now, you were saying?

            3. You and I both know that your problem is with patents that you think are crap. I agree with the vast majority of your assessments on patent quality. Your added hyperbole serves only to distract from, and obfuscate, the potential value in your post.

          2. Malcolm, what do you think of the argument being advanced by some of the big boys that enforcing patents of startups against big companies retards the progress in the useful arts?

            1. enforcing patents of startups against big companies retards the progress in the useful artsI don’t see how anybody can seriously take that position (or take that position seriously) post-eBay.

            2. They also say that they, the big companies, create technology and allowing patent suits against them is a tax on the creation of technology.It goes on and on just like that.The underlying assumption is that the patents of the small fry either are not valid or shouldn’t cover the high tech inventions of the big boys. After all, they contend, they did not copy anything from the small fry.Malcolm says things like this all the time. He assumes the little guy did not invent anything and the proof of that is that the big boys did not copy but independently invented.

            3. Malcolm says things like this all the time.Things “like this”? What is that supposed to mean? He assumes the little guy did not invent anythingNot at all.the proof of that is that the big boys did not copy but independently invented.The “proof” of “independent invention” is typically that the “little guy” (1) had a junk patent that either wasn’t invented by the little guy or was something obvious that nobody should be surprised was independently invented and/or (2) that the “little guys” “genius” “fundamental contribution” to the field was utterly ignored by everyone interested in the field until the lawsuit and it begs credulity to imagine there was some conspiracy among all the alleged infringers (and historians) to pretend that the “little guy” didn’t exist.

            4. Malcolm, you and I will agree that junk patents are a problem. But there are legitimate inventions of startups that generate patents covering real innovation. If it were not for the existence of firms that take these cases, the startups may not be able to recover their investments if their products do not succeed for any reason.i4i is a classic example.That said, I will agree again that the problem mainly is the USPTO issuing junk patents. That problem has to be addressed.

            5. But there are legitimate inventions of startups that generate patents covering real innovation. If it were not for the existence of firms that take these cases, the startups may not be able to recover their investments if their products do not succeed for any reason.Ned, there’s a big difference between (1) a legitimate startup who files patents and makes a bona fide attempt to market a product or service covered by thoes patents and fails “for some reason” and then wishes to sell their patents to another entity to try their luck and making a company work and (2) patent trolling.

            6. You need to re-visit the award winning historical article that shows that our founding fathers thought otherwise – in part that the ability to alienate property freely was critically important in our patent system. Your views here simply do not hold water.

            7. Alun, it is in the professor’s letter. But this simply reflect the line taken by the big boys that they invent, and when they produce new products they get sued. I think they believe it.

            8. it is advanced. Seriously.Show me the quote where that exact argument is being made. Seriously. I think other arguments are being made. Seriously. And I think you know that. Seriously.

            9. Malcolm, the good professors said this in their letter:”However, empirical evidence strongly suggests that many PAEs have a net negative impact on innovation.”

            10. From the good professor’s letter:”However, empirical evidence strongly suggests that many PAEs have a net negative impact on innovation.”

            11. many PAEs have a net negative impact on innovationSo do “many” large companies, as well as “many” individuals, and I’m sure there’s plenty of empirical evidence for that too.If he can’t make a more meaningful statement than “many” (say, “most” (by number, market size, whatever), or “all of them, in the aggregate”), he might not be that good a professor.

            12. what do you think of the argument being advanced by some of the big boys that enforcing patents of startups against big companies retards the progress in the useful arts?There are no “big boys” who have advanced that “argument” in the manner in which you’ve presented it. (Happy to be proven wrong if you can show me the quote).So I think that “argument” is a strawman of your making, Ned. Or maybe more accurately it’s just a fiction that is not worth addressing beyond what I stated in the previous paragraph. You decide.

          3. Your argument–with the reminder e-mail statement as example–shows that you are concerned with what you think are invalid patents. Well, is this the only time when invalid patents are granted? Is software the only arena where small incremental innovation is patentable? The law says any useful, new improvement in the art, which would not have been obvious to a person of skill in the art (at the time the invention was made) is patentable. Therefore if a flat head screw/screwdriver anticipates or renders obvious a Phillips screw/screwdriver or an Allen wrench, is a question for the jury. The way I understand is that they have different uses in different places and they act with different amounts of force, mechanical advantage etc. These are different inventions and should be patentable. Perhaps you beg to differ because to you it is obvious, but as they say, after the fact everything (even the theory of relativity) is obvious. But the idea you espouse, to knock off everything you consider trivial improvement, is dangerous. There is perhaps no such thing as a pioneering invention because everything is an improvement in the art. Indeed if an “invention” is too far off base from current knowledge, then either the invention will be unpatentable for lack of enablement.

