Here is the outcome of a twitter poll on prisoner lawsuits. The poll was prompted by the pending lawsuit of Tormasi v. Western Digital. Tormasi is a patentee and has sued Western Digital for patent infringement. The district court dismissed his case and that finding was affirmed by the Federal Circuit. Both courts held that as a prisoner in N.J. state prison, Tormasi has lost his right to conduct any business, including enforce his patent rights. The case is pending on a petition for writ of certiorari before the U.S. Supreme Court.
In the spirit of being constructive, if I were theoretically giving the most helpful, disinterested advice possible to Tormasi, the below is what I’d say.
First, you have to assume, at least without hearing otherwise from him, that his overarching goal is to get out of prison as early as possible. Given that all of his challenges to the conviction and sentence haven’t panned out, the best chance for that now is the upcoming initial shot at parole. Even though he seems to have been a model prisoner in terms of avoid typical infractions, e.g., fights etc., I don’t think the unauthorized business activities are really helping his case much. You’d think at a parole hearing you want to put your absolute best foot forward. That’s especially true when you’re in jail on a murder beef. So I think every little bit counts and there’s just no benefit in upsetting the prison administration whatsoever.
Second, the inventive activity and entrepreneurship can be helpful I think, if done right. It seems like a great story for parole that he’s been using his time productively and thinking up a useful vocation that can support him when he gets out. The granted patent itself is proof of the merits and substance of what he’s done. But I wouldn’t go any further than that before he’s released. It’s annoying and frustrating for sure to have to sideline exploiting the patent for several more years, but it doesn’t seem worth it if you have to sacrifice the main goal of getting parole.
Seems like he should be able to move it to a trust for an attorney to manage.
Is this more disrespect for patents? If this were land that was being say strip mined by some company illegally, would the court be so callas?
A trust is an interesting idea, but I’m sure if it were that easy every inmate since the beginning of time would be doing it for asset concealment. Certainly in Tormasi’s particular case it won’t fly. Also the attorney would have to be up for patent litigation on contingency.
I don’t see any evidence prison officials are “discriminating” against patent rights, whatever that even means. The regulation is neutral on its face and applies to any business activity. We can quibble, but a realistic view is that asserting patents as a moneymaking enterprise belongs in that category. And I somehow doubt the prison officials hold a special grudge against patent assertion, let alone really know what it entails. They just take a dim view of any prisoner extracurricular activities, period.
“We can quibble, but a realistic view is that asserting patents as a moneymaking enterprise belongs in that category”
The facts in this case may well ascribe to your view, but I would hesitate to make such a view be a default one.
The nature of the patent right itself is NOT a “business” (whatever that means). One with property has a right [pun intended] to defend that property in a court of law (outside of any proper State mechanisms related to penal systems).
I think instead that the dynamics belong outside of patent law proper, and fall to property law and thus to each State’s dynamics thereof.
It’s a fascinating question, and I don’t think it’s possible to do it justice on a blog comment. That said, I will try.
I’m really struggling to think of ways in which patent assertion is not a business activity.
Patents are “personal” property, yes. But we all know that just distinguishes them from real property. (And nobody wants to do that by calling them “fake” property, I hope.)
Yes, federal law governs the exercise of the right and state law generally governs the transfer. But again, I don’t know how that pertains to the question under discussion.
I do think applying for a patent is something of a personal activity. There’s a bit of a debate going on currently, but at least until now, an inventor has to be a natural person. And inventors may have personal feelings and emotions about their patents and inventions. That is all true.
But when it comes to exercising the right, I’m at a loss to see how that’s not commercial. A patent is a gov’t sanctioned monopoly, and in turn monopoly is a marketplace concept. You have the right to exclude, but it seems quite different from the real property context.
With real property, it’s almost necessarily personal. You get into a dispute with a neighbor over a personal beef, or you sue a stranger for trespass for invading (I almost said invalidating!) your personal living space. Some argue the core of the 4th Amendment is protection of individual privacy.
Patent assertion seems quite different from the above. Even if you’re an NPE, you sue because someone is, e.g., making an unauthorized product. So the triggering action is in its nature commercial. In contrast, nobody trespasses on people’s homes as a business activity (or at least I hope not). And if a patentee also has practicing products it wants to protect, that makes it even more commercial.
