Patent Case Filings: Slow Start in 2014

The chart above comes from LexMachina [Link] and shows the number of lawsuits filed each month for the past several years. You’ll note that the number of case filings in January 2014 is the lowest since October 2011. The rise in filings since 2011 is largely (if not completely) explained by the joinder provisions of the AIA that block a patentee from filing suit against multiple unrelated parties in a single lawsuit.

This week Steve Morsa sued Facebook on his match-engine-marketing patents. See U.S. Patent Nos. 7,904,337 and 8,341,020; Adidas sued UnderArmor for infringing twelve of its patents covering location-aware fitness devices. See U.S. Patent Nos. 7,292,867 and 7,805,149; and Dyson sued Euro-Pro for infringing its U.S. Design Patent No. D668,010 that appears to cover the Dyson Digital cordless vacuum.

56 thoughts on “Patent Case Filings: Slow Start in 2014

  1. MM: “Patents are powerful entitlements granted by the government to a rarified group of applicants under very special circumstances. The public has every reason in the world to know who are the recipients of these very special government-granted rights, rights which can asserted against anyone at anytime with occasionally devastating effects on the lives of the targeted entities — entities which are increasingly likely to include individuals like you and me, our families, and our communities.”

    Malcolm, your consistent argument that patents are dangerous public rights is equivalent to an argument that patents are guns and that the public has a right to know who owns guns so that they might be careful to avoid being near such people.

    I think the problem is different. I think the public as an obligation not to infringe a patent and it does it make any difference to this obligation who owns the patent. You make it seem as if the ownership of a patent made some difference to one’s obligation to respect the patent and the patent system. This is fundamentally incorrect thinking.

    That said, I see some merit in allowing damages only to a record patent owner. I can see some puzzlement if one receives a notice of infringement by somebody who is not the record owner. Just how does one respond? Certainly one cannot simply take out a license with somebody that is not clearly the owner of the patent.

    Thus I would deny all damages to anybody who is not the record owner as a sole and exclusive remedy to this particular problem. Thus if I were approached by somebody who is not the record owner, I could simply respond that even if I thought your patent is valid and that I might infringe, I cannot reliably take out a license with you because I am not assured that you own the patent.

    1. Ned,

      To Malcolm, patents are worse than guns. They are the WORST THING EVAH.

      He really needs to get into a profession in which he can believe in the work product he supposedly produces.

      As to the rest of what you write, I comment you as it seems like a clear and well-reasoned position. How would you feel about a constructive trust and prevention of continued transgression if a perpetrator is shown or does admit to patent infringement?

    2. one’s obligation to respect the patent and the patent system.

      Why am I “obliged” to do that when the patent system is broken and corrupt from top to bottom?

      “People” would have much more respect for the patent system if the entitled microfraction of the population who live to exploit the system were subject to some reasonable regulation and transparency.

      You make it seem as if the ownership of a patent made some difference [to a potential infringer deciding whether to infringe or not]

      This is an example of you projecting your own biases into the mix. In fact, like nearly everybody in the country, I could care less whether Google sends 20,000 threatening letters to businesses across the country asserting some junk patent or whether J Mac Rust sends those letters.

      Everybody benefits by knowing who is in charge of making the decisions so send those letters, however. And eveybody benefits by knowing what other government-granted entitledment are owned or are being sought by the sort of person who would engage in that activity. Do you really need me to explain to you why that is the case, Ned?

      The public has a right to this information. The reason that a certain class of patentees is objecting so vociferously to the requirement has nothing to do with “complications” or “costs” and everything to do with avoiding public exposure while they exploit and demolish a public agency and a public system.

      1. Why am I “obliged” to do that when the patent system is broken and corrupt from top to bottom?

        Well for starters, because you as an individual don’t get to make the call of what is controlling law, and what is or is not “broken and corrupt” and what can or cannot be followed.

        Rule of law – real lawyers have a certain minimum respect for it. Perhaps you have not sworn such an oath before a State Supreme Court…

        The public has a right to this information.

