Michel & Battaglia - EBay the Right to Exclude, and the Two Classes of Patent Owners

In Patently-O, an article Michel & Battaglia - EBay the Right to Exclude, and the Two Classes of Patent Owners worth reading. 

The article reviews the Supreme Court's EBay decision, which cautioned courts from categorically denying injunctions to patent owner that seek to license rather than commercialize their patented invention. Despite the caution, when it comes time to grant injunctive relief some courts think we have two class of patent owners. Time for patent owners to remind the court what did and didn't happen in EBay.

Copyright © 2020 Robert Moll. All rights reserved.

Stanford Technology Law Review - Predictably Expensive: A Critical Look at Patent Litigation in the Eastern District of Texas

Brian Love of Santa Clara University Law School and James Yoon of Wilson Sonsini Goodrich & Rosati's article Predictably Expensive: A Critical Look at Patent Litigation in the Eastern District of Texas to be published in the Stanford Technology Law Review is worth review.

Here is the abstract:

"In this Essay, we compare U.S. patent litigation across districts and consider possible explanations for the Eastern District of Texas’s popularity with patent plaintiffs. Rather than any one explanation, we conclude that what makes the Eastern District so attractive to patent plaintiffs is the accumulated effect of several marginal advantages — particularly with respect to the relative timing of discovery deadlines, transfer decisions, and claim construction — that make it predictably expensive for accused infringers to defend patent suits filed in East Texas. These findings tend to support ongoing efforts to pass patent reform legislation that would presumptively stay discovery in patent suits pending claim construction and motions to transfer or dismiss. However, we also observe that judges in the Eastern District of Texas tend to exercise their discretion in ways that dampen the effect of prior legislative and judicial reforms that were aimed (at least in part) at deterring abusive patent suits. Given the broad discretion courts have to control how cases proceed, this additional finding suggests that legislation restricting venue in patent cases may well be the single most effective reform available to Congress."

Copyright © 2016 Robert Moll. All rights reserved.

WSJ - Patent Litigation Up in 2015, Despite Efforts to Rein it In

In the Wall Street Journal article Patent Litigation Up in 2015, Despite Efforts to Rein it In, Ashby Jone's refers to a RPX report as supporting that non-practicing entities (NPEs) lawsuits seeking to monetize patents are flourishing in 2015 despite Congress' patent reform efforts and the Supreme Court decision making it more difficult to get a software patent in Alice.

The article is interesting, but doesn't explain why patent infringement lawsuits filed vary in 2013-2015:

2015: NPEs filed 3,604 lawsuits

2014: NPEs filed 2,891 lawsuits

2013: NPEs filed 3,733 lawsuits

Despite lots of activity, Congress didn't pass any significant patent reform in 2013-2015. Further, although the Supreme Court's heightened standard for software patent eligibility in Alice might explain why less software patent owners would want to file a lawsuit in 2014, it doesn't explain the rise in lawsuits in 2015.

Copyright © 2016 Robert Moll. All rights reserved.

District Court Judge Orders Nebraska to Pay Patent Owners' Attorney Fees

In Activision TV Inc. v. John Bruning, the US District Court for the district of Nebraska ordered the state of Nebraska to pay $725,000 in attorney fees, because the state attorney general (AG) violated the First Amendment in sending cease and desist letters to the law firm representing two non-practicing entities: (1) stating their patent enforcement letters could be in violation of the Nebraska Consumer Protection Act; and (2) barring the law firm from initiating any new patent infringement enforcement efforts. The court held that the attorney general failed to prove the patent owners' actions were "objectively and subjectively baseless and done in bad faith."

Initially this AG's action may seem strange. But at the time the AG took action, the media blitz regarding patent trolls was in full force. Now the ruling states in so many words the AG's "strong arming" patent litigant was not saving the public from harm, but damaging the patent owner's federal rights to enforce their patents. Perhaps the judge perceived this was also little more than political grandstanding based on little or no fact investigation. Now the public whom this AG allegedly sought to protect gets to pay the patent owner's attorney fees.

Copyright © 2014 Robert Moll. All rights reserved.

Apple is Being Sued for Infringing 13 SanDisk Patents

Tonight, check out Apple is Being Sued for Infringing 13 SanDisk Patents. This article caught my attention because the title makes it appear SanDisk is suing a customer, but instead it is a story about non-practicing entities in Europe that purchased some of SanDisk's flash memory patents and are busy trying to monetize the patents.