The typical damages measures—reasonable royalty or lost profits—reflect economic activity too.
Moreover, as I just pointed out on the Modern Font Applications article yesterday, the law itself recognizes that licensing activity—which is just another aspect of litigation, as insignificant dallasite rightly notes—is considered a species of “commercial success” for the objective indicia.
I suppose you can imagine a very trivial example where a solo inventor retains a patent and then sues a personal acquaintance after learning that s/he is practicing the patent at home without permission for purely individual use. One could argue that is a “personal” dispute. But it also seems wildly unrealistic and fails to capture the overwhelming majority of actual cases.
Copyright is an interesting contrast. It came up a little in the CA3 case too. While copyright also has many commercial aspects, I think it has some personal ones that really aren’t present in patents. Damages are one example of that. You can have statutory damages for times when it’s not possible to measure damages economically. That seems to acknowledge that copyright infringement can at times reflect unquantifiable “personal” injury to the artist.
If anyone has thoughts on the above or counterexamples where patent exercise/assertion specifically (not inventorship standing alone) does exhibit a personal character, I would genuinely like to know. Thanks!
The exercise of the patent right leans heavily on the fact that THAT right is a negative right — and NOT a right in the positive sense of “doing something IN business.”
Perhaps this is a facet that you may not be appreciating deeply enough?
By now, I think my quantity of comments here exceeded the moderation threshold. So I’m not going to invest much time in anything further. But just briefly to this and your other point on licensing—
Negative right is an excellent point. I thought I covered that somewhat in the NPE example. To me, the right—a monopoly on commercial exploitation of an invention—is almost inherently business-related, whether or not it’s ever actually exercised.
We’ll have to disagree that licensing and litigation aren’t intertwined. But I think my point still stands that licensing is commercial—as a matter of law even—and litigation is done as a profit-making (or protecting) activity in any real-world case I can think of.
“the right—a monopoly on commercial exploitation of an invention”
Sorry but no – your ‘version’ of the right as stated here still sounds in too much of a positive right to conduct business.
Patents simply give no such affirmative right. That is simply not the nature of the patent right.
You can find tons of literature on the misuse of the term ‘monopoly’ precisely because of the imprecision of the attempted characterization. Any practitioner worth their salt would tell you that your view is askew.
“We’ll have to disagree that licensing and litigation aren’t intertwined. ”
The phrasing here too is a bit off. It is simply NOT a matter that licensing and litigation MAY become intertwined, and I never states that the two can not be intertwined.
You are confusing and conflating the nature of two different things.
Take this one step at a time, and understand the nature of each – separately.
The plain fact of the matter is that licensing MAY involve litigation (if things go astray) but critically MAY NOT involve litigation.
This then reveals that the primal nature of licensing is indeed separate from litigation.
And coming from the reverse direction also shows this: litigation happens for all types of things outside of licensing.
The difference in the nature of the right then comes into play: licensing itself is simply different than the patent right. For one with a patent right, there is NO requirement to even attempt to license. And for one with a patent right, litigation — completely without any involvement of licensing — is also a possibility.
The nature of “litigation” then — and as viewed in the sole context of the nature of the patent right itself — contains the ability to merely have one’s day in court to protect the property that one has.
Take a look (again) at that 1908 Supreme Court case (the Paper Bag case) and note that the nature of the patent right is recognized fully as a negative right – and the holder of that right has NO requirement for any positive action of any kind — it thus necessarily follows that “business” cannot attach to a property right that carries NO requirement of actually DOING anything.
This is LESS a case of “what you can think of” in view of why litigation to make profit (or protect), and MORE a case that you need to simply recognize that the instance of what you see does NOT define the individual and separate nature of the patent property right. Your notion of “MUST” for patents tied to business is a false one. Certainly patents MAY (and even most often are) be tied to business, but such does NOT define the nature of the separate patent property right. MANY things can be made the subject of business. This does not dictate that ANYTHING that can be made the subject of business is necessarily defined to be a business item.
“licensing activity—which is just another aspect of litigation,…”
This appears to be conflating several different things.
Enforcing one’s property rights is entirely separable from licensing activities – and licensing activities need not intersect with any form of litigation.
