by Dennis Crouch
The Supreme Court is wrapping up its 2019-2020 term within the next couple of weeks. I’m expecting a decision in the trademark case of USPTO v. Booking.com during this time. [updated]. A second IP case to be decided is Google LLC v. Oracle America, Inc. (copyrightability and fair-use for programming language function calls). However, the court postponed oral arguments until next term (October 2020). In addition, the court’s actions suggest that it may dismiss the case on procedural right-to-jury-trial grounds. In particular, the court asked for additional briefing on the standard-of-review for a jury determination regarding fair use.
Prior to the end of June, the court is likely to rule on a number of patent-focused certiorari petitions:
- Retroactive application of IPR – Due Process + Takings claims. Collabo Innovations, Inc. v. Sony Corporation, No. 19-601; Celgene Corporation v. Peter, No. 19-1074; Enzo Life Sciences, Inc. v. Becton, Dickinson and Company, No. 19-1097; Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1204
- Limits on Doctrine of Equivalents. Hospira, Inc. v. Eli Lilly and Company, No. 19-1058; Dr. Reddy’s Laboratories, Ltd. v. Eli Lilly and Company, No. 19-1061; CJ CheilJedang Corp. v. International Trade Commission, No. 19-1062.
- Eligibility. The Chamberlain Group, Inc. v. Techtronic Industries Co., No. 19-1299.
- Undermining Prior Final Judgments with IPR decisions. Chrimar Systems, Inc., v. Ale USA Inc., No. 19-1124.
- Mootness of ITC case regarding expired patent. Comcast Corporation, v. ITC, No. 19-1173.
- Thryv follow on – likely to be dismissed. Emerson Electric Co. v. SIPCO, LLC, No. 19-966.
In addition, petition-stage briefing is ongoing in a handful of patent cases.
- Right to Jury Trial to set ongoing Royalty Rate. TCL Communication Technology Holdings Limited, v. Telefonaktiebolaget LM Ericsson, No. 19-1269.
- Standard for Prevailing Party in voluntary dismissal. B.E. Technology, L.L.C. v. Facebook, Inc., No. 19-1323.
- 271(g) Elements of Infringement. Willowood, LLC, et al. v. Syngenta Crop Protection, LLC, No. 19-1147.
OT, but important since many comments here have been about patent owners who complain that they cannot afford the cost of suing infringers, there is today a Gene blog and an IPO program announcement saying that “Litigation financers are ready to step into the breach with investments to pay attorney fees and expenses related to patent enforcement in return for hefty returns if the litigation successfully results in damages. Due to an inflow of new capital, about 40 commercial litigation funders are now active in the U.S. market, with combined assets under management estimated at $9.5 billion. Those funders also work directly with corporate or university patent owners to pay legal fees.”
>>OT, but important since many comments here have been about patent owners who complain that they cannot afford the cost of suing infringers
Perhaps I’m skipping too many comments these days, but I don’t recall this being a frequent complaint on this board. Certainly not relative to frequency of comments regarding the cost of defending a patent in an IPR.
Ben, yes, there have been complaints about the cost to patent owners of defending against an IPR, which can be $150K+. But that IPR cost is actually peanuts compared to the normal litigation costs of a D.C. suit on a patent. Especially since an IPR has limited discovery and very limited issues compared to patent suits.
[With cost-saving exceptions for patent suits in which the defendant quickly pays a settlement to get out of it that is acceptable to the patent owner, or the defendant gets lucky with an early 101 decision or a non-infringment summary judgment, or the suit gets stayed right away for an IPR Petition and the IPR gets declared and then has a final decision eliminating all infringed claims, or there is a cross-license trade.]
Its $450K average. $750K for a strong connected firm that knows all the tricks and hangs out with the PTAB judges. 68% of patents are instituted by one of the petitions files against it. Claims are lost in 85% of patents that get a final decision.
That cost is in addition to district court. It is not cheaper. The inventor must pay for both.
With respect to litigation financing is only available for very large portfolios with $100M+ in damages. They budget to lose 80% of the claims for invalidity, so the lucky inventor that gets a deal usually loses his patent and profit. The investments are mostly going to the divested corporate portfolios, not independent inventors.