            1. Your argument–with the reminder e-mail statement as example–shows that you are concerned with what you think are invalid patents. Well, is this the only time when invalid patents are granted? Is software the only arena where small incremental innovation is patentable?Small incremental innovation should almost never be patentable absent a clear showing of unexpected results or teaching away in the arts.And junky software patents are all the proof that anybody needs for that basic, fundamental proposition. Software is especially prone to abuse because of the bizarre manner in which the PTO (and the courts) have allowed software “inventions” to be claimed, i.e., functionally. It’s so incredibly easy for anyone to imagine a new function being added to an existing system (or a “bug” in the existing system being “fixed”), the act of “inventing” in the “software arts” is reduced merely to the act of writing something new down and folding in some text about “a computer”. That ease is what leads people who (1) have money and time to spend on filing applications and (2) an understanding of the patent system and (3) the inclination to take advantage of flaws in the system to do just that. They file these applications on “improvements” to a company — could be a “start up”, could be a larger company, doesn’t matter — then they form a shell company and when the patent issues they sue the company when it updates their system. Or if that doesn’t work they just describe what company already did in a “new” way and sue the company.There’s a term for that kind of person, who is typically an attorney or very friendly with a like-minded lawyer: a bottom-feeder. If you find that judgmental in any way, that’s really your problem. Why is that your problem? Because there’s more people like me than there are bottom-feeders. Tough luck.

            2. Is this manifest (self) hatred really necessary?Malcolm, I implore you: get into a field in which you can believe in the work product produced.(sigh) Inviting, that would be ‘he,” and you mis-spin my being right as persistence. Plus, you are w-a-y too generous in ascribing Malcolm to be right at some point – his views have been consistently off (based on any type of legal ‘thinking’ that he includes in his posts (or as – typically more to the point – the absence thereof).

            3. Anon, just because I didn’t say that you were “right” doesn’t mean that I believe you to be wrong. I really have no idea, I try to stay out of the direct line of fire between you two. As far as agreeing with MM regarding junk patents, I agree with many of his conclusions, but I have my own reasoning–usually lack of SS&C utility, where so-called “software patents” are concerned. Oh, and sorry I overlooked your penis, but you should be used to that by now, right?

            4. Wow mixed messages, Inviting – like you overlooking my penis? You’ve been eyeing that for some time now. Like not wanting to get between Malcolm and I? Ditto.Tell me what you really mean please.Turning back to the discussion of law, your posts do try to show reasoning. Like I said – you err by giving Malcolm w-a-y too much credit. His ‘sniff’ approach lacks reasoning (and reasonableness). You don’t have to say that I am right for me to remain being right. I am cool with you not saying it. But don’t go overboard in the other direction just to avoid saying it. Look at Malcolm and the Myriad decision: I was 100% correct (decision and reason) and Malcolm spewed 30,000+ words trying to avoid three little simple ones.

            5. “Small incremental innovation should almost never be patentable absent a clear showing of unexpected results or teaching away in the arts.”This statement cannot be justified under the law. It is ridiculous on many levels.Anon has gotten to you again MM, she has dismantled you with her persistence.Is this the kind of thing that you actually believe, or is it just a response to anon?

        2. Recently, in researching IPRs, it appeared that some big companies were filing IPRs against every one of the smaller company’s patents. They can do that because standing is not required. But it is consisted with the idea that big companies are not adverse to winning by intimidation.

          1. It should be clear to everyone that Big Corp would rather compete in a patent-less society, where other forces such as shear [sic - as in fleecing the public] market power gives them the competitive advantage.

            1. And yet it’s always Big Corps like IBM and Microsoft that are squashing patent reform. Big Corps with long histories of anti-trust abuse that don’t want to compete at all are the strongest patent maximalists.And startups are the firmest opponents of patents that apply to their domain of operations.In fact, reality is the exact opposite of the world you seem to have invented for yourself.link to washingtonpost.com…(Other listed opponents of patent reform: 3M, GE, DuPont, P&G, Xerox. The typical Big Corps are the advocates of patents used to squash fair competition.)

            2. You’d think such facts would pierce their inconvincible ignorance/theology hide but it never seems to nor will it ever be likely to. The big guys are simply bad news to them, period. End of story.

            3. The big guys are simply bad news to them, period.Big Corp are only “bad news” to trolls to the extent that Big Corp attempts to remove the ability of trolls to attack Big Corp. Otherwise Big Corp is the lifeblood of trolls. Read what J Nicholas Gross wrote upthread (and he obviously knows a lot about how patent trolls think!): if trolls can’t get money from Big Corp, they’ll try to get it from Big Corps’s customers. Of course, we all know how an “explosion” in lawsuits by patent trolls against customers is going to turn out for the patent trolls. And they know it, too. That’s why they whine and cry and attack “the messenger” (who is pretty much everybody that isn’t directly benefitting from the patent trolls game).Patent trolls “hate” “Big Corps” like remoras “hate” dolphins.

            4. Owen,You have been caught in a classic mistake thinking that Big Corp won’t hedge and use patents.Obviously they will.Such in no way diminishes my point.And now watch Malcolm chime in with some nonsense that Owen’s point suffices to refute mine (which of course it does not, as anyone with any sense of logic can tell you – maybe he should look up the word ‘hedge’…)

            5. Such in no way diminishes my point.Your “point” was that “Big Corp.” wants to live in a “patent-less world.” That point was demolished by Owen’s factual rejoinder. Try again.

            6. Big Corp would rather compete in a patent-less societyI know plenty of people (including lawyers) who work for themselves and who work for big corporations. I don’t know know any of them who seek a “patent-less society.” I know such people are out there but the viewpoint you expressed is hardly representative of any “Big Corp.” that I’m aware of. Can you name one of these “Big Corp” and point to a quote from someone authorized to speak on behalf of that Big Corp.?I doubt it. In fact, it’s silly to even ask you because you’re more likely to just make something up.

