Last year, FindTheBest.com a company that specializes in information organization, was handed a patent-related lawsuit for violating a patent owned by a company named Lumen View. A small amount of research revealed that Lumen View was in fact a non-practicing entity, known to many as a patent troll. They were suing on the basis of a match-making algorithm patent they owned, and were trying to use this patent simply for the basis of making money.
This case was a prototypical patent troll litigation suit, in that the troll attempted to scare the legitimate company into settling and paying them $50,000, a strategy which usually works due to a company's unwillingness to shell out lawyer's fees and time in fighting the case. However, FindTheBest decided that they were not willing to be taken advantage of and decided to fight this case. This resulted in a complete dismantling of the patent held by Lumen View. By fighting the case, FindTheBest was able to prove that Lumen View's patent should be deemed invalid since there is no originality or inventive step.
The interesting part of this is that FindTheBest has now filed a motion asking for Lumen View to pay their attorney's fees. Though this is something that recent court cases have definitely been supporting, as a means to prevent frivolous lawsuits such as this one, there is one key problem that is not being addressed. The structure of these patent trolls is such that as soon as they are asked to pay any money, they can immediately dissolve themselves and file for bankruptcy to avoid having to do so. Since these companies don't actually do anything, there is no cost to them of filing for bankruptcy and so, they can completely avoid having to pay lawyers' fees. This is a problem that the Supreme Court must address in future lawsuits, since by failing to discuss the penalties that patent trolls actually pay, they allow for this huge problem which is undermining the intellectual property protection system in the United States today.
Source: http://arstechnica.com/tech-policy/2014/05/findthebest-may-be-first-to-gain-from-supreme-courts-patent-fee-ruling/
This case was a prototypical patent troll litigation suit, in that the troll attempted to scare the legitimate company into settling and paying them $50,000, a strategy which usually works due to a company's unwillingness to shell out lawyer's fees and time in fighting the case. However, FindTheBest decided that they were not willing to be taken advantage of and decided to fight this case. This resulted in a complete dismantling of the patent held by Lumen View. By fighting the case, FindTheBest was able to prove that Lumen View's patent should be deemed invalid since there is no originality or inventive step.
The interesting part of this is that FindTheBest has now filed a motion asking for Lumen View to pay their attorney's fees. Though this is something that recent court cases have definitely been supporting, as a means to prevent frivolous lawsuits such as this one, there is one key problem that is not being addressed. The structure of these patent trolls is such that as soon as they are asked to pay any money, they can immediately dissolve themselves and file for bankruptcy to avoid having to do so. Since these companies don't actually do anything, there is no cost to them of filing for bankruptcy and so, they can completely avoid having to pay lawyers' fees. This is a problem that the Supreme Court must address in future lawsuits, since by failing to discuss the penalties that patent trolls actually pay, they allow for this huge problem which is undermining the intellectual property protection system in the United States today.
Source: http://arstechnica.com/tech-policy/2014/05/findthebest-may-be-first-to-gain-from-supreme-courts-patent-fee-ruling/
It's interesting to me that it so easy for us, even students to be able to recognize and determine if a company is a patent troll. This means that it is very easy for experts to identify, especially when they have previous records of the company's activities. Then, I ask why isn't there a way to completely shut these companies down if their sole purpose is to make money off of the system and not create anything beneficial to the patent world? There seems to be a missing piece that the law should try to address in order to help eliminate some of these unnecessary and time consuming cases that could hurt small companies.
ReplyDelete