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Patent Troll Lawyer Sanctioned Over Extortion Tactics

CmdrTaco posted more than 2 years ago | from the slap-that-wrist dept.

Patents 147

An anonymous reader writes "For all the stories of patent trolls and copyright trolls, there haven't been too many stories of either being sanctioned for abusive or extortion-like practices... until now. The Court of Appeals for the Federal Circuit (one level below the Supreme Court) has approved over $600,000 in sanctions against a lawyer for a patent troll, saying that filing over a hundred lawsuits, each of which was followed up almost immediately with offers to settle at fees much cheaper than it would cost to fight, has the 'indicia of extortion.' Now if only judges started doing that more often."

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147 comments

Now We Wait ... (4, Insightful)

WrongSizeGlass (838941) | more than 2 years ago | (#37033446)

This is a Federal Circuit court, so the next (and last) step would be to appeal it to the SCOTUS. Let's hope it gets on the docket so this type of egregious misuser of the legal system (the patent trolls) can get the press coverage only a Supreme Court case can give it.

Re:Now We Wait ... (1)

Oxford_Comma_Lover (1679530) | more than 2 years ago | (#37033558)

Keep in mind that if it goes to SCOTUS, it might be overturned. The Supreme Court might decide that extortion which is asking for an agreement not to pursue a known legal right--i.e. suing you--is perfectly legal. Most of the legal system works that way. But it shouldn't.

Disclaimer: I haven't read this case yet.

Re:Now We Wait ... (2)

Garridan (597129) | more than 2 years ago | (#37033660)

FWIW, these are monetary sanctions. So, the patent troll is extorting companies, and the state profits. If the lawyer got disbarred, that'd be one thing. But this validates patent trolling to some extent: now, they just charge a little more to pay off the man.

Re:Now We Wait ... (1)

BetaDays (2355424) | more than 2 years ago | (#37033938)

I was thinking that now the lawyers will open up shell companies (law offices) so that it doesn't look like all the suits are coming from the same group of lawyers.

Re:Now We Wait ... (3, Informative)

bobaferret (513897) | more than 2 years ago | (#37034056)

You need to pay more attention. According to the NPR story that ran a few weeks back, that's exactly what they do. Little tiny offices with no occupants in some small town in Texas, which are effectively controlled by the company that owns the patent pool every one else bought into. Ugh... makes me sick. Sorry if I missed the sarcasm in your post.

Re:Now We Wait ... (1)

BetaDays (2355424) | more than 2 years ago | (#37034334)

First thing. Missed the one about them doing it already. Second thing. I should have put a /sarcasm. Either way it's all good. -- Paul: Father... father, the sleeper has awakened! - Dune

Re:Now We Wait ... (1)

Will.Woodhull (1038600) | more than 2 years ago | (#37034186)

As I understand it, the Federal courts, and I think all other courts in the USA, have no mechanism for disbarring a lawyer. That is an action of the various Bar Associations. Which might well happen to this lawyer, since it looks like there is a strong case for disbarment.

Re:Now We Wait ... (1)

MarkvW (1037596) | more than 2 years ago | (#37034836)

The federal courts do have a mechanism for disbarring.

Re:Now We Wait ... (1)

realityimpaired (1668397) | more than 2 years ago | (#37035494)

They can recommend that the bar association reexamine the lawyer's membership, but they can't directly disbar them. They could, of course, charge them with contempt and throw them in jail, which will usually get a lawyer disbarred, but there has to actually be a case for contempt for it to work.

Re:Now We Wait ... (3, Interesting)

Artraze (600366) | more than 2 years ago | (#37034132)

> But it shouldn't.

But why not? It seems quite reasonable for parties to be allowed to come to an agreement without having to be involved in a court case. After all, it's pretty much fact that court cases (vs fair agreements) only benefit lawyers. What they could strike down is the ability to offer settlements prior to filing a case and proper judicial review to determine if the case has merit. _That_ would be a big step forward and really eliminate all of the 'extortion' aspects. Beyond that though, you're really only tying up the courts, with, I'm supposing, the expectation that it would decrease the rate at which these sort of cases occur. Would that really be better though? Perhaps, but I think that's trowing out the baby with the bath water... Settlements are still useful for non-extortion type cases.

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37034724)

We need to eliminate software patents, design patents, look and feel patents, business patents etc. End of story. Real patents for a short time are OK. SHORT and only where a company can't get a stranglehold on the market. As long as low cost competitors can come in later after a significant profit has been made to make up and then PROFIT from those patents and produce the product.

Re:Now We Wait ... (-1)

Anonymous Coward | more than 2 years ago | (#37034986)

Yeah exactly. We need to institute the unproven nerd-friendly dreamworld because everyone knows that antisocial nerds know everything about how to run a society...

Hey, at least you'll be allowed to take other people's work without compensating them, and that's the most important thing.