            1. I consider using legitimate processes for illegitimate purposes an abuse. That is the topic of conversation here, after all.Indeed it is. But the evidence that patent trolls love to assert junk patents and leech off big companies and threaten small companies (whatever works!) is pretty hard to ignore. The evidence that big companies go after small companies and file frivolous IPR’s “just because” is pretty much non-existent. Or nobody really cares because, while it’s increasingly likely that any of us will be targeted by a junk patent lawsuit initiated by a wealthier patent troll, it’s increasingly unlikely that the average person will be a plaintiff in the patent game. See how that works?

            2. “file frivolous IPR’s”And to be clear, I wouldn’t file frivolous IPR’s. If that’s what they’re doing then yes, that’s a concern.

            3. Leech is apt if the patent is essentially invalid or, rather, a business method or software patent. Otherwise, leech is not apt at all.To the extent a so-call troll is avoiding a decision on validity, I think that is strong evidence that troll is wielding an invalid patent. The Patent Office is the problem here, and to some extent, so is the Federal Circuit by not cracking down on software patents, by not cracking down on indefinite claims.

            4. “or, rather, a business method or software patent.”LOL – nothing like broadcasting the bias so loudly. Now all you need is some actual legal basis for the bias.

            5. anon, you will recall that the en banc Federal Circuit came out with the MOT to strike down abstract claims with a clear test. But we all know what happened on appeal. But that does not mean that business method claims are legit. They are not. They are abstract.

            6. As a category Ned, the Supreme Court (and Congress, and the Patent Office) have each said differently.Please feel free to do more than simply give your opinion on how you would like the law to be in your magical kingdom.

            7. Leech is apt if the patent is essentially invalid or, rather, a business method or software patent. Otherwise, leech is not apt at all.Right. Why should I assume that any software or business patent is not junk when the USPTO is utterly incapable of examining them?As far as I know, there are no “patent trolling” issues in the mechanical arts or biotech. There’s good reasons for that. You know what they are. Everyone does.

            8. OK, then we will agree that a troll, by definition is asserting a “junk” software or business method patent.And the source of the problem are the folks pushing these as eligible subject matter, and the folks on the Federal Circuit who created them and defend them. Fix the Federal Circuit, we fix junk patents.

            9. How is questioning the validity of any given corporation’s stack of “innovations” an abuse brosefus? They want to play ball? They want to throw down? K, let’s throw down. Keep in mind I’d do the same thing as a small corp to the best of my ability. You want to fight about one patent or a small stack? How’s the rest of your stack lookin? Oh, it’s all happily licensed and you’re making $$$? Maybe nobody has bothered to take a look at the validity of the rest of the stack? Mhmmm, I see, well ok…Of course, if their demands are reasonable then I might take a license. But millions of dollars? Themses fightn werds!

            10. No doubt, if the entire portfolio is junk, IPRs against the entire portfolio might be justified. But it is more often the case with giant against midget, that the giant uses his weight.

            11. Just skimmed it, don’t see evidence of a huge filing of challenges. Though, since you cite that case I presume they are present. In any event, I also presume that in that case all their patents relate to digital picture frames. If the company’s patents all deal with practically the same thing I see no reason why the big corp wouldn’t want to go ahead and clear out the area so they can operate.

            12. 6, actually I was referring to the summary of the other IPRs. There were examples listed where numbers of patents had been challenged. There were other examples that were not listed where the same occurred. I must admit, however, that we do not know why the multiple patents were challenged.

          2. I don’t think anyone is asserting that big companies are “adverse” to “winning by intimidation”. This is one of the reasons that everybody should be wary of the behavior of big companies and seek to put limits on how big those big companies get.But those limits have little to do with the issue of patent trolls, who achieve little or nothing in that regard and who are typically as pro-corporate as one gets. Patent trolls thrive by sucking the blood of big companies (or their customers, when they get truly desperate). They only time patent trolls aren’t licking their lips over the existence of big companies is when big companies kick sand in their face.it appeared that some big companies were filing IPRs against every one of the smaller company’s patentsBy itself, that means nothing. It’s entirely possible that every one of those patents is a piece of junk that deserves to be IPR’d. In which case: good for the big company! One tiny reason to support them.

            1. Could be they are all junk. True. And, without looking in more detail at the particulars, I would suspect they all might be of the business method type, in which case I am on board with challenging all of them.But the arrogance of power is on display with many of these big boys. If it were not for the so-called trolls, they could simply ignore the patents of the small fry. This would, if you think it through, spell the end of startups as the big boys could simply steal their IP with impunity.

            2. If it were not for the so-called trolls, they could simply ignore the patents of the small fry.That is false.the big boys could simply steal their IP with impunityFalse again.And who are the “small fry” you are referring to, Ned? Please define “small” so there’s no question about exactly what you are alleging here.the arrogance of power is on display with many of these big boysWith respect to patents, at least, the “arrogance of power” on display by the “big boys” is nothing compared to the “arrogance of power” of the typical patent troll who produces nothing and demands everything because some clueless Examiner stamped their piece of paper.

