In Nest Labs CEO advice: Startup? More like lawyer up, Tony Fadell says startups challenging the incumbents need to prepare not just for competition but dirty tricks:
"They will throw everything under the sun at you, and a lot of it is not cool. In addition to patent lawsuits, they'll trash your products on review sites. Nest Labs has been able to track some one-star reviews back to the facilities of its competitors, and he values having a lawyer who can fight the patent suits."
Yes, but what's an even dirtier trick? Maybe the Goodlatte Innovation Act (HR 3309) that purports to stop patent trolls, but will no doubt intimidate some small companies into not enforcing legitimate patent rights to avoid the risk of paying incumbent's legal bills. Nothing like the threat of shifting your legal bill to send a startup on its way!
How will Goodlatte shift incumbent legal fees to small companies? It proposes mandatory attorney fee shifting in every single case when a court concludes the loser's conduct or claim was not reasonably justified. Each time a defendant wins, the patent owner will face a motion for attorney fees. This is a huge change from 35 USC 285 that requires each party bear its expenses, including attorney fees except in exceptional cases.
Congress appears to be rushing the Goodlatte's bill to passage before smaller entities can oppose it and/or before the Supreme Court can decide two cases on the award of attorney fees in patent cases: Highmark Inc. v. Allcare Management Systems, Inc. and Octane Fitness v. Icon Health and Fitness. It might be smart to hear how the Supreme Court would guide this topic instead of rushing forward to change 35 USC 285.
Copyright © 2013 Robert Moll. All rights reserved.