Inventors are not hopeful and they should not be. Their chances of seeing a profit from patenting are much less than by playing the Powerball lottery.
The economics analysis has nothing to do with innovation or inventors. Hedge funds are trading paper and occasionally “foreclosing” on the underlying asset by filing suit. The various costs get lumped into the valuation. The profit and loss is made at the margins.
Josh, do you have a current number handy for the % of D.C. patent suits against which an IPR petition is filed against the patents? Last I heard it was only about 1 out of 4? And the vast majority of all patent suits are settled before trial, most with some financial payment to the patent owner to avoid defendants litigation costs [which can be much higher than for patent owners at that point].
Yes, some professional litigation financing firms have admitted they are not interested in financing patent suits where the likely infringement damages recovery is not going to be many millions of dollars. And yes the odds of their winning that kind on cash by a lawsuit are not great, especially because those are large defendants which will fight all the way rather than settle for such a large amount. [Also a litigation financier would want to see if the patent can pass a preliminary validity evaluation.]
Part of the reason for preferring investments in patent litigation for patents acquired from corporations [rather than from private inventors] is a concern for the higher odds of private inventors suing their attorneys or investors. As I am sure you are aware, there are a number of major IPL firms that will no longer even take private inventors as clients.
“is a concern for the higher odds of private inventors suing their attorneys or investors.”
Paul — I hadn’t heard of this (potential?) factor previously. Are you, Josh (or any other readers) aware of any such actually-filed suits?
Thanks.
Pro Say, one such small inventor suit against his attorneys was noted by someone right on this blog on May 19. As reported in an ABA Journal article: link to abajournal.com
I have been told of others by law firm partners and malpractice insurance agents. There have also been two published reports over the years of patent attorneys being shot by irate private inventor clients, one was in Chicago, news items that certainly got my attention at that time.
Paul, your link gave me a “404” message.
Thanks Paul. I should have been more specific.
While I’m of course aware of there being suits of the type you point out (including the one blogged on May 19th), what I was wondering was whether anyone knew of any atty / investor suits where litigation financing was involved (appreciating the fact that such financing is often not public) . . . in order to support the proposition that such suits have reduced private inventor IPL funding.
Any IPL specific / particular (no attty’s named) suits?
Thanks.
I can bring several dozen clients to the attorney that is willing and able. I know for certain the inventors are following the law and best practices and are not to blame for the failure. The patent application and enforcement is the next stage of the invention promotion scam. The inventor doesn’t figure out the game until they’ve lost everything – business, savings, home, family, health. It is devastating to be scammed by lawyers and the government.
>> But that IPR cost is actually peanuts compared to the normal litigation costs of a D.C. suit on a patent.
I wasn’t disputing this. I was just noting that I didn’t recall many people complaining about the cost of suing infringers.
Ben >>>I was just noting that I didn’t recall many people complaining about the cost of suing infringers.
Sure. Now tell us the one about you not recalling anyone complaining about Alice.
I am going to go w a a y y out on a limb and hazard a guess that none of these will be picked up by the Supreme Court.
Now that is w a a a y out on a limb.
Thanks Dennis!
The 3 law professor’s amicus brief makes a good argument for deferential jury fact-finding on “fair use.” But even that brief notes that:
“..U.S. Bank Court recognized that even under a deferential standard, appellate courts may articulate legal principles to guide
juries and judges. U.S. Bank, 138 S. Ct. at 968 n.7 (explaining that under the clear-error standard, “if an appellate court someday finds that further refinement of the . . . [substantive law] standard is necessary to maintain uniformity among bankruptcy courts, it may step in to perform that legal function”).”
Does that open up another [unmentioned] issue? As to whether or not the D.C. court gave proper jury instructions on copyright “fair use” law in this case? Would the Fed. Cir. have been entitled to reverse the jury finding here on that basis?
Dennis, thanks for noting that “the court asked for additional briefing on the standard-of-review for a jury determination regarding fair use” in the delayed Google v. Oracle. Is there more information on that? Was it argued in academic amicus briefs?
The amicus brief by Prof. Ned Snow goes through these issues.
link to papers.ssrn.com
link to supremecourt.gov
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