Chief Patent Judge Speaks Out Against Patent Trolls

from the could-have-done-it-earlier... dept

In the past, we've criticized Judge Randall Rader, the chief judge of the court of appeals for the federal circuit (CAFC), which, among other things, handles all appeals on patent cases, for being completely out of touch with the ways in which our patent system is broken. His statements seemed to indicate a complete lack of recognition for how patent trolling and bogus patent lawsuits were causing all sorts of trouble for innovation. So it's encouraging -- but surprising -- to see Judge Rader team up with professors Colleen Chien and David Hricik -- who have studied problems with patents and patent trolls -- to write a NY Times op-ed piece about the problems of patent trolls. Yes, the chief judge of the court that handles patent cases is now openly calling them trolls and complaining that they're a problem. This is good.
The onslaught of litigation brought by “patent trolls” — who typically buy up a slew of patents, then sue anyone and everyone who might be using or selling the claimed inventions — has slowed the development of new products, increased costs for businesses and consumers, and clogged our judicial system.

Their business plan is simple: trolls (intellectual-property lawyers use less evocative terms like “non-practicing entities” and “patent-assertion entities”) make money by threatening companies with expensive lawsuits and then using that cudgel, rather than the merits of a case, to extract a financial settlement. In the apt summary of President Obama, who on Tuesday announced a plan to stave off frivolous patent litigation, trolls just want to “hijack somebody else’s idea and see if they can extort some money.”
What's interesting, is that the rest of the op-ed mainly focuses on the question of fee-shifting. As we've discussed, President Obama's patent plan includes plans to make it easier for those who bring bogus patent lawsuits to have to pay attorneys' fees, and there are already a few proposals in Congress that include similar provisions. But the op-ed points out that judges already have this power, and just don't use it very often. So, he's suggesting that judges "look more closely" at patent cases, to see if there's abuse by trolls, and if they ought to use Section 285 of the Patent Act.
To make sure Section 285 is implemented with appropriate vigor, judges must look more closely for signs that a patent lawsuit was pursued primarily to take improper advantage of a defendant — that is, using the threat of litigation cost, rather than the merits of a claim, to bully a defendant into settling.

One sign of potential abuse is when a single patent holder sues hundreds or thousands of users of a technology (who know little about the patent) rather than those who make it — or when a patent holder sues a slew of companies with a demand for a quick settlement at a fraction of the cost of defense, or refuses to stop pursuing settlements from product users even after a court has ruled against the patentee.

Other indications of potential bullying include litigants who assert a patent claim when the rights to it have already been granted through license, or distort a patent claim far beyond its plain meaning and precedent for the apparent purpose of raising the legal costs of the defense.
While this is an interesting point, I'm not sure it's really that relevant. First of all, Section 285 reads (in its entirety):
The court in exceptional cases may award reasonable attorney fees to the prevailing party.
But that's the thing: these kinds of trolling efforts are not "exceptional." They're increasingly the norm, as was noted in the very same op-ed.

Also, you'd think that, as the chief judge on the court that handles all patent appeals, Judge Rader would have had a chance to not just do what he suggests judges should do... but to create a precedent for district courts to adhere to on that point, rather than just writing about it in the NY Times.


Reader Comments (rss)

(Flattened / Threaded)

  •  
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    fogbugzd (profile), Jun 6th, 2013 @ 7:53am

    One big problem with fee-shifting remedies is that the only apply if the case goes to court and if you win the judge lottery and get one who will grant fees. Last time I checked the American Bar Association generally opposes loser-pay concepts and judges are ABA members. So even though judges can award fees they are usually reluctant to do so.

    Fee shifting solutions are at best a bandaid on a fundamentally broken patent system.

     

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      Dan J., Jun 6th, 2013 @ 12:08pm

      Re: Fee Shifting

      Yeah, but you're missing the big point. (For a rarity, it appears Mike did too.) Fee-shifting is entirely in the control of the judges. The whole point of this article, written by one of the chief judges who caused this whole mess, is to say "Yeah, there's a small problem here but it's not that big a deal and besides, we already have the tools to fix it. There's no need for any pesky additional legislation or for Congress to get involved. We got this. Nothing to see here, now move along."