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37035034)

I agree with you- Let's let the parasites destroy innovation. I'm sure some of the unearned cash brought in by these ethical people will trickle down, benefiting all.

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37035466)

I'll go a step further.

I see no reason why extortion should be illegal. Whatever else is going on, I do not see how the act of exchanging money for a promise not to behave in a certain (legal) way is problematic. If there is threat to behave in an ILLEGAL way without payment ("I will kill you if you don't give me $1,000") then you can prosecute the extortionist for the threat of violence. If we come to the traditional "blackmail" variety, in what way is extortion fundamentally different than a non-disclosure agreement? If the information that is to be disclosed was obtained illegally, go after the extortionist for that. If the information was obtained legally, why is it the government's job to say that it's not OK to request money for the promise not to disclose it?

Gossiping is legal. Asking for money is legal. Asking for money to NOT gossip is illegal. *sigh*

Re:Now We Wait ... (1)

Artraze (600366) | more than 2 years ago | (#37035870)

Gossiping in a way _designed_ to be harmful is illegal.

Regardless, the point of court is to facilitate a functioning society. If we were to make it legal, acceptable and even profitable to harass others, than the court system would be more trouble than it's worth, and civil law ought to be abolished in its entirety under the philosophy that a system deliberately designed to facilitate unchecked harmful behavior is worse than no system at all.

In short stealing is illegal. Extortion is illegal. Yay.

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37035830)

for non-extortion type cases.

Any case brought with a settlement cost less than the cost of fighting is extortion.

Re:Now We Wait ... (4, Informative)

gstoddart (321705) | more than 2 years ago | (#37034204)

The Supreme Court might decide that extortion which is asking for an agreement not to pursue a known legal right--i.e. suing you--is perfectly legal.

Well, if nobody has decided on the merits of the case, but you're immediately providing an offer to settle which is lower than likely legal fees ... I fail to see how this is anything but extortion.

What's to stop this lawyer from filing suit against a bunch of people who you have no evidence against whatsoever? In this case, and from TFA:

In this particular case, it was clear that Flagstar did not infringe on the patents in question. ... snip ...

In addition to finding that Eon-Net filed an objectively baseless infringement action, the district court also determined that Eon-Net filed the lawsuit in bad faith and for an improper purpose... In particular, the district court found that Eon-Net's case against Flagstar had "indicia of extortion" because it was part of Eon-Net's history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.

So, this is a completely baseless suit, with an immediate offer to settle, and with NO legal grounds for the suit in the first place.

You may not have read the actual legal case, but seriously, RTFA and you might know why this is happening. These filings were completely meritless, and the offer to settle was intended to exploit the cost of litigation being more than the cost of settling.

This is a case where the lawyer definitely needed to be sanctioned

Re:Now We Wait ... (1)

HiThere (15173) | more than 2 years ago | (#37034440)

Yes, but *do* consider why this is news. I.e., it almost never happens.

If this starts happening regularly, *then* I will be encouraged. As it is...

Re:Now We Wait ... (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37034480)

Sounds like the issue here is within the court system itself. It should not cost $upteen dollars for a defendant to defend against a "completely meritless" case. The only reason the trolls are making money is because the court system is too slow / too costly to discard the meritless cases quickly.

What the trolls saying is: I know it will cost you $500k to defend this (baseless) case, so I will go away if you pay me $25k (a year) in extortion fees.

Re:Now We Wait ... (1)

lgarner (694957) | more than 2 years ago | (#37035192)

Well, if nobody has decided on the merits of the case, but you're immediately providing an offer to settle which is lower than likely legal fees ... I fail to see how this is anything but extortion.

Or it's an effort to save yourself and the defendant both some time and money

What's to stop this lawyer from filing suit against a bunch of people who you have no evidence against whatsoever?

The same thing that stops them now. Virtually nothing.

So, this is a completely baseless suit, with an immediate offer to settle, and with NO legal grounds for the suit in the first place.

Right. This is the problem, not the offer to settle.

You may not have read the actual legal case, but seriously, RTFA and you might know why this is happening.

Seriously, this is happening because anyone, including you and me, has the right to bring suit against anyone else. It would be a much bigger problem if that right is taken away. The problem is that there seems to rarely be any significant penalty to bringing a baseless suit.

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37034218)

The court found that the patent was not infringed, though. It's not a legal right to file baseless lawsuits, which is why you can be punished with Rule 11 sanctions if you do.

In addition to finding that Eon-Net filed an objectively baseless infringement action, the district court also determined that Eon-Net filed the lawsuit in bad faith and for an improper purpose. ... The district court imposed Rule 11 sanctions against Zimmerman and Eon-Net because it found that Eon-Net's infringement allegations were legally baseless and that Eon-Net and Zimmerman failed to perform a reasonable pre-suit investigation. ...