            3. Malcolm, we both know that the word troll, as bandied by the big boys, is intended to include any patent asserted by an NPE regardless of whether they represent legitimate inventors and startups or whether the patents they are asserting are junk. So when I say that if it were not for the so-called trolls, the big boys could infringe with impunity, I am referring to the fact that if there were not firms willing to take small fry inventor/startups on as clients, the big boys could infringe with impunity.If we act to strip small inventors of their ability to sue by imposing obligations to pay for the attorneys fees of the other side regardless of the merits of the case, then we will have granted the big companies immunity from suit from small fry.

            4. we both know that the word troll, as bandied by the big boys, is intended to include any patent asserted by an NPE regardless of whether they represent legitimate inventors and startups or whether the patents they are asserting are junk.By definition a bona fide “startup” filing patents to protect it’s business isn’t an NPE. And Ive never heard any of the “big boys” suggest that “all the world’s true inventors work for us so everyone else is illegitimate.” They aren’t that stupid.immunity from suit from small fryAgain: define “small fry.” Patent suits can be expensive but not so expensive that they typical patent troller can’t afford to file one and make their case. This assumes that the patent isn’t junk. It definitely costs more to successfully and meaningfully assert a junk patent all the way through trial, which it should.Take J Nicholas Gross, for example. Remember how he thought Spangenberg was so awesome because Spangenberg “gets back up” and “keeps fighting”, no matter how badly he loses or is sanctioned? That’s the sort of thing that gives patent trolls wet dreams: the money and the shamelessness to keep pressing forward no matter how junky the patent and no matter how much of an ass you make out of yourself. That’s what they live for. That’s “winning” in their world. There’s really no way to stop these guys unless you kick ‘em really hard where it counts.

    2. Lemley is a corporate hack and he should be exposed.Then expose him.Please tell everyone the names of the corporations that Lemley is hacking for and how much they are paying him.Bear in mind there are far far far more Lemley’s out there who have no corporate ties whatsoever but who feel pretty much exactly the way Lemley does. So let’s say you manage to completely discredit Lemley as a “corporate hack”? What happens then? You think everyone will start loving patent trolls?

      1. “Then expose him.”Criminy Malcolm: Lex Machina, for starters.Open your eyes please..note: Malcolm’s Vinnie Barbarino response is a massive FAIL. If Malcolm cannot be bothered to come to the discussion without informing himself to some minimum level, why does he bother at all?

    3. “They refused to negotiate with an inventor, who then turned to the enforcers.”That is actually historically inaccurate in this case. Look into the history from the articles that were posted on the previous thread if you’re interested.

  16. Lots of regulation and difficult line-drawing, but nothing about removing or reducing the presumption of validity.

  17. I am constantly perplexed by how every reform proposal fails to include any way to get expedited review of invalidity. I realize (as a full-time patent litigator) that there will be prior use and sale defenses that simply can’t wait until after discovery, but the vast, vast majority of my cases have proceeded solely on prior art that was a patent or publication, and thus required no discovery beyond learning of the reference in question. To me, if we’re going to have limited discovery leading up to Markman (a reform I support), then I think it makes sense to follow that with a short trial on invalidity. Even if you had to empanel a jury for that, it would in my estimation save a lot of jury time in the long run. In my experience, Markman does not convince anyone to settle, because no matter what, there is always an argument left for a losing plaintiff under DOE, and there’s always an argument left for a losing defendant under invalidity. At bottom, I don’t see a problem with NPEs. I see a problem with any plaintiff being able to use the inefficiencies in our procedure for adjudicating patent litigation to hold a defendant hostage with an invalid patent. In my experience, if you could get a court (and a jury) to pass on your main printed references, and give a thumbs up or thumbs down on your invalidity case, most cases that are not resolved by the invalidity ruling would quickly settle for the appropriate eyes-open number. That’s just my take though.

    1. I guess the question is, what is the goal: to “resolve” a case, or simply make it easier for patent owners to fail. A favorable invalidity decision for defendant (letting them go first), or favorable infringement decision for plaintiff (letting them go first instead) have different consequences. No side thinks of losing, so these are the only real options. As a plaintiff if I lose on validity, and there are other people on my radar, I have no further downside or motivation to settle – I’m just going to appeal and if I win we are back again. I don’t know what is gained, D still has to pay attorney fees to contest that part of the case. In my experience if defendant loses on infringement however chances are not nearly as high that they will contest the rest of the case – the persons in power tend to think of it as throwing good money after bad. They are not in the business of patent enforcement as a full time business. So if your goal is resolutions, plaintiff should get to go first on infringement before validity. There is also IPR now, which is very fast. If your goal is to increase plaintiff failures, then doing validity first increases the likelihood of that scenario.

      1. “If your goal is to increase plaintiff failures, then doing validity first increases the likelihood of that scenario.”The goal is to increase the overall efficiency of the system. If a patent is rendered invalid, the holding can end and/or prevent multiple cases. A holding of either infringement or non-infringement generally has less of an impact outside the case at issue. So long as there are a substantial number of invalid patents being asserted, then it makes some sense to me to get the invalidity determination out of the way first.

