3M & GE: Defendant Litigation Practices are Just as Bad Nuisance Settlement Trolls

The following quote comes from the joint amicus brief of 3M, GE, and others in the pending Supreme Court case of Octane Fitness v. Icon Health and Fitness.

To be sure, there are instances (some extremely well-publicized) of patent litigation abuse involving non-practicing patent owners who use the courts in an effort to collect large numbers of nuisance settlements. Yet this problem, in the experience of Amici Companies, is no more serious than that created by many infringing defendants who routinely fight off meritorious patent suits by pressing scores of frivolous defenses and counterclaims, and who otherwise rely upon dilatory tactics to force unjust settlements. Accordingly, the focus should be on curbing litigation misconduct wherever it occurs. An evenhanded standard, flexibly applied, allows just that.

Do readers have suggestions for studying whether the sense of amici is correct?

113 thoughts on “3M & GE: Defendant Litigation Practices are Just as Bad Nuisance Settlement Trolls

  1. Costs should be indexed to means. We are a tiny company being hammered by IBM on a 1997 patent that can only be described as “junk”. In an English rule situation, you could take our revenue/profit, take IBM’s revenue/profit, and create a ratio so that we equally feel the pain of a loss as a matter of law. If it goes to a jury, (and is not overturned on appeal as non a matter of fact) then it should revert to the American rule.

    The problem is that by the time you get to an obviousness /anticipation determination, its a million bucks in legal fees, so you can’t win either way, and the power is massively tilted in the favor of the person asserting the patent.

    1. Costs should be indexed to means.

      LOL – what next? to each according to their needs, from each according to their ability?

      You know, a lady friend once said, “I would think that if you understood what communism was, you would hope and pray on your knees that we would someday be communists.

      1. “You know, a lady friend”

        Sounds like horsesht made up by a pathological liar trolling patentlyo. Anon verifiably has no “lady friend” saving arguably his mom. Second Jane Fonda said that and anon is not her friend.

      2. I think she was right, but with the caveat that real communism has never existed anywhere, certainly not in the Soviet Union nor in Red China, where party apparatchiks were/are as bad or worse than the worst excesses of capitalism. Where the fat cats are also the state they have unlimited power to throw people in prison, torture and kill them, AND they have all the money, pretty much as in any other type of dictatorship. True communism is a pipe dream, and is a priori impossible as long as human greed endures.

    2. Anyone in litigation against a company as powerful as IBM is going to be sorely taxed. Everyone knows this, which is why one does not litigate against their likes unless one is a fool.

      But let’s imagine that one has a very good case, and goes to court. To get to a verdict, you have to be very well financed or have a contingency fee lawyer. But if you could end up paying IBM’s costs as well if you lose, there is no way anyone would ever sue the likes of IBM for anything unless they themselves were as rich and powerful.

      If we actually grant the big and powerful their attorneys fees this effectively walls them off from any litigation by anybody who is not of their size and power. This is self-evident. The big corporations could all but ignore the patents of anyone who was not well healed. Such a law would fundamentally, fundamentally alter America let alone the US patent system.

      But in England, circa 1607 when the English rule was passed by Parliament, the less wealthy landowners were under assault in the star chamber by the King and others. I can see Parliament passing the rule to protect themselves against these assaults. This might be seen as one of the gauntlets tossed by Parliament in its growing war with the King.

      1. Anyone in litigation against a company as powerful as IBM is going to be sorely taxed. Everyone knows this, which is why one does not litigate against their likes unless one is a fool.

        Litigation is what happens when parties fail to come to a reasonable agreement.

        To get to a verdict, you have to be very well financed or have a contingency fee lawyer.

        Or you could license your patent to a competitor of IBM who wishes to enter the market with a product covered by the patent. And they can contact IBM and have the reasonable discussion about how to proceed.

        Or you could enter the market yourself and enjoy exclusive rights to make and use and sell your invention. After all, you did invent something super awesome that makes you think about sueing IBM and getting really rich, didn’t you? Must be pretty important. Presumably you are an intelligent and creative person who isn’t afraid of doing the actual work to bring the product to market and sell it.

        “Small” business people compete with giant corporations all the time. I can’t remember the last time I bought a McDonald’s hamburger or a Hershey’s chocolate bar or a bag of Cheetohs. Why would I give those companies my money when much, much, much smaller and far more innovative companies make superior products?

        1. MM, a viable patent system not only needs patents but a viable enforcement system. Imposing attorneys fees on the loser all but eliminates enforcement for anybody but the big company. It is simple as that.