“nobody trespasses on people’s homes as a business activity (or at least I hope not). ”
False…think meth labs on farm land owned by others…
I’m really struggling to think of ways in which patent assertion is not a business activity.
And that is because patent assertion is a business activity. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (en banc) (“Patent infringement is a commercial tort, and the remedy should compensate for the actual financial injury that was caused by the tort,” emphasis added). This is a point scarcely in need of explanation to establish, although naturally I take no objection to the admirable work you did in laying out the argument for this self-evident truth.
Had a moment to look at the case that Greg provides.
It does not hold what Greg asserts.
Quite the opposite.
“Kelley further asserts that, as a policy matter, inventors should be encouraged by the law to practice their inventions. This not a meaningful or persuasive argument, at least in this context. A patent is granted in exchange for a patentee’s use of the invention. There is no requirement in this country that a patentee make, use, or sell its patented invention. See Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 424-30, 28 S.Ct. 748, 753-54, 52 L.Ed. 1122 (1908) (irrespective of a patentee’s own use of its patented invention, it may enforce its rights under the patent). If a patentee’s failure to practice a patented invention frustrates an important public need for the invention, a court need not enjoin infringement of the patent. See35 U.S.C. § 283 (1988) (courts may grant injunction in accordance with the principles of equity).”
Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1547 (Fed. Cir. 1995)
also
“An inventor is entitled to a patent by meeting the statutory requirements respecting disclosure of the invention. Prior commercialization of the invention has never been a requirement in our law to obtain a patent. An inventor is merely required to teach others his invention in his patent application. Thus, when faced with the question of whether a patentee was entitled to enjoin an infringer despite the patentee’s failure to use its invention, the Supreme Court held for the patentee. Continental Paper Bag,210 U.S. at 424-430, 28 S.Ct. at 753-754. Congress provided a right to exclusive use and to deny that privilege would destroy that right. Id. at 430, 28 S.Ct. at 756.”
Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1562 (Fed. Cir. 1995)
While it is certainly true that exclusivity MAY provide a window to which an affirmative set of actions could take place, the nature of the patent (and in fact, the notion that MOST patents are of the ‘improvement’ type, with the possibility that what is being improved upon may be patented by another, and thus, the secondary patent COULD NOT BE affirmatively practiced all on its own), contradict Greg’s desired takeaway.
One should not confuse a possibility among a set of possibilities as being de facto the epitome of the nature of the underlying property.
… his quote is actually from Newman’s concurrence, and thus, is merely dicta — and is actually meant merely as a segue to Dame Newman’s reaction AGAINST the majority opinion.
This is beyond p00r advocacy – it is misleading advocacy.
hardreader: anon said it well.
Characterizing patent enforcement as a money making business rather than protecting one’s property is where the “disrespect” lies.
And you just brushed over my analogy with strip mining and yet it is a good analogy.
Let me just back up and provide a mea culpa on one aspect. I overlooked that your criticism was directed at the “court” (taking that to be CAFC) and not the prison officials. So mistakenly I went on with an irrelevant discussion of the latter.
Now I can address the actual point you were making. It’s harder to say what was on CAFC’s mind, since the court isn’t as predictable as prison officials. This is pure speculation, but I’d guess it’s more that the majority doesn’t feel like indulging any litigation by a prisoner—especially one doing time on a murder beef and possibly violating prison regulations—instead of dislike for the particular nature of the litigation, i.e., patent assertion. I think that’s supported by the fact that he was also completely turned away by CA3, which hardly seems to have a dog in the patent fight. For sure, it may evince bias against prisoner lawsuits in general, which isn’t that wonderful, especially if it implicates constitutional rights, but as for bias against patents in particular, I just don’t see it.
As to your analogy, I didn’t engage with it, true, but it wasn’t by design. I was just focused elsewhere. Now I’ll try to address it. Again, this is more speculation, but I think CAFC—or any other court, since strip mining would seem to be out of CAFC’s jurisdiction—would likely behave the same way, for the same reasons given above. FWIW prison officials would definitely not care what the nature of the business was. They just don’t want anyone to even sneeze without prior approval.
I hope you’ll see that I’m trying to engage constructively here. Any specific feedback is very welcome and I’ll do my best to address it.