        1. “The goal is to increase the overall efficiency of the system”LOL – I thought the goal was to promote the progress and enforce the Quid Pro Quo in order to do so.Lot’s of dust-kicking going on. If you want to change the litigation system, then any measure to do so should not be limited to the patent world. If you want to change corporate formation practices, again, any measure to do so should not be limited to the patent world.”Efficiency” is an Infringer’s Rights’ buzzword – revisit my posts on efficient breach.

          1. “LOL – I thought the goal was to promote the progress and enforce the Quid Pro Quo in order to do so.”It’s possible to have more than one goal, isn’t it? And why can’t we promote the progress and enforce the Quid Pro Quo more efficiently?”If you want to change the litigation system, then any measure to do so should not be limited to the patent world.”Why?” If you want to change corporate formation practices, again, any measure to do so should not be limited to the patent world.”Why? And who is promoting the changing of “corporate formation practices” in the patent world?

            1. Oh, you were not foolish to expect an answer, and an answer you got.But you were foolish to expect the result to be in your favor.

          2. “Efficiency” is an Infringer’s Rights’ buzzword”Infringer’s Rights”? But we’re all “infringers” in your world, TB. That’s why we need to talk to Intellectroll Ventures before we start our business, remember? You know: clearance.Isn’t that the new world we’re all supposed to “get used to”? Because “claims as a whole”. Or something.

        2. So long as there are a substantial number of invalid patents being asserted, then it makes some sense to me to get the invalidity determination out of the way first.Agreed, although it’s not a matter of requiring that some substantial number of invalid patents is asserted, but rather it’s the fact or possibility that the patent(s) will be asserted against multiple parties that suggests dealing with invalidity first. In addition to this, I think “invalidity first” makes good sense for the reason I already gave to Bob (i.e., the potential for abuse of discovery by plaintiffs during the infringement analysis).This assumes there is a non-infringement argument that the plaintiff wishes to make. If there isn’t, then the defendant can and should stipulate. But this requires knowing exactly what the patentee believes would constitute infringement. That’s something the patentee should be able to provide up front and in detail, along with their clear views about exactly what the claims include (the credibility of which will be determined at the Markman hearing).

          1. “Invalidity first” relies on Markman first.And useful Markman requires discovery, both ways.”Clear views about exactly what the claims include” are only relevant insofar as they relate to an objective–in the abstract, the claims themselves are just such a “clear view”, without further construction.I’m all for precision in the statement of claim, but the mechanics of litigation must be respected–that statement of claim is a reasonable belief, that as yet has not been proven, and is not required to be proved at that point. There are standards required of a statement of claim, although I agree that they might be tightened in the case of alleged patent infringement.Regardless, not even Markman can be usefully conducted without discovery, because ideas of the infringement frame the Markman inquiry itself–so much so, that many consider the litigation over when Markman is concluded.MM, you are at this point improperly importing your fight against junk patents into this discussion.I would be willing to accept such importation, if you could provide any evidence that the majority of patents involved in enforcement actions–including the sending of a demand letter–are junk patents.As it now stands, you are effectively labeling all patents as junk patents.

            1. “because ideas of the infringement frame the Markman inquiry itself”They may currently, but that’s kind of the point, they shouldn’t and there is no reason for them to.

    2. Bob: I am constantly perplexed by how every reform proposal fails to include any way to get expedited review of invalidity.Answer: Inter Partes Review

        1. I don’t understand your point. What is unconstitutional about a court having a jury hearing on validity prior to a hearing on infringement?

      1. I realize that IPR is out there, and I hope it has a real long-term impact, but I still feel that there is room and reason for allowing the courts to take up validity out of turn as well. For a variety of reasons, people may not opt to do IPR after they are sued. That should not mean that they have to wait years for a trial on that issue.

    3. In my experience, Markman does not convince anyone to settle, because no matter what, there is always an argument left for a losing plaintiff under DOEThat’s not true in my experience. If the plaintiff is relying on a particular construction and that construction fails, any chance at a DOE typically fails as well. It’s true that anyone can make “an argument.” But you need a really good argument to succeed on DOE and those are few and far between (as they should be). This is why so few cases seen to completion are won at the DOE level.The underlying issue here is that all “modest” legal reforms go out the window when the area of law becomes infected with deep burrowing parasites who have the money and inclination to behave like irrational sanction-immune prcks who simply fk with people for the sake of building a reputation as a fker that you don’t want to meet in court (so “give me the money”). I’m pretty sure that’s what’s happened in our area of law. A good sign that was happening was when patent attorneys were shamelessly and publically announcing their intentions to become players at the Patent Casino rather than the relatively harmless sideline players they’d been before.f we’re going to have limited discovery leading up to Markman (a reform I support), then I think it makes sense to follow that with a short trial on invalidityAgreed. This minimizes the possibility that the plaintiff (who may be prosecuting patents specifically for the purpose of sueing people with them and who would love to have access to confidential information) from getting access to information that he/she doesn’t deserve to have. See, e.g., this smackdown involving an infamous patent troll named “Phoenix Solutions”:link to jenner.com…It’s a fun read. Trust me.