          1. Litigation is what happens when somebody sues you out of the clear blue sky. The Patent has no commercial license value because it’s a trivial, obvious, obsolete function. When it was not obsolete, it was still trivial.

            Like I said, without advocating communism, if a litigant loses as a matter of law, fees and costs should be assessed on some kind of index that levels the playing field. IBM can litigate until the end of time with no measurable effect, whilst people on the other side can be utterly ruined in a matter of months on a single litigation.

            Once it turns to matters of fact for a jury, the index should go away and peoplez should take their chances, as they do now. Its the very low quality patents and long road to a summary or declaratory judgment that forms the mechanism of abuse and injustice, for all size of litigant.

            1. LOL – the communist with no understanding of law pipes up again.

              Malcolm, pass the popcorn.

              Marty, when you decide to apply the same ‘logic’ to those that want to use your product (that is, only charge them on a ‘level-playing-field’ of what they can afford, let me know.

              Or is that the ‘type’ of level playing field that you do not want to have?

            2. Yup, here I am again as a real person, not so likely to get banned on this site because Prof Crouch does not appear to be a self-contradicting bag of self-interested ideology.

              We were interrupted last time Anon when you were about to explain why not using your real name was not a pathetic dodge in light of your aggressive opinions on virtually everything anyone posts. Was it national security? Fear of the secret police? I can’t seem to recall…

              I’m not a lawyer, true enough, but the mystery and priesthood of the law is getting crushed by the `toobs. I can learn enough to call BS when I see it, and my radicalization at the hands of IBM assures my motivation.

              Many, many “lawmakers” are also not lawyers, so at some point the dirty rabble actually do make the rules that the priests have to live by. Keep that in mind.

              Plus I’ll work Anon and his mom under the table. People are amazed at the rocks they find me under….

            3. until he got the boot like […] IANAE

              LOL, I only wish. I’d have been quite proud of that.

              Any particular reason you can’t accept the much simpler explanation that lots of people wouldn’t join any club that would have Gene as a member?

            4. here I am again as a real person

              Most definitely not true – Marty is simply a caricature of a no-knowing anti-software patent lemming.

              You should wipe the froth from your lips.

  2. Two general points:

    (1) “Loser pays” works only when the contestants are in roughly comparable Rawlsian original positions. That is, “loser pays” creates distorted incentives and results whenever the resources available to devote to the litigation are substantially different between the parties… or, at minimum, those paying for the litigation (to drag the insurers in).

    (2) I cannot speak specifically to recent patent litigation — the last patent litigation I was involved in was a decade ago and quickly settled. I can, however, speak to litigation generally, and complex and copyright/trademark/entertainment litigation specifically.

    There’s plenty of abuse on both sides of the v.; in my experience, the proportion of abuse on the defense side of the v. significantly exceeds that on the plaintiff’s side of the v. In particular, it’s been my sad experience that the defense side of the v. is so prone to, umm, creative quotation that it implicates one’s diligence as plaintiff’s counsel to trust defendants’ citations of authority and statements of facts (especially on summary judgment), even on signed documents submitted to the court in counsel’s role as officers of the court. The plaintiff’s side is far from immune from this problem… but doesn’t have the PR mechanism or data to play the public controversy game.

    The real problem is that no change to the Federal Rules can, or will, change this kind of misbehavior on either side of the v. This is a fundamental business/ethical/professional problem that is amplified by the personal investment in “creation” or “ownership” of intellectual property (of all kinds). I fully understand the impulse to want to do something that appears to be motivating the members of the Committee who signed on to this plan — there are some very real abuses out there. This proposed set of changes, however, would actually make behavior worse by increasing the essential “burden of proof” on only one side of the v.

    My radical first step would be to do away with state regulation and licensing of counsel in favor of uniform (and enforced) standards and regulation, not to tinker with seldom- and/or selectively-enforced rules that will not change the conduct of attorneys billing by the hour whose bills are being paid by nonlitigants.

    1. The plaintiff’s side is far from immune from this problem… but doesn’t have the PR mechanism or data to play the public controversy game.

      Right, that’s why plaintiff’s side lost the battle to obtain copyright term extension …. I mean … wait, um …

      My radical first step would be to do away with state regulation and licensing of counsel in favor of uniform (and enforced) standards and regulation

      Hmm. You mean like one Federally-run law school with various campuses and a Federal agency responsible for granting and reviewing the licenses to practice? We could call it the U.S. Homeland Legal Education Freedom Office and you might be able to get Texas and Oklahoma to sign on.

      1. Once again, when I brush away the innuendo (that Malcolm stated he does not use – yeah right), I find that there is (shockers) nothing left in Malcolm’s post.