As stated in the article: "Ireland's Longitude Licensing Ltd and Luxembourg's Longitude Flash Memory Systems S.a.r.l. have filed a joint patent infringement lawsuit against Apple. The lawsuit involves a whopping 13 counts of infringement covering most iDevices and iPod models. The plaintiffs are using former SanDisk patents that they now own against Apple."

If Apple products use SanDisk flash memory, it makes me wonder why patent exhaustion, implied licensing and/or laches won't become an issue.

Copyright © 2014 Robert Moll. All rights reserved.

PriceWaterhouseCooper's 2014 Patent Litigation Study

Tonight, check out PWC's 2014 Patent Litigation Study - As case volume leaps, damages continue general decline. This study is interesting.

IP Navigator argues the explosion in patent litigation is a myth. IP Navigator's article states the study fails to support big tech's claim that patent litigation is out of control. Instead, big tech pushes the myth to pressure Congress to pass new laws that limit US patents. This makes sense as an incumbent wouldn't want strong patents held by startups. After all, it might shake up the status quo.

How do lobbyists and academics perpetuate the myth? Ignore that the increase in cases is partly due to the American Invents Act making it difficult to join multiple defendants in a single lawsuit, plus ignore that the increase in patent litigation is also due to an increase of US patent grants.

Copyright © 2014 Robert Moll. All rights reserved.

Professor Feldman - Patent Trolling: Why Bio & Pharmaceuticals Are at Risk

In the study, Patent Trolling: Why Bio & Pharmaceuticals Are At Risk, Professor Feldman and Harvard Fellow Dr. Nicholson Price discuss patent trolls- also referred to as non-practicing entities, patent assertion entities, and patent monetizers- moving into the biotech, pharmaceutical, and life science industries.

The authors state highlights include:

"With the Association of University Technology Managers revisiting its policy against selling to NPEs, the authors considered whether universities could provide an extensive pool of ammunition for NPEs to launch against current products.

To supplement increasing anecdotal evidence that patent trolling is moving into bio and pharma, the authors examined the life science holdings of five major universities.We skimmed the patent holdings for four of the of five university systems with the highest number of patents issued in fiscal year 2011: the University of California system, the University of Texas system, MIT, and CalTech. We added as a wild-card the University of Southern Florida, the school among the top 10 in 2011 patent grants which had the lowest ratio of license revenues to research expenditures.

The study identified dozens of patents that could be deployed against current bio and pharm industries, following the patterns that NPEs have used against other industries. These include patents on drug formulas, methods of treatments, research methods, dosage forms, and others.

In deciding whether to undertake the study, the authors agonized over whether the potential for harm outweighed the potential benefit. After all, if reform efforts are not undertaken, the work could simply provide a handy road map for those who would follow.

Life sciences trolling is predictable and in its infancy, however. The study is intended to sound a warning bell."

Even if you are not the biotech or life science industries, the study gives insight into patent troll strategies.

Copyright © 2014 Robert Moll. All rights reserved.

Innovatio's Wi-Fi Patent - Are We Infringing Tonight?

Some might say this case is not about innovation. That's right it's Innovatio! It's late so just a pointer: Chicago Lawyer article Wi-Fi case sheds light on patent trolls. Is it time to intervene and/or indemnify the countless Wi-Fi users?

Copyright © 2013 Robert Moll. All rights reserved.

Not All Non-Practicing Entities Are Patent Trolls - The Wright Brothers

UCLA professor Kal Raustiala and NYU professor Christopher Jon Sprigman's article How to Know a Patent Troll When You See One? You Can't is right-- it is difficult to distinguish whether a non-practicing entity (NPE) is a patent troll. But it is important to try given some important innovators in American history such as the Wright Brothers were NPEs. See CNET's slideshow presentation: How the Wright brothers won the race to invent the airplane (pictures).

Copyright © 2013 Robert Moll. All rights reserved.

Richard Hill Don't Turn My Company Into A Patent Troll!

Mr. Richard Hill, Chairman and interim CEO of Tessera Technologies, a designer of semiconductor technologies wrote an article in Forbes Don't Turn My Company Into A Patent Troll that does a nice job of explaining why non-practicing entities who seek to license US patents should not be lumped together with the bad actors, i.e., the so-called patent trolls.

It is not a matter of politeness to refer to a company like Tessera as a NPE rather than a patent troll. As Mr. Hill notes he is defending against a Board takeover with Starboard Value LP which seeks to defund company R&D and focus on seeking contingency fee patent litigation dollars. He calls this "cutting down the apple tree to harvest the apples."