  18. Finally we’re getting somewhere with Dennis’ commentary, but one thing is being left out: small-entity patent-holders. Small-entity plaintiffs really get the shaft.Yes, there is the theoretical ability to sell the patent rights to a larger entity, but in the real world that is not the norm, for a whole bunch of practical reasons.Regarding the 6 proposals:1) attorney’s fees should be based on bad faith/good faith, and therefore should have no associated “quota”. IF there is to be some sort of sliding scale of good/bad faith, then there should be an equivalent sliding scale of attorney’s fees award, regarding the fraction of the attorney’s fees that is awarded.2) all other things being equal, claim construction should be the third step in litigation, after jurisdiction and standing; however, not all other things are equal. Having post-construction discovery orders could more specifically tailor those orders, or obviate them entirely if the claim construction is followed by a validity, eligibility, and/or enforceability challenge…BUT if a small-entity patent-holder is going after a large-entity potential infringer, a discovery order can be a valuable tool in negotiations.3) “that “simply” sell or use allegedly infringing technology”?! There is nothing “simple” about it, and it is no less an infringement under 35 USC than any other infringement. There are already potentially consumer protection mechanisms that can deal with this circumstance. Also, not all markets have the same structure, and in some types of market structure, this proposal would make no sense whatsoever. Not all patents are embodied in consumer devices.4) How much greater specificity? I agree with this, as long as the required degree of specificity relates to the degree of knowledge of the plaintiff–that is, the plaintiff should be expected to make the best possible statement of claim that they can make; importantly, though, “best” should not be equated with “narrowest”. It should have sufficient breadth to allow for new knowledge gained in discovery, but it should have sufficient explanatory power to enable the defendant to make a reasonable assessment of his or her position.5) I have no problem with this.6) yes, of course the devil is in the details of the definitions of fraudulent, misleading, and abusive.We should not forget, as some of the above comments seem to do, that there are small-entity patent-holders as well as infringers, who have been given the shaft after eBay and other decisions.

    1. if a small-entity patent-holder is going after a large-entity potential infringer, a discovery order can be a valuable tool in negotiations.You want a discovery order before claim construction because … why?

      1. From my response to another post of yours above:”Useful Markman requires discovery, both ways.”Clear views about exactly what the claims include” are only relevant insofar as they relate to an objective–in the abstract, the claims themselves are just such a “clear view”, without further construction.I’m all for precision in the statement of claim, but the mechanics of litigation must be respected–that statement of claim is a reasonable belief, that as yet has not been proven, and is not required to be proved at that point. There are standards required of a statement of claim, although I agree that they might be tightened in the case of alleged patent infringement.Regardless, not even Markman can be usefully conducted without discovery, because ideas of the infringement frame the Markman inquiry itself–so much so, that many consider the litigation over when Markman is concluded.”

      2. Why is my response to this question being moderated out of existence? Briefly, Markman cannot be, and is not, conducted in a vacuum, it needs a referent.That referent is established through pre-Markman discovery.

  19. From the Left and from the Right…… (through Prof.’s Cotropia, Kesan, and Schwartz by way of Prof. Hricik: link to npedata.com )…with Besson on board, any sense of “empirical findings” is suspect….(1) most definitely needs to change from accused infringers to adjudged non-infringers, and quite possibly adjudged non-infringers with suit being brought in a baseless manner. Anything less is from the Infringer’s Rights Handbook …the letter indicates that patent thickets as “a delicate and self-correcting mechanism” are a good thing. They are not. This seeks to restore the ‘sparkle’ of nuclear armageddon that only the Big Corp’s can play. In this sense, the best feature of “Trolls” is being sought to be neutered as some type of flaw.(of course, Malcolm’s measured response is the Vinnie Barbarino meme)

  20. This is my favorite part:”This letter presents the views of the individual signers. Institutions are listed for identification purposes only.”Interesting that these bastions of academia found it useful mention their “university” affiliation, but conveniently “omit” any mention of the large companies sourcing their anti-patent funding

    1. Interesting that these bastions of academia found it useful mention their “university” affiliation, but conveniently “omit” any mention of the large companies sourcing their anti-patent fundingThey seem like reasonable proposals to me and they are hardly “anti-patent”. I’m not “anti-patent” either, although I certainly find the behavior of patent trolls to be frankly disgusting. And nobody’s funding me.Why don’t you help everyone out, Nicholas, and disclose your interest in this issue? Or do you want someone else to help you with that?

      1. “seem like reasonable proposals to me and they are hardly “anti-patent”. I’m not “anti-patent” either”LOL.No wait,LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOLahh,Now, you were saying?

  21. Dennis: many good points1) The defense bar is sowing what they reaped after the STM “we can sue you anytime for DJ” decision, b/c now there is no incentive to negotiate anything – you have to sue or be sued – this more than anything has led to the rise in litigation and the so-called “fee” burden from expensive counsel2) the defense bar complained of multi-defendant lawsuits, so instead of one case, 20 defendants, AIA gives us 20 individual cases: OMG PATENT LITIGATION EXPLOSION3) defense bar grew enamored of their new pet “divided infringement” defense, which let them avoid liability if they can find some step they don’t peform – so they started using it everywhere – well, of course, if you are plaintiff, you are going to start suing the folks who definitely practice ALL steps, which is usually customersThese are the kind of folks who complain about forest fires, and rather than building a reasonable fire barrier, instead raze the entire forest and then start writing about the “problem” of no …wildlife. In almost all instances the “problem” identified was brought about by unreasonable conduct by the entities these guys are protecting under the guise of “academic” objectivity. That Lemley is allowed to pose as an academic in the letter – all the while he is on the payroll of large scale infringers – is a farce, and I doubt he is the only one masquerading on that list.