  3. Dennis: Do readers have suggestions for studying whether the sense of amici is correct?

    Sure. 3M and GE can actually do some research proving that what they claim is an “equally serious” problem is, in fact, what they claim.

    The immediate problem they are going to face, of course, is the fact that a very substantial percentage of asserted patents end up in the toilet after these oh-so-unfair defendants press their “frivolous” defenses and counterclaims.

    The other problem these amici need to deal with is related to the first problem: the public abhors junk patents, and the public’s interest is paramount. The average member of the public is far more likely to be on the receiving end (directly, or indirectly if he/she is employed) of a junk patent then to be asserting one. As the public knows very well, the assertion of junk patents is the well-trod domain of a certain class of shameless bottom-feeding patent attorneys who “invent” junk with their target in mind.

    These same shameless attorneys are typically the same people who show up here and blame their actions on their victims, all the while pretending that they are serving some important function. They’re not. They’re the same self-entitled wealthy jackxsses who threaten to take their greased footballs away when their taxes are raised.

    1. Gotta love the English rule. Imagine that your spouse dies due to malpractice. You sue, win, but your victory is overturned on a technicality. As a loser, you must now pay the winning doctor’s legal fees, which can be quite large and even though he is insured. Such a case is described in the opening paragraph of Attorney Fee Allocation by John F. Vargo link to digitalcommons.wcl.american.edu

      To say the least, the English rule so favors the large, well established institution over the small fry as to be a denial of due process. But such is what Obama is advocating for patent owners is about to be passed by Congress. That Obama would back this is almost incomprehensible given that something like the English rule has long been advocate by big business to insulate itself from tort lawsuits of all kinds.

      Why are we seriously considering this assault on due process? This is a joke, an a very bad one indeed.

      1. I am from England, and you are right. It is particularly apparent in that private parties bringing civil suit against corporations is almost unknown there. Of course, that is what big corporations want, so the hidden agenda of the so-called anti-troll movement is not very well hidden.

  4. What if the answer to perceived litigation abuse is, in Anglo-American law, there is no answer? No one could puncture litigation abuse any more eloquently or poignantly than Dickens did 150 years ago, yet after endless reforms to U.S. law in general and patent law in particular, patent litigation more closely resembles the eternity of old Chancery than ever.

    A system that sincerely strives to find justice by meticulously exposing and analyzing every fact and every perspective of what it implicates in a subtly complex issue may not always be a Jarndyce-like case, but it will be one that is easy to satirize (which is amusing) and easy to hijack for parochial gains through “reform” (which is pernicious).

    1. Tour, awarding attorneys fees for bad faith litigation has always been an exception to the American Rule. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975).

      It is also the basis for the tort of malicious prosecution.

    2. In UK we have had a loser pays system for many many decades. If a party starts or defends litigation and is wrong, why should it be excused from paying the costs of the other side?

      Also in UK the court assesses costs, usually on an issue by issue basis. So if a defendant won overall but lost on inequitable conduct e.g. after extensive discovery and deopsitions the cost of that failed issue would be assessed against them.

      Why should the US deprive itself of this salutory procedure?

          1. Paul,

            In what way should ‘the public’ come into play in a dispute between two private entities over what is legally personal property?

            Do you have ‘evidence’ for the counter position that you are advocating? Or is your call for evidence merely an empty saber rattling?

            1. In what way should ‘the public’ come into play in a dispute between two private entities over what is legally personal property?

              Golly, Tr0llb0y, maybe the public is concerned about being on the receiving end of the next “legally obtained” junk patent, or having to pay higher prices for items covered by the junk because the current “legal” system is incapable of dealing with it in manner that satisfied the 99.999999% of the public who are not interested in gambling at the patent casino?

              Just a thought.

              Seriously, though, you’re question shows your contempt for the public interest and your love for aggressively licking the boots of the rich, coddled classes who engage in the worst patent trolling conduct out there.

              The best part is that your clueless and tone-deafness in this regard keeps coming back to bite you and your fellow Quinnbots in the behind. But you just can’t help yourselves, can you? You see a boot on some rich lawyer with a patent, then you’ve just got to stoop down to lick it. How could you do otherwise without being perceived as an “anti-patent communist”?

              Anyway: yummy!

            2. The best part is that your clueless and tone-deafness in this regard keeps coming back to bite you

              LOL – cannot possibly be worse than the “you don’t have to be intellectually honest because this is only a blog” line that keeps coming back to bite you Malcolm.

              That was a real ‘winner’ for you.

