Emily Billig

HiRes

Just a few short months after the house passed the Innovation Act, HR 3309 (now before the Senate Judiciary Committee), a bill pointedly aimed at curbing the practices of non-practicing entities, or patent trolls, as reported earlier on this blog, the Supreme Court has now issued two decisions not as deliberately aimed but nonetheless injurious to the patent troll business model.

Yesterday, Justice Sotomayor delivered two nearly unanimous decisions of the Court (available here and here) that collectively lower the hurdle for prevailing defendants to obtain attorneys’ fees against the plaintiff.  The previous standard, oft implemented by the Federal Circuit, the federal Court of Appeals for patent cases, required “material inappropriate conduct” or both “subjective bad faith” and “objective[] baseless[ness]” on the part of the plaintiff in bringing the case before fees could be awarded against it.  Such conduct is commonly complained of by those targeted by patent trolls, entities named for their practice of acquiring patents in the hopes of collecting damages through infringement lawsuits, but is rarely punished.  Small businesses and individuals who are sued by patent trolls often pay a fee to settle the case rather than incur the expense and exposure of litigation.  Yesterday’s dual Supreme Court decisions may change that. (more…)

Pushing Patent Trolls Into the Light of Day: Congress Attacks the Practices of Non-Practicing Entities

HiResThe Innovation Act, H.R. 3309, was overwhelmingly passed by the House (325-91) last week.  The Senate version seems poised to pass soon, and the White House is reportedly also in favor.  The legislation was introduced by House Judiciary Committee Chair Bob Goodlatte (R-VA) to address the growing problem of non-practicing entities (NPEs), a.k.a “patent trolls.”

Patent trolls are so named for their practice of acquiring patents that they have no intention of bringing to the market.  Instead, trolls demand damages or licensing fees from unsuspecting businesses, sometimes including consumers, who use a device or method allegedly covered by the troll’s patents.  The Patent Examiner reports that Innovatio IP Ventures, which claims to have a portfolio of patents covering wifi technology, sues businesses such as Caribou Coffee and Panera Bread for providing wifi in their businesses. The trollish penchant for “shell” companies makes it nearly impossible to determine who owns the patents at issue. (more…)