       

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        Anonymous Coward, Jun 6th, 2013 @ 1:17pm

        Re: Re: Fee Shifting

        You misapprehend the distinction between the roles of judges who sit at the trial level and those who sit at the appellate level.

        Trial level judges are imbued with a great deal of discretion, and barring a clear abuse of discretion it is not the role of appellate judges to interfere.

        Rader is correct that precedent does exist in the form of case law, statutes and court rules. Because he sits at the appellate level all he can do is encourage trial courts to take advantage of what precedent allows. Rader's comment does, however, provide a signal to trial courts that they are less likely to be reversed for abuse of discretion should a decision they render be presented to the Court of Appeals for the Federal Circuit.

         

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      Anonymous Coward, Jun 6th, 2013 @ 5:08pm

      Re: The Judge caused a lot of the problems he complains about

      There's a more clear explanation for the proliferation of troll lawsuits, and Rader knows he's to blame so he tries to deflect the conversation: the Medimmune case.

      When Rader made it so that the defense bar could sue any patent owner anywhere simply for the patent owner asking for a license, it became open season for the Patent Infringers on the patent owners.

      Once patent owners saw that they could be sued anywhere anytime, they realized the only option was to shoot first and then ask questions - it became the new paradigm - sue for infringement before you are sued for invalidity.

      Just track the number of Petitions for Declaratory Judgement and patentee filings since that ruling and you will see what I am talking about.

      It changed the whole dynamic of the Patent World:

      We used to have a civilized system of dialog, exchange, etc., before any shots were fired; usually litigation was a last resort.

      The question is, how much of the patent litigation chaos in courts is due to the actions, the decisions, of the courts themselves? How much of the increase in patent litigation that Judge Rader complains about, in this op-ed piece, is due to court decisions such as Medimmune that are solely the responsibility of Judge Rader and his colleagues?

       

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  • This comment has been flagged by the community. Click here to show it
     
    identicon
    out_of_the_blue, Jun 6th, 2013 @ 9:13am

    Judges actually do tend to follow statute...

    they're in fact bound to, and corporations tend to write statutes, so we soon have a perfectly "legal" tyranny that serves only corporate interests.

    Oh, previously he was "completely out of touch", but NOW thanks to Mike's criticism he's seen the error of his ways. It must be frightening to have that much power. -- This preening by Mike is what prompted my subject line: judges are constrained by statute, but many actually try to be fair and honest despite that. -- Any gov't system is intentionally evil and even honest efforts within it can't fix the basic flaws.

    ANYHOO, SO, Mike, NOW is the time you tell us how to fix it? Or are YOU TOO just writing about problems? -- And getting money just for that, so why would you want to fix it?


    Take a loopy tour of Techdirt.com! You always end up same place!
    http://techdirt.com/
    Even if Mike is absolutely right about problems, he has no solutions to even suggest.
    05:12:53[g-145-8]

     

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      identicon
      Anonymous Coward, Jun 6th, 2013 @ 9:30am

      Re: Judges actually do tend to follow statute...

      what? bad corperate and goverment actors have long been a topic for techdirt articles. How often do you even read anything other than your own comments?

       

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    •  
      identicon
      Anonymous Coward, Jun 6th, 2013 @ 9:32am

      Re: Judges actually do tend to follow statute...

      You're at the point where you would probably be better off just standing on a street corner yelling at a trash can.

       

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      identicon
      Anonymous Coward, Jun 6th, 2013 @ 9:38am

      Re: Judges actually do tend to follow statute...

      Funny. You don't present a solution either.

       

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      identicon
      Anonymous Coward, Jun 6th, 2013 @ 9:42am

      Re: Judges actually do tend to follow statute...

      I think you love Mike Masnick more than any other tech dirt reader. Maybe you are Mike Masnick....