            3. the “you don’t have to be intellectually honest because this is only a blog” line that keeps coming back to bite you

              Right. Just like your line that “asserting junk patents is almost as much fun as hiding behind a bush near the school wearing nothing but adult diapers” keeps coming back to bite you.

              Fun game. You’ll start the next round as usual, nutcase? Of course you will.

      1. Paul, at common law, both parties bore their costs. In the 1200s, a statue allowed plaintiffs their costs. In 1607, a further statute allowed defendants their costs on the same circumstances as plaintiffs. Why was this thought necessary?

        Recall at the time, James was still trying to suppress the Catholics, and was in constant disputes with Parliament. In 1609, the statute of monopolies was passed.

        So why was the statute passed in 1607 to allow defendant’s costs?

        1. Because nothing could be more relevant to a 21st century patent policy discussion than 17th century cases decided when the number of patents in force was orders of magnitude lower than that today, and when human beings themselves were owned and traded.

          1. MM, but it would be good to understand why the English passed the statute precisely when the struggle between Parliament and the Crown became so pronounced, when shortly the Parliament would abrogate the power of the Crown to grant patents on trade in England proper, and where this dispute between the power of the Parliament and the Crown would soon lead to the Civil War where Cromwell and his bloody redcoats won. There is likely a nexus between this power struggle and the statute of 1607.

      2. 1607 — appears to have been a pivotal year in the struggle against the power of the King. This was the year the Rule of Law was established in the decision by Lord Coke in Prohibitions del Roy, Mich. 5 Jacobi 1.

        link to bailii.org

        In essence, the rule of law providse that the King himself could not judge cases, but these were to be decided by jurists experienced in the law according to the law.

      3. I was also reading that one of the reasons for the English rule was to stop the English upper class habit of waging war on their fellows by lawsuit.

        Today, in America, we have fee shifting for bad faith and for malicious prosecution.

        1. Ned offers “Today, in America, we have fee shifting for bad faith and for malicious prosecution.

          Ned, I think we would be in accord if we noticed that the aim of the current “Troll” witch hunt hysteria is aimed at a specific class of patent holders who do not practice the invention detailed in the patents that they hold.

          One should keep in mind just who coined the pejorative “Troll” in the first place and why they did so. (hint: it was not for the benefit of any ‘public’)

    3. In the system that Dickens (semi accurately) described you had to deal with multiple government offices just to get a patent. The first English patent issued in 1617, but the British Patent Office was only established in 1853, finally ending that mess. Saying English and then British is not a typo, as Britain was only formed in 1707, which falls between those dates!

  5. District court judges need to get control of their lawsuits instead of just hoping that one or both of the parties will tire of the time and money spent and settle before trial.

    1. That right there is the crux of the issue. It’s what allows the delay and deluge tactics of big defendants to overcome the meritorious claims of the less well funded inventors/startups.

  6. Reading many of the briefs, they mostly seem to endorse that an objectively baseless lawsuit be “exceptional,” most without any further requirement to demonstrate bad faith. (Bad faith has always been available under the American Rule to award attorneys fees.)

    But let’s break this down just a bit more: patents are presumed valid. Can, absent a showing of inequitable conduct of some sort, can the filing of a patent case ever be considered unreasonable based on invalidity?

    I suggest not.

    But more on this below.

    This leave infringement – and that implies no reverse engineering or wholly unreasonable claim construction. But Rule 11 should cover the former and “bad faith” should cover the latter regardless of the statute.

    But now we come to the problem. Broad, indefinite claims, typically functional at the point of novelty. These are legion. The claims are almost always arguably infringed given that they read literally because of their functional language. Thus suing on such claims cannot or should not lead to an award of attorney fees.

    The fault is in allowing such claims in the first place, and in Federal Circuit and the PTO for not developing a more robust stance against indefiniteness and functional claiming.

    Hopefully, the Supreme Court will recognize this and the link of these cases with the Nautilus v. Biosig case, which, in my view, is far more important for patent law and for solving the problem of patents that literally cover whole industries, like the famous Selden patent, based on minor inventions. It is these patents that are causing the so-called troll problem.

    Did any truly believe that Lemelson invented bar code reading? Case in point.

    1. But now we come to the problem. Broad, indefinite claims, typically functional at the point of novelty

      Y.
      A.
      W.
      N.

      Ned; “Strawman, Strawman, Get yer Strawman Here

          1. Columbia Motor Car Co. v. CA Duerr & Co., 184 F. 893 (1911).

            It is sufficient to sustain the claim to hold that the combination embraced a novel element. The claim is held to be valid as covering a combination in a road locomotive of the different elements with a liquid hydrocarbon compression engine of the Brayton type; the limitation to this type being read into the claim by the specification to save it from invalidity

      1. anon, also, don’t you think “odd” that the patent office issues so many patents that cover entire industries? Did Lemelson really invent the bar code reader? Did Selden really invent the car?