        Because Malcolm says so – the RQ/HD strikes again.

      2. MM: “Everybody benefits by knowing who is in charge of making the decisions so send those letters, however. And eveybody benefits by knowing what other government-granted entitledment are owned or are being sought by the sort of person who would engage in that activity. Do you really need me to explain to you why that is the case, Ned?
        The public has a right to this information.”

        Malcolm, I don’t think one can properly be placed on notice unless the notice identifies the patent owner and that patent owner is the record owner. Someone has to raise this issue in court. A court ruling along these lines would stop dead in his tracks every effort to hide the patent owner.

        Regarding who is calling the shots, what difference does it make if the record owner is a subsidiary or if the record owner is a parent? All one really has to do is deal with the record owner.

        As for determining risk, I would agree in principle that if a patent is a hands of certain people as opposed to other people there is a greater risk. But I think it is now a given that companies of all sizes are scouring their portfolios for patents that might be asserted and are “selling” them to enforcement entities. Thus I would think a wise company would not assume it can safely infringe a patent simply because it is held by a competitor who is not cross licensed.

        1. Ned,

          I think your attempt at a distinction fails.

          It comes down to a simple point. Being put on notice that you are engaging in patent infringement does not require you to be put on notice as to who owns the patent right. It is simply enough – to be put on notice – to be notified that you are infringing. Infringement is still a strict liability offense.

          To use a simple analogy: a burglar Mr. Z trespassing in someone else’s mansion is caught by the police. The police do not have to establish that the mansion is owned by either Mr. Y or Mr. X. All that is required is that Mr. Z not have a right to be in the mansion.

          As I have posted, existing rules of law already govern the filing of suit (i.e. the requirement of standing) and those existing requirements are sufficient.

          1. I am reminded of our separate discussions concerning the ‘pirate’ effect and the AIA’s elimination of 102(f) – as I recall, my view there better accords with the notion of standing that still must be met to bring relief.

          2. anon, OK, then, the law ought to allow a DJ action against the record owner. If the real owner doesn’t show up to defend and default judgment is taken, the real owner loses.

            1. How would you ‘police’ that Ned?

              If a real owner does not know that a pirate has taken action, and that the pirate loses a default judgement?

              You are opening a can of worms on sham pirates and actions that impact real owners without any notice.

              The filing of assignments in the Office is done without the Office verifying the veracity of the filed documents.

              Did you know that?

              In other words, the scenario you present can be severely abused in the following manner:

              Scoundrel A pays Scoundrel B under the table to file a false assignment. Scoundrel B rattles a saber at Scoundrel A prompting an apparently legitimate DJ action. Scoundrel B with never an intention otherwise, defaults on the summary judgement (Scoundrel B vanishes into the wind, untraceable), and now Scoundrel A is DJ-proofed against the actual innocent Patent Owner O, who never had notice of any of the ongoings.

            2. ahhh – and how do you police privity when the Office does not inspect any filings in the assignment recording function that it performs?

              Try your hand at the hypo I present at the post at 4:58 pm.

            3. Anon, responding to the 4:58 post,

              Hype: Scoundrel files false assignment, notices infringement. DJ against scoundrel, with default.

              Is this binding on the true owner — who has not recorded his assignment?

              Well for one, the scoundrel is not in privity with the true owner, thus the default is not binding.

              If the scoundrel assignment did not come from the record owner, it is no good. If it did, his title is good against a non recording “true owner” provided the scoundrel is a BFP.

              This is why it is always good practice to record one’s title lest the patent be sold to another who records.

            4. While it is indeed to always record, you will note that my hypo puts the situation as false recordings done later and thus the real owner recording is completely immaterial to our discussion.

              Also note that while you now recognize a lack of privity, you have not addressed the ability – or lack of ability – to police this state in your initial fact pattern (to which my 4:58 pm post responded to). The abuse I point out can still happen unless you then went the extra step to litigate whether the now-vanished Scoundrel B was or was not in privity with Patent Owner O. We know in the case I laid out that he was not – but what if Scoundrel A claims that Scoundrel B was in privity? Which party has to prove otherwise? All of a sudden, your simple “real owner loses” post of 7.2.2.1.2 is not simple.