       

      reply to this | link to this | view in chronology ]

    •  
      identicon
      Anonymous Coward, Jun 6th, 2013 @ 9:52am

      Re: Judges actually do tend to follow statute...

      You must not understand how to fix problems. It is a series of steps and the first step is to point out there is a problem. Once that step has been reached then you work on a solution. Mike was only being a responsible American citizen and pointing out that there is a problem and it needs to be fixed. Once enough people see that it needs to be fixed then a solution needs to be presented. But for a good solution it needs to be a cooperative effort to eliminate any biases. Mike isn't the one to come up with a solution nor should you. At most you could come up with a researched proposal.

       

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      DannyB (profile), Jun 6th, 2013 @ 10:03am

      Re: Judges actually do tend to follow statute...

      Hey, why aren't you over on the other thread defending your buddies at Prenda?

       

      reply to this | link to this | view in chronology ]

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      Mike Masnick (profile), Jun 6th, 2013 @ 11:03am

      Re: Judges actually do tend to follow statute...

      ANYHOO, SO, Mike, NOW is the time you tell us how to fix it? Or are YOU TOO just writing about problems? -- And getting money just for that, so why would you want to fix it?

      Nope, we never write about how to fix the system. Never. Except, you know, all the times we have.

      http://www.techdirt.com/articles/20110819/14021115603/so-how-do-we-fix-patent-system.shtml

       

      reply to this | link to this | view in chronology ]

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      BearGriz72 (profile), Jun 6th, 2013 @ 2:21pm

      Re: 05:12:53[g-145-8]

      What the heck is that freaky timestamp anyway?
      Is Out_of_the_Ass really just a bot?
      Is this someones idea of a Turing test?
      Inquiring minds don't much give a damn, but I'm curious...

       

      reply to this | link to this | view in chronology ]

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        Gwiz (profile), Jun 6th, 2013 @ 2:31pm

        Re: Re: 05:12:53[g-145-8]

        What the heck is that freaky timestamp anyway?

        It's Blue's silly homebrew version of DRM. It's about as effective as any DRM. As in: NOT.

        I still have trouble telling the "fake" OOTB's from the original since they all spout crazy crap. I feel the fake ones are at least sane since they are doing it for the lolz.

         

        reply to this | link to this | view in chronology ]

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    identicon
    Anonymous Coward, Jun 6th, 2013 @ 9:41am

    with respect to the judge, if he knows what is going on, why wait until Obama says something describing how bad the situation is? just the other day, certain judges ruled in favour of basically removing the 4th Amendment. the same thing could happen with the 5th Amendment which is in a case being discussed at the moment. i appreciate that these are different areas but a judge is a judge. if he knows something is wrong, he should make his fears known and get it discussed at a level where changes can be made. there have been a lot of people stitched up and fleeced by these trolls. judges sure as hell haven't helped the situation, usually siding with them rather than with the defendant. that has cost economies everywhere a fortune. and i dont only mean in immediate monetary terms either but in progress terms that have halted because of or through fear of litigation. the only thing i can think of that is more ridiculous is the way everyone of power and influence falls over themselves to protect the wastes of space at the top of the copyright industry and entertainment industries trees! the harm they have done is equally as perverted!!

     

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    Anonymous Coward, Jun 6th, 2013 @ 10:04am

    Rader will be recused from all 'troll' cases in the future

    This article will be used by all NPEs to get him removed from cases involving a NPE. No NPE will stand having him on a case after this article. I am glad he outed himself, many patent attorneys have been wondering about him for a long time. I guess he couldn't control himself anymore and had this final outburst.

    He latest opinion in Alice v. CLS in which he critisized 'bright line test' and the resulting confusion showed his bad judicial discretion. The only people who liked that decision are patent litigators because the confusion gives them something more to discuss/debate in court. http://tinyurl.com/cr2fw34

     

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    Anonymous Coward, Jun 6th, 2013 @ 10:46am

    What do judges understand of markets?