I haven't met Mr. Hill nor do I have any involvement with Tessera, but he appears to be headed in the right direction and I wish Tessera well in its effort to continue to innovate and license its innovation in the semiconductor industry.

Updated May 28, 2013: Mercury News - San Jose's Tessera Technologies loses proxy showdown with hedge fund, agrees to sweeping management changes.

Copyright © 2013 Robert Moll. All rights reserved.

Parallel Networks Seeks to Vacate Arbitrator's $3 Million Award to Former Contingency Fee Law Firm Jenner & Block

Joff Wild of IAM has a story (see link below) about a law firm's fee dispute with a non-practicing entity. It might illustrate many things, but to me it indicates a contingency fee arrangement with a hourly fee fall back provision may misalign the lawyers and patent owners interests.

Parallel Network's appeal papers to the district court give a compelling story of what happened. Parallel Networks engaged the Jenner & Block law firm to represent it in a patent enforcement and licensing program. As part of the program, Parallel Networks sued Oracle. After losing a summary judgment motion filed by Oracle for non-infringement, Jenner & Block decided to terminate the atttorney-client relationship. Parallel Networks used Jenner & Block's emails to show how it weighed the economics in handling the appeal on contingency or quitting and seeking payment on an hourly basis. It seems the "contingency" fee arrangement gave no incentive to stay in the case if it got difficult.

Even though some Jenner & Block attorneys felt the basis for appeal was good because of three reversals of this judge in the past and possible error in this case, Jenner & Block decided it was time to quit. Initially, Jenner & Block did not seek the legal fees for the work performed. But after Parallel Networks reached a $20 million settlement two years later with another firm, Jenner & Block demanded $10 million in fees on an hourly basis.

When Parallel Network refused to pay, Jenner & Block sued to have the unpaid fee arbitrated. After arbitrator awarded Jenner & Block $3 million, Parallel Networks filed a motion and petition to vacate the arbitration award of $3 million, arguing the hourly basis provision was unenforceable in Texas.

Even if the provision is held unenforceable, it appears Jenner & Block should be paid something for its services as the record below was likely the foundation required to win the appeal. At the same time, Jenner & Block decision to quit seems influenced by the contingency fee arrangement with the hourly fall back provision. If it goes to trial, I will be interested to see if such a provision is enforceable in Texas.

See Mr. Wild's article: NPE, a law firm and a claim for $10 million in unpaid fees

Copyright © 2013 Robert Moll. All rights reserved.

InterDigital v. ITC and Nokia - Patent Licensing Satisfies Domestic Industry Required for ITC Relief

Yesterday, in InterDigital v. ITC and Nokia, the Federal Circuit held that non-practicing entity InterDigital's patent licensing alone met the domestic industry requirement of Section 337 of the Tarriff Act of 1930, 19 USC 1337(a)(2) and 1337(a)(3). The Federal Circuit also stated the statute does not require physical articles be made in the USA. This decision poses an obstacle to the effort to reduce the impact of non-practicing entity (NPE) lawsuits in the ITC. For more detail on the lobbying, see an earlier post: Lobbying to Block ITC from Hearing Non-practicing Entities

So I expect NPEs will continue to file lawsuits at the ITC seeking injunctive relief apart from EBay considerations until (1) the domestic industry requirement is rewritten, or (2) the SCOTUS reverses the InterDigital interpretation of the domestic industry requirement. But I don't expect many NPEs to successfully assert SEPs in the ITC given the ITC only grants exclusion orders.

Copyright © 2013 Robert Moll. All rights reserved.

Bessen & Meurer - The Direct Costs from NPE Disputes

Bessen & Meurer The Direct Costs from NPE Disputes claims companies accrued $29 billion in costs due to non-practicing entity (NPE) disputes in 2011. This article was published June 28, 2012, and just before the hearing this month to limit NPE's access to the ITC. Well what can I say? Nice timing guys.

Copyright © 2012 Robert Moll. All rights reserved.

Tech Company's New Favorite - The Patent Troll

The Wall Street Journal's article Corporate America to Patent Trolls: 'Well, Two Can Play at This Game' is worth reading. Ashby Jones of the WSJ notes how the divide between tech companies and non-practicing entities (i.e., patent trolls) is disappearing. Yes, the tech industry still complains about patent trolls while it spins out companies to license and sue on its patents and sells patents to trolls to generate cash. The article had no comments from tech companies on this trend. I guess the patent troll designation has a case of situational ethics.

Copyright © 2012 Robert Moll. All rights reserved.