          3. Anon, think about it this way,

            Lawfirm sends you a notice of infringement, does not ID the client.

            You file a DJ against the record owner, notify the lawfirm.

            You get a default judgment.

            If the “real” owner is in privity with the record owner, he is bound. If the “real” owner is not in privity, he or has a defect in title.

            1. If the “real” owner is in privity with the record owner, he is bound. If the “real” owner is not in privity, he or has a defect in title.

              No – not necessarily known to the “real” owner and not necessarily in privity – you have not accounted for the policing of privity – or rather, the lack thereof by the Office when the Office accepts an assignment recordation request. You do know that the Office record is not necessarily binding on the ‘real’ chain of title, right? You do know that the Office does absolutely NO verification of the recorded assignment, right? You do know that the Office recordation expressly disavows any legal effect, right?

              You really should know and incorporate these things into your position.

              There may be no defect in actual title if the filing of assignment by Scoundrel B – who is not in privity with Patent Owner O – is the one who filed the false assignment (before he vanished).

              Again – try your hand at the hypo I present at the post at 4:58 pm.

  2. Could the horrible weather have had something to do with the January drop?

    link to dailykos.com

    It was the second weak jobs report in a row and could presage a slowdown in what seemed to be an acceleration of jobs growth in the second half of 2013. For all of last year, the economy added an average of 194,000 jobs a month. Seasonally adjusted growth in the past three months has been just 154,000.

    Many analysts are blaming January’s frigid weather.

    Also this:

    As the Economic Policy Institute has pointed out, to get back to pre-Great Recession levels by 2017, we need job growth of 285,000 a month. If that level could be maintained, it would mean the job recovery would have taken 10 years since the Great Recession began. In the post-World War II era, the United States has never gone 10 years between recessions.

    Cross y0ur fingers.

    1. Also, any thoughts on the order of comments. Right now I have the most recent top-level-post at the top. The only other current option is to have the first top-level-post at the top.

      1. First top level post at the top makes some sense because points are raised in chronological fashion and people occasionally start a fresh comment “off thread” that nevertheless copies/responds to earlier comments.

        Otherwise not a big difference.

    1. OT, but I thought a low below a previous low was not a ‘sell’ signal… Selling at a trough is a surefie loss generator.

    1. I am also reminded of the testimony given recently by Kappos (and others): let the dust settle from the AIA changes by charging forward (said in relation to the Goodlatte bill).

        1. Agreed.

          Kappos is a creature of IBM. While he does not take orders from them, he thinks as they do. A lot of what is in the new legislation is not in IBMs interests. In contrast, most if not all of the AIA was consistent with IBMs interests.

          Now we have the new deputy director, ex of Google, advancing a radical rules package that could have been drafted by Google. Who’ve thunk.

          1. Ned, think again – check out the responses to the Goodlatte bill.

            You are simply off in your view of what Kappos advocated in relation to that bill.

          2. a radical rules package that could have been drafted by Google.

            Or any of many millions of other people grown tired of the game-playing by patent trolls.

            Go ahead and propose Eric Spangenberg as the next USPTO director, Ned. Or maybe Gene Quinn.

            BWAAHAHAHAHAAHAHAHAA!!!!

            Excuse me, couldn’t help myself from laughing there.

            1. MM, patent ownership and business organization is no one’s business. To the extent we do not recognize an essential right of privacy, fundamental rights are simply not possible.

              Imagine that you personally had to identify yourself to post your views anywhere? We know where that would lead. Think Stalin, Third Reich and today’s Red China.

              You lump abusers in with the legitimate. Focus on the abuse and you and I see eye-to-eye.

