Can You Beat Patent Trolls By Using The Same Techniques That Make Them So Successful?

Patents

from the interim-solution dept

Law professor Colleen Chien has been doing some good work lately in trying to address the problem of patent trolling. She’s now written up an interesting article for Forbes, in which she notes that the system clearly needs to be fixed, but in the meantime, wonders if there’s a way to use the very aspects of what makes patent trolling profitable to defeat patent trolls. The full article is worth reading, in that it lays out the basic structure and economics of why patent trolling is such a profitable business. But the real question is if the same factors that work for patent trolls can be made to work in the other way:

• Trolls succeed because their lawyers only get paid when the patent holder wins. Under the traditional billing model, defense lawyers get paid no matter what. What about tying defense payments to the successful and low-cost resolution of cases? Success payments, outcome-based billing and other forms of ?contingency defense? give the main source of transaction costs ? lawyers ? incentives to reduce them.
• Trolls also succeed by capturing economies of scale. Purchase, assert, repeat. In contrast, few lawyers specialize exclusively in defensive tactics like invalidation, reexamination and joint defense. Expertise that is developed within a firm is guarded as proprietary. But defensive tasks like prior art searching could become cheaper and more reliable if done on a larger scale. Firms with expertise dealing with certain patent assertion entities or certain venues better understand what is needed to efficiently dispose of a suit.
• When trolls show up now, companies fold individually because its easier to do than fight collectively. But the gains from collaboration can be substantial, and would be even more so if approaches were standardized and made more efficient.
• The greatest advantage trolls have is their ability to focus exclusively on assertion. A lack of customers, partners and operations endow trolls with a freedom to litigate not enjoyed by practicing companies. The makers and users of technology should consider doing the same and investing in their own non-practicing entity ? a nonprofit. While on a day-to-day level, companies need to resolve disputes and move on, a more long-term and sustained focus could yield longer-term payoffs. Trolling is a big enough issue that diverse stakeholders including small and large companies, across sectors, should be able to find common ground.

As a starting point for something to do now while the system is still very, very broken, that seems like it might help. I do wonder how effective it can really be however. That first point — contingency defense lawyers — could definitely help, since trolls rely heavily on the cost of defending against their bogus assertions to get paid. But… it requires lawyers willing to buy into such a contingency defense, and that seems like a tough sell.

Filed Under: defense, patent trolls, patents

Calling For An Independent Invention Defense In Patents

Say That Again

from the an-idea-who's-time-has-come dept

For quite some time we’ve wondered why there’s no independent invention defense to patent infringement. It’s hard to come up with any justifiable reason for not only barring those who come up with an idea on their own from making use of such an invention, but also for potentially making them liable for millions of dollars in damages for just making use of something they came up with on their own. For years, I’ve been waiting to hear any justification for this — either economic or moral — and I’ve never heard anything that makes any sense at all. Patent attorney Stephan Kinsella has now written up a post that also calls for an independent inventor defense, noting how incredibly rare it is for a client to ever have actually been accused of copying an idea. He notes that about the only reason most are against this idea is that they realize it would put a lot of patent lawyers out of work.

Filed Under: defense, independent invention, obviousness, patents

Judge Says Copyright Holders Must Consider Fair Use Before Sending DMCA Takedowns

Legal Issues

from the this-isn't-over-just-yet... dept

Strong copyright system supporters have always tried to push aside fair use. Sometimes they pretend it doesn’t actually exist. Sometimes, they claim that it stifles creativity. However, in the last few years, they’ve pretty much aligned their talking points on fair use. You’ll hear it repeated again and again: fair use is “just a defense, not a right.” This is a bit of semantics that basically tries to minimize what fair use represents and what it’s designed to allow. The argument, effectively, is that there’s no “right” to fair use, and there’s no clear cut meaning for fair use. Instead, it can and should only be brought up as a defense in court. In other words, fair use does not exist until a court says it exists.

This is misleading and not entirely correct. The reason fair use is allowed as a defense is because there is a right to make use of certain types of content in certain types of ways that constitute “fair use” without first needing to receive permission from the copyright holder. But, it was still this argument that Universal Music recently used to defend itself against a lawsuit from the EFF, concerning the now infamous 29-second video of a little kid dancing, with some music from Prince playing in the background. Everyone now agrees that this video was fair use. Universal Music let the video go back online and did not sue. The DMCA has a clause that allows damages to be sought against a falsely filed takedown notice — which was basically designed to punish those who send a DMCA takedown claiming copyright over something for which they do not actually hold the copyright. In this case, the EFF claims that since this is obvious fair use, then the DMCA notice was falsely filed. Universal, on the other hand, asked the court to dismiss the case, saying it need not consider fair use when filing a DMCA takedown notice — mainly because fair use is just a defense, not a right.

The judge handed the EFF something of a victory, though, allowing the case to move forward and noting that copyright owners should consider fair use before sending out takedown notices. To be honest, I’m a bit surprised by the decision. While I agree that it makes sense, it wasn’t at all clear that the law actually meant for fair use to be taken into account. In fact, I rather doubt that this sort of scenario was even considered by those who wrote and debated the DMCA. Universal will likely appeal on this point, and so we’re pretty far from establishing definitively if fair use needs to be taken into account. However, if this ruling stands, the claim that “fair use is a defense, not a right” loses a lot of its bite. The court effectively said the opposite:

Even if Universal is correct that fair use only excuses infringement, the fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.

The judge also noted that it wasn’t any sort of onerous burden to expect the copyright holder to make a fair use determination, since it has to review the content to make sure it’s infringing in the first place:

Undoubtedly, some evaluations of fair use will be more complicated than others. But in the majority of cases, a consideration of fair use prior to issuing a takedown notice will not be so complicated as to jeopardize a copyright owner’s ability to respond rapidly to potential infringements. The DMCA already requires copyright owners to make an initial review of the potentially infringing material prior to sending a takedown notice; indeed, it would be impossible to meet any of the requirements of Section 512(c) without doing so. A consideration of the applicability of the fair use doctrine simply is part of that initial review.

All in all, this is a definite win for supporters of fair use — and a definite loss for those who trot out the “defense, not a right” line. As for the rest of this particular case, though, the judge indicated that the EFF may have a difficult time winning, noting that even if the copyright holder takes fair use into account, the specifics would have to be pretty extreme to then decide that it used “bad faith” in sending the takedown. In other words, the judge is saying that Universal should take fair use into account, but that doesn’t mean that sending the takedown was done in bad faith.

Filed Under: dancing baby, defense, dmca, fair use, prince, right
Companies: eff, universal music