If he was sending out letters offering licenses to his invention I think we’d all have to agree he was engaging in a business. Litigation is simply the continuation of licensing negotiations with the addition of other means.
Ah, I see now where the train of thought above came from.
My statement above though has not such dependency on any type of business activity such as licensing efforts.
Such is not necessary to the nature of the patent itself (and the ‘right’ to protect those rights that attach to the property of a patent).
I think that for our hard reading (and in earnest) friend, taking these things one step at a time may be helpful.
Characterizing patent enforcement as a money making business rather than protecting one’s property is where the “disrespect” lies.
That is an odd notion of “disrespect.” Patent infringement is a commercial tort. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (en banc). There is no disrepect in noting that disputes over infringement are disputes about money.
The cobbler is paid for shoes and the greengrocer for fruits; no one thinks it disrespectful to observe as much out loud. Why should it be any different when one makes the same observation about the patentee? No reason at all, and that is why few consider it disrespectful to say so.
Disrespect (at a minimum) comes from misquoting a snippet from a concurrence as if that snippet was a holding of a case.
Especially when the majority opinion quotes from the 1908 US Supreme Court Paper Bag case several times.
When does a criminal offense ever result in automatic forfeiture of all property? Go to prison and lose: all real estate, vehicles, income derived from book/music/movie royalties/copyrights, patents, trademarks/name and likeness?
I agree with the dissent that the “no business” rule does not include the loss of the capacity to sue as a punishment and that other parts of the NJ Code expressly provide that “[i]nmates have [the] constitutional right of access to the courts.” Petition for cert is persuasive to me.
+1
Yes – this is the line of reasoning that my comments align with.
I think that the facts of each State would need to come into play to see what level of redress or access to the courts are affected by conviction and incarceration.
+1
OT, but the issue of software copying probably interesting with Trump.
One must wonder why a duplicate of Twitter and Facebook is not created by Trump.
He could instantly get 100 million members.
It’s really got nothing to do with software or other technological barriers to entry. TP wants Big Tech (they’re really media companies at this point, but whatever) to grovel before him. Starting a home brew version, while simple enough, doesn’t give him that result.
Not sure that I can agree with you here (as well).
A home brew version WOULD be a weapon to shove in the face of the likes of Twitter — especially given Twitter’s current business results.
Trump is not always about being effective – and I think that “shoving in the face” would fall to the mere act rather than any larger concern of effectiveness (that I may be inferring from your comment).
How do you know hardreader?
You have no idea what you are talking about.
hardreader stop yapping as if you know what you are talking about.
Tone down your posts. Stop yapping out shxt as if you are an authority and understand these issues. You clearly do not.
Meh, I may not agree with a bunch of what hardreaders has to say, but I find no offense in the way that he is saying it.
He appears to be in earnest, and appears to have at least thought about his position before he posts. He also appears willing to actually entertain opposing views put to him.
A lot of the regular anti’s would do well to emulate him.
So why are you defending him anon? He keeps directly contradicting what I post with no evidence and just brushes over what I say.
You have been pretty obnoxious lately too with your comments about the Scotus and Alice. You clearly do not follow the Scotus in other areas and so have no context with which to evaluate why the Scotus has ignore all these certs.
“So why are you defending him anon?”
meet:
“Meh, I may not agree with a bunch of what hardreaders has to say
The problem here is NOT me, Night Writer.
The problem instead appears to be that you are simply too thin-skinned. You have bristled when I disagree with you (and even jump out to assert “feelings” such as condescension that are nowhere present).
You are crowing at a guy that DOES try harder (than most any other regular) to actually engage.
Shush anon. The problem is you.
Lol – the black and white here clearly indicates otherwise.
Those are YOUR undies in that bunch.
The kind words are much appreciated. I’m also grateful for anon’s many thoughtful contributions to the discussion on this blog.
As I said, I do aspire to be constructive, but don’t always reach that goal. I’ll keep trying to improve.
meh, kind words, harsh words, – not my thrust, as I am fully capable of both – and both are fully legitimate.
I am more interested in the fact that counterpoints are being recognized – an attribute that I would LOVE to see more of (agreeing or disagreeing)
>One must wonder why a duplicate of Twitter and Facebook is not created by Trump.
What he should do is roll out a Mastadon (or other federated microblogging) node. High quality software and an existing user base already exist, plus he can control his own node.