              I see patents as property, inventions as worth protecting, infringers as pirates, and startups as having the most need for patent protection. The latter need investors. The patents are the only collateral to secure investments, and if the firm goes belly up, the investors need to enforce the patents.

              This is not a game. The enforceability of patents is important for invention, for jobs and for America.

            2. Ned: MM, patent ownership and business organization is no one’s business. To the extent we do not recognize an essential right of privacy

              “Patent ownership” and “business organization” are, in fact, two entirely different things. The vast majority of businesses have nothing to do with patents and the participation of a public, governmental agency is not a vital, critical part of their existence, or necessary at all. Likewise, these businesses function by providing products and services for which there is a demand.

              Not true of patents. There is no public demand for “patents” per se, unless you’re a bottom-feeding troll. Patents are powerful entitlements granted by the government to a rarified group of applicants under very special circumstances. The public has every reason in the world to know who are the recipients of these very special government-granted rights, rights which can asserted against anyone at anytime with occasionally devastating effects on the lives of the targeted entities — entities which are increasingly likely to include individuals like you and me, our families, and our communities.

              The system needs to be reigned in. We’ve left the sausage makers in charge of sausage inspection for far too long.

            3. There is no public demand for “patents” per se

              You really do not understand patents at all, do you Malcolm?

              The ‘what’ is already freely available to any and every one. Sorry that you do not like the law as it is and that patent infringement is a strict liability offense, but here’s a clue: don’t engage in patent infringement.

    2. Another point to consider in context: case law concerning DJ and the induced ‘file-suit-first-then-negotiate’ effect.

        1. Ditto and amen.

          Spoken like the True Believers they are.

          How’s the impeachment proceedings going, guys? Did you call your Congressman, Eric?

    3. The anti-troll legislation may not be necessary — or maybe should be postponed for a year or so to see how the dust settles.

    4. This drop is then quite relevant to those arguments.

      That’s true if the drop isn’t just statistical noise.

      There have been plenty of similar drops in the past, as you can see from the chart. And it was just a few short months ago when the highest ever litigation filings/month was recorded.

      But by all means cue up the patent teabxggers to inform everyone that “everything’s just fine! You can turn the lights off and let us get back to our important work of attacking the PTO for not granting enough patents fast enough.”

      1. MM. The drop suggests to me that the 2013 data is statistical noise and, although there are some good reasons for patent reform, the “sky is falling” is not one of those reasons.

        1. The drop suggests to me that the 2013 data is statistical noise

          Well, that’s a testable prediction and we won’t have to wait terribly long. A lot happened in 2013 to discourage the worst patent litigation stategery so it wouldn’t be a total shock if some “cooling down” occurred in 2014. On the other hand, I won’t be surprised if another monthly record is set before or around mid-year.

          although there are some good reasons for patent reform, the “sky is falling” is not one of those reasons.

          It would be unwise to wait for a complete and total disaster before taking corrective measures. For far too long, both the PTO and the courts have served as little more than whipping boys for the patent-grabbing crowd. Anyone can plot out the course being pursued and see where it takes us. If the entrenched entitled abusers of the system had their way, we’d just have a registration system and every business owner in the country would be required to pay some patent insurance just to put a foot on the bottom stair. After all, we can trust them. Right? They’re all really smart people, after all. “Innovators” I think is the term they like to use.

          1. For far too long, both the PTO and the courts have served as little more than whipping boys for the patent-grabbing crowd

            Translation: Let’s return to the Reject-Reject-Reject era.

            After all, we can trust them. Right?

            LOL – The guy with no intellectual honesty asks about trust.

            In other news, 4:19 am, the irony factory on Lexington and Fourth went KA-BLOOEY

  3. We should probably also keep in mind that the number of lawsuits should be normed against all active patents to put the picture in perspective (you know, context). In that context, the rate of suits (adjusted appropriately for the joinder effect) would likely show that the likely incident of patent suits has been dropping overall.

    (a hint for now: certain thought in the medical profession comes to mind)

    Further, we should be wary of falling into the trap of automatically thinking that ‘lawsuit’ means ‘bad.’

