Patent Troll That Accused FindTheBest Of 'Hate Crime' For Fighting Back Now Has To Pay FTB's Legal Fees

from the fee-shifting-ftw dept

We've been talking about the importance of fee shifting in deterring bogus patent trolling suits for a while now. And while the trial lawyers fear of fee-shifting stupidly led them to kill the patent reform bill that included them, thankfully, the Supreme Court made fee shifting in patent cases more reasonable after smacking down the Federal Circuit (CAFC) once again.

The impact of the Supreme Court's ruling in the Octane Fitness case around fee shifting is already being felt. We already noted that NewEgg was able to pursue fees against a troll, but in another high profile case, a court has already ordered a patent troll to pay up for the bogus lawsuit it brought.

You may recall this case: After patent troll Lumen View went after startup FindTheBest, FTB's CEO Kevin O'Connor announced that he'd spend $1 million fighting the troll rather than settling for the $50,000 offered. In response, Lumen View accused O'Connor of "hate crimes" for calling Lumen View a patent troll. Later, Lumen View sought (and thankfully failed) to get a gag order on FTB for revealing information that was perfectly fine to reveal. In fact, Lumen View demanded that FTB try to remove prior disclosures from the internet.

Of course it was all just posturing. While this was going on, Lumen View kept making more and more desperate attempts to get FTB to settle. But FTB knew it didn't need to settle because it wasn't violating the patent -- something it made clear to Lumen View right at the beginning. In the end, the court not only found that FTB didn't infringe, it invalidated the patent itself (US Patent 8,069,073, in case you were wondering).

And, now, Judge Denise Cote has also told Lumen View that, in light of the Octane Fitness ruling, it has to pay FTB's legal fees as well. The ruling notes that it was clear from the outset that FTB didn't infringe (whether or not the patent was valid), and Lumen's continued pursuit of FTB was clearly abusive.
First, Lumen’s lawsuit against FTB was “frivolous” and “objectively unreasonable.” “To be objectively baseless, the infringement allegations must be such that no reasonable litigant could reasonably expect success on the merits.” .... No reasonable litigant could have expected success on the merits in Lumen’s patent infringement lawsuit against FTB because the ‘073 Patent claimed a bilateral matchmaking process requiring multiple parties to input preference information, while FTB’s “AssistMe” feature utilizes the preference data of only one party. Lumen’s own claim construction brief construed the independent claim of the ‘073 Patent as requiring two or more parties to input preference data. That submission urged the term “preference data” to be construed “in conjunction with its plain and ordinary meaning.” And Lumen’s Complaint alleged that FTB’s infringement was predicated on the alleged use of bilateral preference matching. But FTB does not employ bilateral preference matching.

And the most basic pre-suit investigation would have revealed this fact.... And if there were any confusion on this score -- and Lumen has provided no basis to find it was confused by the website -- Lumen was certainly on notice of this fact from the outset of the litigation. FTB’s Seigle and O’Connor informed Lumen that FTB’s AssistMe feature did not use the bilateral or multilateral preference matching process in a telephone conversation of June 19. And FTB’s attorney again informed Lumen by telephone and by letter of June 26. Yet Lumen proceeded with an obviously baseless lawsuit, failing to point to any specific way in which FTB infringed the patent.
The Judge makes it clear she knows that this was purely about trolling for settlement money all along:
Lumen’s motivation in this litigation was to extract a nuisance settlement from FTB on the theory that FTB would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation. Lumen never sought to enjoin FTB from the allegedly infringing conduct in its prayer for relief. Lumen’s threats of “full-scale litigation,” “protracted discovery,” and a settlement demand escalator should FTB file responsive papers, were aimed at convincing FTB that a pay-off was the lesser injustice.
Furthermore, the judge notes that since Lumen filed a bunch of very similar complaints, fees are certainly justified since the company seems to be using patent lawsuits as "part of a predatory strategy aimed at reaping financial advantage from the inability or unwillingness of defendants to engage in litigation against even frivolous patent lawsuits."