    1. Nick, excellent points, as usual. The proposals from the professors would be of no help to smaller companies which have lesser means to defend. Considering the ratio of the cost of defense to revenue, it’s the small companies that really suffer. Cutting down pre-Markman defense cost to $500k or even $100k doesn’t matter when the value of the license is less than that. I’m not saying that small companies should get a free pass, as they used to do when they flew under the radar in patent licensing. On the other hand, when the cost in attorneys fees is a meaningful amount when compared to the value of the license, we have a real problem. Post-grant USPTO proceedings don’t help here because their cost is also too high, especially if you add in the cost of a motion to stay. There are plenty of situations where a patent owner has a legitimate claim against a small company, and these transactional costs hurt the patent owners, too because the transactional costs suck up license fees. Circling back to Nick’s first point, the post-STM standard of sue first, ask questions later needs to change.

      1. Steve, if small companies think the problem is validity, they really need the bigger companies to take on the patent. Not being part of a larger suit then becomes a problem, not a benefit. But the disjoinder rules act to prevent that.Patent reform seems to have done some collateral damage to smaller companies.

        1. Ned, you are right in that in prior times, when a multi-defendant case was filed, it was actually harder in most instances to settle or resolve because the majority of them would line up behind the big chief and do… nothing b/c they could piggyback off the larger companies’ work. It effectively cost them zero to participate in the case.

        2. I would question whether the damage can be rightfully called ‘collateral,’ or rather if the more appropriate term is ‘intended.’And you think it a good idea to put someone from Big Corp in charge of the Office?

      2. “Post-grant USPTO proceedings don’t help here because their cost is also too high”Why are they too high? And what can be done in the PTO to lower the cost?

      3. I’m not saying that small companies should get a free pass, as they used to do when they flew under the radar in patent licensing.”Small companies used to get a free pass.” That’s interesting. What changed?There are plenty of situations where a patent owner has a legitimate claim against a small companyIndeed. And what’s preventing a patent owner with this “legitimate claim” from contacting the small company and reasonably discussing a license? Please note the term “reasonably”. What’s standing in the way of that? The answer is “absolutely nothing.” I and my friends in the business world are perfectly happy to entertain all kinds of reasonable proposals about “legitimate claims”. We aren’t going to rush off to the PTO and create a big food fight just to “up the stakes”. Why would we do that? What kind of person does that?

    2. Yeah, the instant DJ by even sending an introductory letter is a problem. I was wondering why Spangenberg sued first and talked later. This explains it.

    3. In almost all instances the “problem” identified was brought about by unreasonable conduct by the entities these guys are protectingROTFLMAO. Seriously, Nicholas? What are some of the exceptions to these “instances”? Can you name any?

    4. Lemley is allowed to pose as an academic in the letterHe is an academic. What should we call you, Nicholas?all the while he is on the payroll of large scale infringersWho are you referring to and what patents are they infringing? Your patents, Nicholas? I doubt he is the only one masquerading on that list.Who else do you think is “masquerading”, Nicholas?

    5. Shorter J Nicholas Gross: “The ‘defense bar’ is responsible for patent troll behavior.”Hey, Nicholas. Did the “defense bar” make you prosecute junk claims, then make you assert those junk claims against defendants, forcing those defendents to spend hundreds of thousands of dollars (or more) dealing with your junk patents and your legal shenanigans before they were finally invalidated? Or was that something that you had some personal control over?Like this for example:link to jenner.com…Note the terms used by Patel throughout the order to describe Phoenix’s behavior and arguments: “unacceptable” “ill-founded” “nonsensical” “unrealistic” “awkwardly sidesteps the fact” “arguments … set up a straw man” “Gross is indubitably involved in the sort of decision-making that disqualifies him from having access to Wells Fargo’s confidential information” “Phoenix has already crossed the line” “disingenuous” “sleight of hand” “omitted “no convincing basis for Phoenix’ proposition”, etc. etc.Were your little games there also the fault of the “defense bar”? Let everyone know what else the “defense bar” is responsible for. Your parking tickets, maybe? Or perhaps you’ll tell us all that “everyone does that.” I can hardly wait for the explanation. Nobody expects an apology, of course! I mean, you were just trying to make a buck, right? “Everybody does it.” Who can blame you? Seriously, the underlying truth in your comment is pretty evident, isn’t it? Patent trolls like to make money by sueing people with junk patents and you object to attempts to make that more difficult because you play the game yourself. There are lots of patent policy issues but somehow you show up for this one and start your crowing about how the “defense bar” is responsible for wealthy attorneys pretending to be “little guys” and trying to further line their pockets at the expense of an already broken patent system. And then you whine when someone objects. Boo hoo hoo! And the critics are “clowns” and “ignorant.” Sure we are, Nicholas.Where were your awesome insights during, say, the run up to Prometheus? Or were you too busy filing lawsuits and creating shell companies? Let everyone know, Nicholas. Point us to the links where your “objective” legal wisdom was on display for that important case. Surprise us all.