    After all, filing a lawsuit is the authorized way of enforcing patent rights and is not “THE WORST THING EVAH,” not even the second “WORST THING EVAH” behind the granting of a patent – no matter the diatribes so often presented to the contrary.

    1. We should probably also keep in mind that the number of lawsuits should be normed against all active patents to put the picture in perspective

      What “perspective” are you referring to and what purpose is achieved by presenting that “perspective”?

      For a better “perspective”, how about just show the number of patents being granted per year 2004-2014. And maybe show the rate of population growth in the US over that same time period. And possibly show income distribution change in the US over that same time period. And then a graph showing the economic status of the poor suffering patentees, who constantly whine about persecuted by everybody, over that same time period.

      You know, “context”?

      we should be wary of falling into the trap of automatically thinking that ‘lawsuit’ means ‘bad.’

      Nobody has fallen into that trap that I’m aware of. I am aware of people who have fallen into the trap of believing that “more patents” means “good”, however.

      1. Malcolm asks: “What “perspective” are you referring to and what purpose is achieved by presenting that “perspective”?

        Answer: a perspective of intellectual honesty cleansed of spin of the “Troll” boogeyman hysteria. By looking at an accurate picture of the rate of litigation per active patents, the hysteria that “Trolls” are running amuck can be brought back down to reality.

        I love the self-FAIL that you engage in Malcolm, as clearly showing that number of patents granted (as you so snidely suggest) works against your position, not for it.

        And your error continues to be displayed with your anti-patent CRP of “the trap of believing that “more patents” means “good,” as you do not recognize that such a statement is not a trap but a truth. More patents means that the system is working, that more Quid Pro Quo is being achieved. Of course, I will nip your asinine spin in the bud by noting that ‘more patents’ does not mean merely applying a rubber stamp of Approve-Approve-Approve. This has always been my position. This is my position. This will remain my position. Further, it is clear that only someone who does not understand what the patent system is for would think otherwise.

        1. Answer: a perspective of intellectual honesty cleansed of spin of the “Troll” boogeyman hysteria.

          And you’re the one we should trust to provide that?

          LOL.

          Hey, I’m curious. Are you joining the “impeach the judges who use monopoly and patent in the same sentence” bandwagon? Or is that too much for even you? Curious just because a couple members of your cheerleading squad seem really into that idea. Let everyone know exactly where you’re coming from, anon, and why.

          More patents means that the system is working,

          More deep thinking from the King of the Patent Teabxggers! Love it.

          1. Just as a liar believes everyone else always lies, Malcolm and his spin cannot see facts without spin.

            To wit: “And you’re the one we should trust to provide that?” indicates that he thinks that I personally would be providing something – as opposed to a cleansed view that is provided by the facts.

            You have lived in your filth for far too long Malcolm. The world – this world – does not operate as you operate.

            Intellectual honesty – try it.

            1. LOL – another Malcolm self-FAIL.

              I advocate from where I come from: intellectual honesty.

              Malcolm advocates from where he comes from: a lovely rubber-walled room.

              His major modus operandi: AOOTWMD.

              You really really really svck at this.

  4. Interesting: “The rise in filings since 2011 is largely (if not completely) explained by the joinder provisions of the AIA

    A case of changing the law and then turning around and (surprise) saying gee- look at the explosion, there must be a problem….

    The dust is settling. Which means that more dust-kicking will surely occur.

    What was that quote from Malcolm? Let’s see who will be kicking up the dust…?

    1. A case of changing the law and then turning around and (surprise) saying gee- look at the explosion,

      I seem to recall that there were related trends (ever larger numbers of defendants being joined) noted before the law was passed. A spike as a result of the law was predictable.

      It’s the continued rise that people are watching. That rise is evident from the graph.

      It’s impossible to make much of this spike. Dennis knows that. He likes throwing you little bones to suck on occasionally. Do you know why, anon? You should ask your li’l buddies. They always have very interesting explanations for that sort of thing.

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