        Not really. Why don’t you review the remarks by Henry Ford about Selden?

        When an industry is assaulted by what the industry calls “invalid” patents or poor quality, what are they really talking about?

        1. The canard is ‘many’. Out of millions of patents, you find two examples of bad ones, then assume that that’s the norm. That’s just bad reasoning.

          1. bad reasoning, I cite two notorious examples. But consider the problem. The troll problem occurs when the patent office issues patents that cover whole industries. Now that implies that the inventor invented something profound, something revolutionary, something of fundamental value that all later adopted because of the merits of the invention.

            But we know this is not true in most cases involving troll patents. Are not fundamental patents at all. They are almost all of the Selden or Lemelson type, both of which crafted their claim long after filing to read on the later-developed inventions of others.

            We have reason to object to this practice, do we not? Or do you not find it objectionable?

            But let me stop here and ask you a question: just how is it that the patent office issues so many patents that literally cover entire existing industries?

            1. Ned,

              You are ‘redefining’ the “Troll” problem to fit your latest agenda.

              You have a very bad habit of doing this. The essence of the “Troll” problem is having (and enforcing) a patent that you do not practice.

              That is it.

  7. If you are acting for a prospective defendant you are likely to wish to plead all grounds of defense that are available. Thus you will look to see whether there are arguments as to lack of patent-eligibility, lack of novelty, obviousness and lack of disclosure. In the US you will also investigate inequitable conduct. Failure to consider all available grounds of non-enforceability and to advance all grounds for which a reasonable case can be made out means not putting forward the most robust possible case on behalf of a client.

    In EPO oppositions if an opponent does not plead a ground of opposition in the opposition statement, then an omitted ground cannot be relied on later on. So normal practice is to make a case on every ground possible.

    Obviously frivolous grounds should not be pursued, but as full a defense must be made as the facts permit.

  8. I know that reexam was frequently viewed/utilized at firm I left two+ years ago as a lever/pressure tool irrespective of the merits of the case, and firm “leadership” made no bones about that fact. Some sort of correlation between reexam and litigation practices might prove to be illuminating

    1. The added cost of a reexamination or IPR is vastly smaller than multiple motions and discovery abuse can cause.

  9. Professor Crouch:

    This is troubling. 3M and GE’s point cannot be remarkable to you, can it? Surely not. Although I have to say, with all due respect, I guess it isn’t surprising given the amount of anti-NPE propaganda that is set forth here and from other sources based on the flimsiest of evidence (e.g., a lot of companies that don’t practice the patents file a lot of lawsuits against large corporations that do develop products, so that means the NPE must be filing a lot of frivolous cases). Somehow, here and other places, it has become fact, which it is not, and new phrases are born like “abusive litigation,” because the promotors cannot prove, of course, that the litigation they seek to stop is frivolous.

    But I digress. 3M and GE are absolutely correct. And their point should not be surprising in the slightest bit. The vast majority of companies that get sued for patent infringement have the financial resources to execute the very strategy that 3M and GE refer to. They also have the incentive to do it, because they don’t want to pay. And they do it all the time. Everyday.

    You want to study that? I don’t know what to say. If you actually want to find the answer, you would need to do a case-by-case analysis. And even then, unsurprisingly, lawyers are smart and there is a lot of grey in the law, so coming to a conclusion that defendants engage in frivolous litigation tactics against NPE’s is likely to be as difficult to pin down as the silly concept that NPE’s engage in frivolous litigation against large corporations (although through an avalanche of foolish, fraudulent, and frankly, embarrassing arguments and “evidence,” the latter has become factual.

    The bottom line is that you won’t find more decisions finding large defendant infringers’ conduct is sanctionable then you will in trying to find sanctionable conduct on the NPE front.

    Most patent litigators have worked both sides of the docket (an unusual phenomena in litigation), so you should speak to those folks. They will tell you (if they are being candid) that GE and 3M are correct.

    1. In response to: “The vast majority of companies that get sued for patent infringement have the financial resources to execute the very strategy that 3M and GE refer to. They also have the incentive to do it, because they don’t want to pay. And they do it all the time.”
      I think you will find that in a surprisingly number of patent suits the primary incentive to “run the meter” on the litigation costs with unnecessary motions, discovery, and other burdens is from the litigation firms [getting paid up to $1000./hr these days], rather from than their clients who are paying for that. The fault of those clients in such cases is in failing to adequately control their outside counsel costs.
      While in either case being required to pay the other side’s legal fees for objectively unreasonable litigation seems appropriate, how much can it really affect such behavior when less that 3% of patent suits ever even go to trial?