     

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    Anonymous Coward, Jun 6th, 2013 @ 10:51am

    This judge - probably a liberal given his licking of Obamas ass - is not doing what you want to happen. He is defending the status quo to avoid having other laws to deal with in this area. Since trolls are officially in the hunting season, he is trying to tell the politicians that they should leave things be and let judges handle the problems on their own.

    To me this guy is even further from ideal as a higher level judge.

     

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    Anonymous Coward, Jun 6th, 2013 @ 1:58pm

    We would not be in this mess if we'd stop giving out patents for shit like rounded corners.

     

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    identicon
    Anonymous Coward, Jun 6th, 2013 @ 5:06pm

    Judge Rader caused a lot of the problem that he complains about

    Mr. Masnick:

    There's a more clear explanation for the proliferation of troll lawsuits, and Rader knows he's to blame so he tries to deflect the conversation: the Medimmune case.

    When Rader made it so that the defense bar could sue any patent owner anywhere simply for the patent owner asking for a license, it became open season for the Patent Infringers on the patent owners.

    Once patent owners saw that they could be sued anywhere anytime, they realized the only option was to shoot first and then ask questions - it became the new paradigm - sue for infringement before you are sued for invalidity.

    Just track the number of Petitions for Declaratory Judgement and patentee filings since that ruling and you will see what I am talking about.

    It changed the whole dynamic of the Patent World:

    We used to have a civilized system of dialog, exchange, etc., before any shots were fired; usually litigation was a last resort.

    The question is, how much of the patent litigation chaos in courts is due to the actions, the decisions, of the courts themselves? How much of the increase in patent litigation that Judge Rader complains about, in this op-ed piece, is due to court decisions such as Medimmune that are solely the responsibility of Judge Rader and his colleagues?

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    staff, Jun 7th, 2013 @ 12:26pm

    more dissembling by Masnick

    Inventors wonder if Rader has been duped or bought by the worlds biggest invention thieves.

    “patent troll”

    infringers and their paid puppets’ definition of ‘patent troll’:

    anyone who has the nerve to sue us for stealing their invention

    The patent system now teeters on the brink of lawlessness. Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to stop or pay”. This is just dissembling by large invention thieves and their paid puppets to kill any inventor support system. It is purely about legalizing theft. The fact is, many of the large multinationals and their puppets who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so. To them the only patents that are legitimate are their own -if they have any.

    It’s about property rights. They should not only be for the rich and powerful. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they included inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity and the jobs the commercialization of those inventions bring. For 200 years the patent system has not only fueled the US economy, but the world’s. If we weaken the patent system we force inventors underground like Stradivarius (anyone know how to make a Stradivarius violin?) and in turn weaken our economy and job creation. Worse yet, we destroy the American dream -the ability to prosper from our ingenuity for the benefit of our children and communities. Who knows who the next Alexander Graham Bell will be. It could be your son or daughter. It could be you. To kill or weaken the patent system is to kill their futures. Show me a country with weak or ineffective property rights and I’ll show you a weak economy with high unemployment. If we cannot own the product of our minds or labors, what can we be said to truly own. Life and liberty are fundamentally tied to and in fact based on property rights. Our very lives are inseparably tied to our property. Large multinational corporations are on the brink of destroying the American dream -our ability to pull ourselves up by our bootstraps from the working classes by building our own companies while making better futures for our children and our communities.

    Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back into the patent system with injunctions fully enforceable on all infringers by all patentees, large and small.

    Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    For the truth about trolls, please see http://truereform.piausa.org/default.html#pt.
    http://www.hoover.org/publications/defining-ideas/article/142741
    http://ssrn.com/abstract=1792442

     

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    Gene Cavanaugh (profile), Jun 7th, 2013 @ 4:14pm

    Patent trolls and "exceptional" cases.

    Well written, and a serious problem.

    However, confusing "exceptional" as used by the courts, as opposed with common understanding, is not helpful. There is a very great difference, and such cases would be "exceptional", even if "everyone does it".

     

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