Yes, some other nodes will block him, but those nodes only control their respective local users.
The whole genesis of this case was that he initially tried to do it that way—by forming a company to assign the patent to—but it was immediately shot down by the prison. So then he brought the case the individually.
While some can debate what activities qualify as “running a business”, a patent assignment is undoubtedly a contract and there’s a long-recognized, unquestioned prohibition on prisoners forming contracts. So that avenue seems like pretty much a nonstarter, as Tormasi’s own actions demonstrate.
Relatedly, Prof. Crouch, as master of this blog, can you please help my 3pm comment on the previous post escape from moderation imprisonment? (I think we’ve all somewhat become slaves to this topic, considering how many posts and comments it’s been occupying.)
In his prior attempts to assign the patent to a holding company, he was the sole owner of that company. Prison officials saw through that as a sham to evade prison regulations.
I wonder if Tormasi could just outright and unconditionally gift the patent to his brother or sister, with no right to receive any proceeds from it. This would make it harder for prison officials to argue that he’s “conducting a business” or “entering into contracts” with respect to the patents, when he’s completely and unconditionally divesting himself of them. But prison officials would probably be able to successfully argue that assigning the patent to a close family member is just another way for him to operate a patent assertion business through a proxy.
What all of this means is that Tormasi’s patent is effectively in limbo, a zombie patent that cannot be asserted and cannot be assigned while he’s incarcerated. He won’t even be eligible for parole until after the patent expires, and even if he gets parole, he may still be subject to restrictions that would limit what he can do with the patent.
I think at this stage nothing he can do will help him get out from the determination that he’s running a patent assertion business. Which seems right to me. And contract or no, the prior CA3 case about confiscating his patent applications and generally shutting down new filings seems like plenty good authority for blocking assignments too—whether for consideration or ostensibly from pure altruism for a family member.
Some might find it surprising, but I’m not actually shocked the consequences of committing a serious crime and going to jail for it can include being prevented from engaging in purely commercial activities. My advice to budding patent entrepreneurs would be don’t murder a family member—at least before your business gets off the ground!
Anyway, it’s true the patent will be expired 1 year before he’s eligible for parole, but there is the 6-year lookback window so it’s not a total deal-breaker. Of course, he has to actually be granted parole first. That might be a tall order. I’m skeptical they would still have such comprehensive restrictions even for a parolee, but admittedly I don’t know much about it. Martin Shkreli will be out around that time as well. I think they should collaborate. Something tells me they’d really hit it off. In a way, it seems like NJ should favor the patent assertion business—it could bring in some revenue for the state, and it’s not trading on his notoriety like Son of Sam etc. He could really make a killing!
There are questions though about if he could still go after WD. I don’t know if this kind of dismissal generates res judicata, or if WD is still even going to be selling the product(s) in question much longer. Certainly if they continue to do so, that creates a record amount of potentially willful infringement! Anyway, Tormasi has nothing but on time on his hands to research other targets.
To be honest, I think that blocking Tormasi from engaging in litigation activity might end up being a blessing in disguise for him. He actually has a decent shot at parole in 2026 given the highly unusual circumstances of his crime and the fact that he’s basically been a model prisoner since his incarceration.
But if Tormasi was permitted to engage in federal civil litigation, things could go south quickly, especially considering that he’s pro se. There are just too many opportunities for him to make a mistake, such as giving false or misleading testimony under oath during an inventor deposition, withholding something requested from discovery, or if there’s anything suggesting inequitable conduct in prosecution of the patent–anything like that could get back to a parole board and taint an otherwise clean prison record.
The district court’s dismissal of the lawsuit was with prejudice, so it will have some res judicata impact but it’s not clear if that would bar a later suit based on different products introduced after the judgment. In any case, I don’t think WD will be losing sleep over the possibility of Tormasi filing a past damages patent case if he’s paroled in 2026.
“Martin Shkreli will be out around that time as well”
Good ol martin. Shouldn’t have done his doins but overall an actually pretty decent dude. Always trying to get funding for the rare diseases that practically nobody knows about.
I wonder if he could simply sell the patent to a holding corp owned by his good bro/fam and let them sue.
I goofed and my #2 above was meant to be #1.1 in reply to this.
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