This is a great win for a company that was willing to stand up against a bogus patent troll lawsuit, and it's great to see that the troll will now have to pay up (how much will be determined later). Once again, we see how badly CAFC had screwed things up (for years!) with its ridiculously high standard for patent fees. Thanks to the Supreme Court fixing things in the Octane ruling, hopefully, we'll see more companies willing to stand up to trolls and not having to worry so much about how much it will cost to defend themselves against obviously bogus claims.

Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Jun 2nd, 2014 @ 9:09am

    Lumen’s motivation in this litigation was to extract a nuisance settlement from FTB on the theory that FTB would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation.

    Is that a sufficiently clear description of extortion for the police to investigate Lumen for practicing extortion?

     

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

  2.  
    icon
    Designerfx (profile), Jun 2nd, 2014 @ 9:13am

    Re:

    No/Unlikely. The judge refused a RICO charge as well.

     

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

  3.  
    identicon
    Michael, Jun 2nd, 2014 @ 9:29am

    no reasonable litigant could reasonably expect success on the merits

    They are now expecting patent trolls to be "reasonable"? That's never going to work...

     

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

  4.  
    identicon
    Anonymous Anonymous Coward, Jun 2nd, 2014 @ 9:46am

    TrollingLawyers.com

    I know they won't like it, but some ethical personage might consider a website that lists both the lawyers (individually), and the firms, that participate in these offensive actions, so the rest of us know whom not to hire for anything.

     

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

  5.  
    icon
    madasahatter (profile), Jun 2nd, 2014 @ 9:51am

    Re: Re:

    RICO is a narrower statute. Extortion might be viable.

    I would like to much harsher meted out to the trolls when they lose. I fear many will try abusive bankruptcies in an attempt to avoid paying the fines/fees when they lose.

     

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

  6.  
    identicon
    Anonymous Coward, Jun 2nd, 2014 @ 9:51am

    Don't be hatin' on us extortin'!

     

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

  7.  
    identicon
    PRMan, Jun 2nd, 2014 @ 10:41am

    Re: TrollingLawyers.com

    A website attacking lawyers that are known to abuse the legal system and tie it up with expensive lawsuits for long periods of time?

    What could possibly go wrong?

     

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

  8.  
    icon
    Josh in CharlotteNC (profile), Jun 2nd, 2014 @ 10:48am

    Re: Re: TrollingLawyers.com

    Nothing as long as whoever sets it up makes sure they're in a state with strong anti-SLAAP laws.

     

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

  9.  
    identicon
    KRA, Jun 2nd, 2014 @ 1:34pm

    Charge the lawyers

    I'd love to see the plaintiffs' lawyers pay 50% of the defendants' legal bills after a ruling like this one. Right now these amoral pieces of garbage bill their thug clients for representation in these nuisance suits, so they walk away with a lot of money no matter what. Unless the scumbag lawyers have skin in the game, they have no incentive to stop filing these crap suits.

     

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

  10.  
    icon
    Coyne Tibbets (profile), Jun 3rd, 2014 @ 6:21pm

    Libel

    Accusation of a hate crime? They should sue for libel. Let's see Lumen View try to convince a judge they didn't mean to impugn FTB's character.

     

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

  11.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 10:13am

    i love this case.

     

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

  12.  
    icon
    David Cortright (profile), Jun 10th, 2014 @ 9:49am

    Getting around gag orders

    So the whole pattern of troll sues, settles, but demands gag order as a part of the settlement has been bothering me. After all sunlight is the best disinfectant. So I came up with a scheme that as a non-lawyer seems logical to me. Perhaps others (actual lawyers or those with experience in this) can weigh in.

    Before I sign any sort of agreement with a troll, I am bound by nothing. That is up to the very second the tip of my pen touches the signature line of an agreement. I don't see anything that would stop me from posting a copy of the agreement that pretty explicitly shows how it has NOT been signed by me (at least not yet), with language in the post stating very clearly that this is the exact wording of the agreement that I intend to sign, however once I sign I will not be allowed to confirm that.

    Me signing the agreement cannot change the past, or force me to take down any documents or drafts that were circulated and/or published prior to me actually signing, right?

    This seems no different than "The NSA has not compromised our systems. Please watch for removal of this notice."—proactively setting things up so that information may be communicated in a post-gag order world.

     

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


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