      1. Keep in mind Paul the “unintended consequence” of any such “Loser pays” rules going into effect will be the exacerbation (not the lessening) of “The fault of those clients in such cases is in failing to adequately control their outside counsel costs

        When the winner prevails no matter the costs, well, the costs won’t matter nearly as much as winning.

        This, too, should be common sense.

      2. Paul raises a solid point with “when less that 3% of patent suits ever even go to trial?

        And actually, the number is far less than 2% of all active patents.

        Someone else stressed this point in the past… (only to see either dust kicked or the point ignored in the “Troll hysteria mongering).

      3. Paul, I agree with you that litigation counsel will recommend piling costs on the plaintiff not only for the client’s benefit but for their own. But that does not mean that a sued company does not want to impose as great an expense on the plaintiff as possible in order to force a settlement within reason. Furthermore, quickly getting to a decision where the amount of damages at issue greatly exceeds the litigation costs in question is foolhardy for the concerned executives and for the Board of Directors.

      4. Paul, there is another problem that corporate executives face and it this: outside counsel will argue they can obtain a lower settlement by litigating, especially if the patent owner’s case looks week. The executive, not being the expert, will rely on litigation counsel not to settle but to litigate. But once the case starts, calling a halt is all but impossible. In the end, in a typical case, the settlement value is unchanged. Only defense counsel benefitted.

        I got this from an experience district court judge who had years of experience litigating against large-firms. The pattern, he said, was repeated in every case. Every one.

        Sophisticated companies can avoid this problem by placing patent settlement matters in the hands of experts who can independently assess the strength of the patent case, and then choose themselves whether to settle or to litigate.

      5. You’d be wrong. When you know the other side’s financials, no one resists bankrupting them with frivolous actions. It’s way easier than getting to the merits of the case and risking losing.

    2. PJ: Professor Crouch:

      This is troubling. 3M and GE’s point cannot be remarkable to you, can it? Surely not.

      PJ, if Prof. Crouch does not understand the point made in the GE and 3M brief, I find it remarkable as well.

      There is an aphorism that I use that seems as true as it can be, what can be abused will be abused.

      The primary tactic in patent litigation has always been delay in order to impose expenses on the patent owner to force a settlement. There may be exceptions, but this is the general rule. The amount in controversy is generally large enough to justify the tactic to the CEO and the Board of Directors. Trust me, massive litigation defense costs do not go unnoticed by the bean counters.

      Moreover, quickly getting to an issue on the defense side is foolhardy. One knows in patent litigation that there is no guarantee of victory. Thus if one gets to a decision early and loses, the responsible executives may lose their jobs, while the litigation firm loses a case and that goes on their record. None of the involved executives or firms ever want a litigation loss.

      Therefore, I would recommend looking at how long the typical patent case takes from filing to determination, particularly including settled cases. The longer the case is pending the greater costs to both sides. Next, let’s look at who is imposing costs.

      Look at the number of motions of all kinds, and by whom. I would think that the vast majority of motions will be proffered by defense counsel.

      Dennis, I don’t know how many times I have mentioned to you but the reason that defense counsel do not like rocket dockets is their speed. This suggests an obvious remedy to patent litigation costs: statutorily setting trial a specific time after the filing of a lawsuit. Everything else will take care of itself.

      1. Well, in a case I was directing, when the news broke that Larry Ellison had secured the majority interest in the defendant corporation, and knowing his scorched earth tactics, we settled for far less than entitled. Part of the big game.

    3. the silly concept that NPE’s engage in frivolous litigation against large corporations

      That’s already been “pinned down.”

      Man, it’s hilarious watching the vested interests play their usual false equivalence games.

      “It’s the defendant’s fault we are sueing them with our junk patent!”

      Geez, do they really think people are that dumb? Oh right: we’re all just jealous of those wealthy, money-grubbing patent trolls.

      1. hilarious watching the vested interests play their usual false equivalence games

        sort of like [old steps] +[new thoughts]….

        LOL – there goes another irony factory: KA-BLOOEY.

        1. “hilarious watching the vested interests play their usual false equivalence games”

          sort of like [old steps] +[new thoughts]….

          What? That makes no sense whatsoever.

          But thanks for proving my point re: your abject stoopidity and nutcase false equivalencies, while simultaneously demonstrating your willingness to defend the worst of the worst junk that the USPTO has ever issued.

