However, think of trying to legitimately sue Microsoft, or Apple or Google for using your patent. You have their bills to worry about too and they can out-lawyer almost everyone. This is no doubt loved by the largest corps, it does nothing to stop trolls but makes it much harder for a real person /entity to sue them (with tens of billions in the bank)
Edit: Imagine the first day in court, months after the other side's billing has started: you see 16 lawyers on the [Google's, MS, Apple's] side and have a heart attack! 16X$400 an hour (on the low side) X 5 hours = $32,000 for half a day, just to show up in court.
The bill addresses that by applying the losing plaintiff pays only to non practicing entities. It specifically excludes original inventors.
The easiest way would be to fund USPTO so they stop issuing bogus patents.
This is why pushing "loser pays" in the U.S., along with binding arbitration, has been a favorite pet project of some people.
It'd suck as much as before to lose.
Sounds like fraud to me. I'm sure this loop hole could get closed.
Where is that $30k going to come from? It doesn't exist. If you think that this is a case where you should breach the limited liability provided by incorporating, you're opening a pretty huge can of worms - it's pretty much the basis of our economy.
It's a lot more complex than "you can't do that".
"Any party that fails to meet a condition under subsection (a)(3) shall be required to post a bond in an amount determined by the court to cover the recovery of full costs." [1]
The subsection (a)(3) reference points to the subsection (d) exemptions for original inventors, parties which have made "substantial investment" in exploiting the patent through "production or sale of an item covered by the patent", universities, and technology transfer organisations "whose primary purpose is to facilitate the commercialisation of technology developed by one or more institutions of higher education".
[1] http://cdn.arstechnica.net/wp-content/uploads/2013/02/SHIELD... § 285 subsection (b)
LLC is limits liability doesn't it? Its not no liability. Surely a more effective and wide ranging measure would be to enforce limits on the limitations. If no one wants to take some small amount of responsibility for a company, that company has no business existing.
In the case of the shell companies the owner is the parent company, not the shareholders. Thus the shell companies limit the liability to the parent company. This allows the parent company to sue people without the risk of an adverse ruling.
The bill is essentially a judicial shortcut to make patent litigation riskier for non-practicing entities, precisely, non subsection (d) entities. Unfortunately, there is little judicial consensus (to the best of my limited knowledge) on what this means. ARM produces nothing tangible - it licenses designs. That makes ARM look like a non-practicing entity. Yet few would brand it as a patent troll.
Having losing plaintiffs pay is good. But it still leaves the defendant bearing the risk of adverse judgment. Even the non-practicing entity shortcut means hiring a lawyer. Perhaps, for patent suits, the plaintiff should have to, as part of filing the suit, dislose whether they or their beneficial owners' related entities have a history of filing patent suits deemed frivolous.
(1) Original Inventor Such party is the inventor, a joint inventor, or in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, the original assignee of the patent.
The bigger loop-hole, it seems, is the exemption of "technology transfer organizations". What is the difference between a legitimate such, and a shell patent troll? They both have the explicit purpose of holding an inactive patent for the purpose of commercialising it.
This is the major flaw IMHO. In jurisdictions like Marshall, TX adverse judgements happen 80%+ of the time. So I don't see this as radically changing the status quo.
Aside from common law vs civil law, Europe and the US have fundamentally different legal systems (adversarial vs non-adversarial). I think the non-adversarial system supports the English Rule, while the US adversarial system unnecessarily drives up attorneys fees and costs so legislators authorize attorneys fees only in specific types of cases where it is justified, and of course where a provision is included in a contact (of course parties in the US have the ability to contract such provisions).
If people aren't in threat of losing their savings or their home then they aren't going to care about such rules.
As in: You're a troll, pay the defendant, oh and your lawyer pays too?
The plaintiff is an inventor or original assignee.
The plaintiff is actually using the patent.
The plaintiff is a university or "technology transfer organization"
Also, forget the "loser pays" system. Just make establishing one of the first two a prerequisite for having standing to sue for patent infringement.
Somehow I doubt that patent trolls will develop curriculums and bring in students for the sheer purpose of bilking inventors.
>Somehow I doubt that patent trolls will develop curriculums and bring in students for the sheer purpose of bilking inventors.
Maybe. I could see how they might partner pretty quickly with the likes of the University of Phoenix however.
This guy would've had to start a car company in order not to be liable for millions in legal fees if he lost?
http://en.wikipedia.org/wiki/Robert_Kearns
Somehow I think the big companies will exploit this, and start violating NDAs and real patents willy nilly, since the bar has been raised for them.
But the patent trolls are doing enough damage too, I am not sure if it's worth hurting a few real deserving inventors.
a) I doubt your example of Robert Keans, who is actually an inventor and not a patent troll would be found to be the latter by most judges.
b) If the motion is successful, you can still pull out and save the costs. You did lose, but you didn't go broke trying.
So It's probably not quite as dramatic for the little guy, as you suggest.
This will vastly increase the cost of operation for NPEs.
It would also encourage some companies to take companies who are asking them to pay "patent fees" to Court if they think the patents are not good enough, and they could win.
I think the fix would be to stop allowing overly broad patents (eg. actually say how what you're doing what you're claiming, instead of saying "i have an idea" and not saying how to do it)
>For example, successful copyright plaintiffs usually win attorneys' fees if they have a registered copyright.
That means that the MAFIAA gets their legal fees back if they sue the 9-yr old down the street and win?
IMO that's pretty messed up.
I understand that they're the least sympathetic players is a patent system, but a bogus patent lawsuit is a bogus patent lawsuit. I would even argue that, in many cases, a company trying throw sand in the gears of their competitors by using patents that never should have been granted is worse than a patent troll. At the end of the day, a patent troll just wants to extract money (and typically is happy to extract it from all players equally). A company suing its competitors, by contrast, is trying to upset the competitive balance in some market which can easily have more far-reaching implications.
One counterargument I've heard is that we don't need "loser pays" for practicing entities because they can be countersued with your own portfolio, so you can eventually negotiate a truce based on MAD. To me, this misses the point. MAD is a workaround for some bugs in the patent system, not an end in itself. If there's a better way to discourage trumped-up patent lawsuits, we should use it too (or even instead, depending). And MAD has significant weaknesses (doesn't protect small players vs big players, favors incumbents, etc.) that a broad "loser pays" could help.
For example, Trademark law requires that a application indicate the date of first use in commerce, and the one exception is filing under "intent to use". I know there are a lot of arguments against a similar provision for patents, but why not make this distinction in Patent applications, because if a patent is actually used in commerce, then you basically insure the holder is not just a troll.
Even for junk patents, certain well known jurisdictions (read: Marshall, TX) award the trolls in these cases 80%+ success rates at trial. The trolls would only be on the hook for the remaining 20%, in addition to having collected all the settlements and royalties for cases which never made it to trial.
In view of the above I don't see this changing much of anything.
Like forbidding their transfer to such non-practicing (or any) entities to begin with? Or maybe not having patents and finding a new way to encourage development in medicine - which afaik is the only area where patents have a measurable benefit.
(to make clear i mean /benefit to society/ not money)