By Dennis Crouch
Others have pointed this out in the past, but today’s NYTimes editorial on fee shifting is fairly low in truthiness.
Today’s major debate in the Senate is whether judges should be given discretion in the choice of whether to award attorney fees at the conclusion of patent litigation. The basic idea is that the threat of fee shifting will discourage a party from filing a claim or defense that has only a low chance of winning. That idea makes sense, but it turns out that the actual impact of fee shifting is not well understood – especially if it is balanced (awarded to prevailing party, regardless of whether that is plaintiff or defendant) and if done on a case-by-case (entire lawsuit) basis rather than claim-by-claim.
In essence, the fee shifting substantially increases the litigation-stakes – in the end, this may well favor plaintiffs so long as they can engineer a financing structure to manage the risk and essentially take advantage of typical risk adversity of accused infringers.