      1. Isn’t that sweet, I’ve got my own little shadow! I’m pleased my life is so fascinating to you, you can be the first to buy my book – since you seem so interested in all things Phoenix you’ll be pleased to know that a) WF paid them a nice settlement; b) Nuance – the premier speech recognition company in the world – bought the whole portfolio this past summer, without anyone… firing a shot. Amazing how they seemed to have a bit more appreciation than amateur board trolls like you on the merits of these patents! But keep trying, haters gotta have something to motivate them I guess.

        1. you’ll be pleased to know that a) WF paid them a nice settlement; b) Nuance – the premier speech recognition company in the world – bought the whole portfolio this past summer, without anyone… firing a shot.MM: “You’re a horrible person who extorts money from people in unfair ways.”JNG: “Lots of money.”Y’know what, you’re probably both right.

        2. I’m pleased my life is so fascinating to youI wouldn’t call it “fascinating”, Nick. Your arrogance, your obliviousness and your lashing back at whoever dares question your, um, “methods” pretty much fit the bill for the typical patent troll and/or troll defender. Maybe that was “fascinating” a few years ago but it’s not so “fascinating” now.I’ve got my own little shadowNah, somebody just paid attention to you when you showed up here and started calling people “clowns” and accusing them of being “jealous” of Spangenberg. Are you surprised by that? I don’t know why you would be.since you seem so interested in all things Phoenix you’ll be pleased to know that a) WF paid them a nice settlement;You seem to be suggesting that you merely did some work for Phoenix Solutions. Is that suggestion accurate?they seemed to have a bit more appreciation than amateur board trolls like youA couple things, Nick. First, the fact that some morons paid you or friends some money for a patent that you had anything do with doesn’t impress me in the least. Second, it’s pretty funny that Nick the Greek, of all people, would refer to anyone as an “amateur board troll”.link to investorvillage.com…But then again — this is sort of a pattern with you, isn’t it? I mean, down below in this very thread you suggest that putting off discovery related to infringement is somehow “anti-patent”. And yet, unless I’m reading Judge Patel’s order incorrectly (please let everyone know) you yourself were taken out to the woodshed for attempting to abuse discovery in a patent trolling case. But now we’re supposed to feel chagrined because Wells Fargo settled with you? Again, it would almost be funny if it weren’t so pathetic and predictable.Go ahead and tell everyone how many shell companies you’ve created for the purpose of patent trolling. You’re proud of it, apparently. So please share more of your exiciting adventures and “insights.”

          1. “Your arrogance, your obliviousness and your lashing back at whoever dares question your, um, “methods” pretty much fit the bill for the typical [blog] troll and/or [blog] troll defender.”LOL.No wait,LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL LOLahh, (have to love the Malcolm Accuse-Others-Of-That-Which-He-Is game he plays)Now, you were saying?

  22. I’m interested in the tension between contingency fees and “Loser Pays”, because England does both.When a top rank patent litigation law firm (Sue, Grabbitt & Runne) takes on the case, as a contingency case, it sends a message to the other side, that it expects not to lose. This concentrates minds wonderfully. Both sides quickly acquire a sober assessment of their chances of success at the CAFC. The ensuing settlement will likely reflect the real merits of the case.

    1. My firm, Dewey, Cheetem & Howe, can beat your frim, Sue, Grabbitt & Runne, with one hand tied behinds their collective backs just to make it fair.

  23. Thanks for the blog, but I wonder at describing the letter as having an “overt stance that is pro-large-corporate-entity.”In my field of computers and software, patents are mostly for victimizing small businesses, individuals, and startups. Large entities already can hire armies of lawyers and bureaucrats and raise money for risky litigation. In fact, the reforms we’re seeing proposed won’t save large entities much money compared to their existing cash flows, but they increase the very chances of survival for small businesses.-Pleading reform and loser pays are essential for businesses that can’t afford litigation at today’s prices but won’t do anything important for billion dollar companies that see legal fees as a rounding error.-Fraudulent demand letters are mostly aimed at small entities.-Discovery reform does benefit large companies more in absolute cost reduction, but by discouraging fishing expeditions even that provides the largest share of its benefits to small business.-End user protections are probably toothless and strictly for show so neither large nor small entities will benefit.The letter even references how “small businesses fear patent litigation to such an extent that they are willing to pay to settle vague infringement allegations.” There’s no reference to large entities even though the mammoths are currently in the news fighting ridiculous smartphone patent wars instead of sensibly cross-licensing.

    1. Agreed, because an injunction is no longer possible, the big companies can refuse to negotiate or litigate until H freezes over, chose one, without compunction. In practice, they will pay only when they are forced to pay.Where does that leave things? Smaller companies become the target choice.

  24. Sounds like good suggestions to me!”Since the exhaustion doctrine only allows a patentee to recoup at one point in the stream-of-commerce, it makes sense that they would focus on the highest valued user”I don’t think I follow you D, wouldn’t they go after the manufacturer if possible since he’ll be shipping many many more units?

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