  10. Starting with counting pre-trial motions by each side, I think some meaningful patterns may emerge. Beware the initial skew as I think D’s file more motions than Ps inherently. Discovery motions, especially to compel, may be illuminating.

    The bad software patents of the 1980s and 90s, tort reform, and biglaw in patent litigation, combined with the rise of “tech” companies that didn’t do their due diligence have wrought something unholy, but temporary, on our system and the “fixes” are going to ruin it permanently.

    1. “The bad software patents of the 1980s and 90s, tort reform, and biglaw in patent litigation, combined with the rise of “tech” companies that didn’t do their due diligence have wrought something unholy, but temporary, on our system and the “fixes” are going to ruin it permanently.”

      Only if those “fixes” come out of Washington, DC!!

      “District court judges need to get control of their lawsuits instead of just hoping that one or both of the parties will tire of the time and money spent and settle before trial.”

      ^ That.

      Cheers,

      Steph

  11. Contrary to the 1982 plan, the Federal Circuit judges are not experienced attorneys. Until that deviation is corrected, patent litigation procedure will continue to he abused by all sides.

  12. Well, we could start with KSR and eBay and realize that a balanced approach (goose and gander) provides “the sense of the amici” is not only correct, but can also be labelled “common sense.”

    Then we could take a look at the approximately 2,600 posts made under the current software system (post Disqus) and see how many have been made by anti-patent people who have no facts to pound, who have no law to pound, and who merely pound the table of policy in ‘subjective in the mind’ or ‘intellectual honesty is not necessary for blog posts’ or those who support such in trying to portray the law and facts not as they are, but as they wish them to be. Take that percentage as indicative of a level of effort not to have a fair and balanced system.

  13. The name of the game is $$$.

    Nonetheless the brief above puts a nice slant in their argument.

    The brief is correct in that a fundamental flaw in the US system is the prohibitive cost of litigation (apologies for any disrespect to my US colleagues).

    However the slant used here is the characterization that the NPE behavior is “litigation abuse”. I would call it “pre-litigation abuse”, i.e. it can win without the large expenditure incurred during actual litigation (e.g. showing up in court, preparing evidence, depositions etc. – don’t focus on semantics here).

    It seems to be a misdirection tactic to demand one contrast two types of bad behavior for which one is worse. In my opinion they aren’t related (BOTH sides in actual litigation can and do play the diversionary tactics tactic – when desired, yet the NPE can win without even getting to court, and has an inherent advantage of having no products for which it can be sued).

    1. Ely: It seems to be a misdirection tactic to demand one contrast two types of bad behavior for which one is worse. In my opinion they aren’t related (BOTH sides in actual litigation can and do play the diversionary tactics tactic – when desired, yet the NPE can win without even getting to court, and has an inherent advantage of having no products for which it can be sued).

      Of course it’s a misdirection tactic. That’s all these guys got is misdirection, false equivalence and blaming their victims. You think they’re going to actually make substantive arguments with convincing evidence while the junk patents continue to flow out of the USPTO at record rates into the hands of attorney “inventors” ready to “monetize” their junk by any means possible (while they spit insults at the “jealous” little people who aren’t raking it in)? Please.

      1. Malcolm continues cavorting with KA-BLOOOEY’s with “That’s all these guys got is misdirection, false equivalence and blaming their victims

        “B-b-b-ut this is only a blog so why does Malcolm have to be intellectually honest…?”

        1. Malcolm continues cavorting with KA-BLOOOEY’s

          No, it’s you who is cavorting with KA-BLOOEY’s!

          Fun game! You’ll start the next round as usual, Trollb0y? Of course you will.

    2. Hasn’t the AIA exacerbated the Troll controversy? If a reissue petition is going to cost $25,000, why sue the big guy? Take the hint from RIAA and go after a lot of little guys at $5000 a pop. Again, unintended consequences.

        1. I meant, re-examination in my remark. Reissue is typically self inflicted, like falling on one’s sword. Modern re-examination can be forced by anybody. But, really, can’t we have a royalty board that metes out even incidental checks for apparent patent infringement at some level?

          Just because a thousand patents may legitimately cover the smart phone, doesn’t mean there should not be some meaningful share in the rewards for a small contributor.

  14. In particular. Look at court findings where in discovery sanctions motions brought by plaintiffs, the defendant argues that no prejudice has resulted and the court refuses any sanction. In my experience, courts do not enforce the rules and this emboldens defendants.

  15. Other than real world experience, what would you like?

    In the Phoenix-Wells Fargo case (CD Cal) the defendants insisted, through several months, motions, and hundreds of man hours, that there was “inequitable conduct” in the prosecution. Never mind that the “reference” they claimed was not cited, was IN FACT cited, that did not make any difference. The merits of their position were irrelevant sla as they could keep filing paperwork to distract from the main issues.

    All of this occurred long before there was any action on the merits. It was just a tangential, scorched earth defense by one of the many defense attorney abusers of the system.

    Its all public record so you can see for yourself.

    These activities have no real purpose except to try and drive up our costs and milk their own client. Defense attorneys love patent cases b/c there are more than a dozen defenses, and none of them is too trivial that they can’t “sell” it to the client to pursuit to the ends of the earth.

    I’ve been doing patent litigation for 25+ years, and this scenario is repeated now regularly. After the ” otherwise underemployed generic commercial litigators” found the patent defense goldmine in the mid 90s, everything turned upside down. The Medimmune case gave them license to initiate litigation at the drop of a hat, further lining their pockets. I have no doubt that any formal survey will reveal the biggest perpetuators of “vexatious” litigation are overzealous defense counsel who know that these cases are cash cows.

    Indeed, b/c small patent owners have to work with contingency counsel, the latter are very efficient at conducting cases and do everything possible to streamline and expedite the proceedings. They have skin in the game and have no guarantee of payment so they are far more judicious about abusing judicial resources.

    1. irrelevant sla as they could keep filing paperwork to distract from

      LOL – that is one of the proxies so often employed by the anti-patent posters across these many threads at Patently-O.

    2. Dennis, the following from Mr. J Nicholas Gross is important to understand,

      “[C] ontingency counsel … are very efficient at conducting cases and do everything possible to streamline and expedite the proceedings. They have skin in the game and have no guarantee of payment so they are far more judicious about abusing judicial resources.”

    3. Thank you for your excellent direct experience observations.

      Your mention of “The Medimmune case” suggests an excellent subject for another statistical study by Dennis. Namely, did Medimmune really lead to a big increase in D.J. suits against patent owners, as some had feared at the time of that decision? [Relative to the number of patent suits initiated by patent owners.] Also, do S.J. suit location statistics suggest that controlling venue [to get into a court like C.D. CA rather than a rocket docket or E.D.TX] may be a major factor? Has the availability of IPR in this last year reduced S.J. filings?

      1. Paul

        In fact Medimmune resulted in NPEs filing more lawsuits, b/c they did not want to be subjected to DJ jurisdiction first in defendant’s favorable forum. The result is a “shoot first” model of doing business imposed on all patent owners.

        1. I remember the conversations in my old firm of “sue then send letter” because of the Medimmune case. It took all control away from patent holders, and like you said, definitely made it shoot first, talk later.

    4. In the Phoenix-Wells Fargo case (CD Cal) the defendants insisted, through several months, motions, and hundreds of man hours, that there was “inequitable conduct” in the prosecution

      Because Nick is really ethical and would never, ever, ever do withhold information to obtain a patent, even if the patent was a piece of a total junk that a kindergartner could tank of summary judgment.

      Its all public record so you can see for yourself.

      Indeed it is.

      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.

      I’ve been doing patent litigation for 25+ years

      So has Ray Niro. Nobody is impressed but we all know that you guys impress each other on a regular basis. What’s that term you used, Nick? Clerkle nerk or something like that?

      1. Seems a lot like Malcolm’s own behavior on this blog.

        Oh wait, there is ‘no need for intellectual honesty because this is just a blog‘…

        /eyeroll

        1. there is ‘no need for intellectual honesty because this is just a blog‘…

          Says the nutcase blogtroll who makes up quotes in a desperate attempt to redeem his nutcase self.

          What is your attraction to this nutcase, Dennis? I mean, it’s not as if there aren’t a hundred other equally inane txxbaggers out there who could take his place without the pathological lying. Sheesh.

          1. LOL – are you flat out denying that you said that you don’t see a reason that you have to be intellectually honest because this is only a blog and not a court of law?

            Really?

            Let’s set the record straight Malcolm and here you give an affirmative, non-deniable statement that it is NOT proper to be intellectually dishonest on a blog.

            Then let’s see you live up to that statement by stopping your typical low quality blogging techniques.

            Waiting…

    5. Having been in the game for 45+ years, I am surprised that even top notch firms make these false and easily disprovable claims (read the file history) to defame both inventors and their prosecuting attorneys for tactical advantage.

  16. Paw thru motion practice in patent cases. Categorize the various schemes found…
    See if counsel can/will volunteer the number of “meet and confer” demand letters made, and answered, in such cases, and how many resulted in follow-up motions…

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