We have considered Eon-Net's remaining arguments and conclude that they are without merit. For the foregoing reasons, the judgment of the district court is affirmed.

Of course, monetary sanctions are nice, but it would have really been encouraging if the sanctions had gone so far as to bar the company or its lawyer from filing this sort of suit in the future.

Re:Now We Wait ... (1)

Ihmhi (1206036) | more than 2 years ago | (#37034674)

SCOTUS' job (well, one of them) is to interpret the law and have their interpretation act as binding precedent on the national level. The important bit here, though, is "interpret the law". Even if you disagree with them, they do try very hard to explain why they voted a particular way and cite specific laws and precedent.

If this does get to SCOTUS and it's not found to be extortion (even though it walks like a duck and talks like a duck etc.), then it comes down to the laws being deeply flawed.

Re:Now We Wait ... (1)

blair1q (305137) | more than 2 years ago | (#37035002)

I haven't read it either, but I think it should probably be overturned unless there's evidence for the extortion charge other than just doing a lot of it at once.

Extortion is about threatening harm to someone to get something you aren't owed. That's certainly a reasonable charge if I threaten to sue someone who doesn't owe me anything and I offer to take a small sum of cash rather than put them through the cost of a trial.

But if I own a patent and I see others selling products containing that idea, I'm owed royalties. The fact that there are a lot of infringers and I'm willing to settle immediately instead of demanding more and insisting on going to court to get it means I'm the good guy in the situation.

It's all about whether my case had merit. Maybe this guy's case didn't, for most of his targets.

Re:Now We Wait ... (2)

luis_a_espinal (1810296) | more than 2 years ago | (#37035550)

I haven't read it either, but I think it should probably be overturned unless there's evidence for the extortion charge other than just doing a lot of it at once.

Extortion is about threatening harm to someone to get something you aren't owed. That's certainly a reasonable charge if I threaten to sue someone who doesn't owe me anything and I offer to take a small sum of cash rather than put them through the cost of a trial.

But if I own a patent and I see others selling products containing that idea, I'm owed royalties. The fact that there are a lot of infringers and I'm willing to settle immediately instead of demanding more and insisting on going to court to get it means I'm the good guy in the situation.

It's all about whether my case had merit. Maybe this guy's case didn't, for most of his targets.

But that is what's in the court's findings according to TFA. The lawsuit was without merit, and the plaintiff was not found to have broken any copyright laws. Ergo he owns nothing to the patent troll. Ergo, patent troll was trying to get something that he didn't own off the plaintiff. Furthermore, the court found that this was ample evidence that this was the patent troll's modus operandi. Ergo, patent troll has attempted to seize something he didn't own from other plaintiffs using similar, merit-less lawsuits.

Patent troll might have owned the patent, but the plaintiff didn't break it, and since the patent troll not only did not due due diligence as found by the court, the court itself found that patent troll has not done any due diligence at all when filing the hundreds of similar lawsuits. It is hard to argue, logically and legally, that this is not a systematic attempt at extortion not just against this specific plaintiff, but against many others (independently of whether patent troll owns the patents or not.)

Re:Now We Wait ... (0)

Anonymous Coward | more than 2 years ago | (#37033640)

If only this would be the case of "copyright trolls" aka **IA. But this is probably happening because this is not a mafia, such as the movie, music industry, or MS, Apple, Sony, etc.

SCOTUS? That's so expensive! (3, Funny)

Kamiza Ikioi (893310) | more than 2 years ago | (#37033760)

Maybe we can settle for a slightly lower amount and call it a day?

Re:Now We Wait ... (1)

UnknowingFool (672806) | more than 2 years ago | (#37033940)

My understanding of the system is the next step is the full Federal court. This case was decided by a three judge panel. Both sides can petition the case to be heard by the full panel (I think 12 or 9). Then the Supreme Court has discretion to hear it after that.

I don't think the Supreme Court is likely to hear it as normally they step in in when there is disagreement by lower courts. In this case both the district court and appeals court ruled the same. However the good news is that a ruling by this court is considered precedent setting so lawyers will be aware of it even if the general public is not.

Re:Now We Wait ... (1)

nomadic (141991) | more than 2 years ago | (#37033964)

Rehearing en banc is routinely rejected. I bet the full court won't even hear it.

Re:Now We Wait ... (1)

UnknowingFool (672806) | more than 2 years ago | (#37034420)

Especially since the ruling was unanimous and parts of the appeal reviewed the case de novo.

Re:Now We Wait ... (2)

Will.Woodhull (1038600) | more than 2 years ago | (#37034400)

If I understand the system correctly, this decision is a precedent that would be effectively binding on all similar cases in the Federal courts under this Circuit. It would be given strong weight in all other Federal courts, too. So there are benefits without going to SCOTUS.

That said, the defense could be raised that the precedent does not apply in any given case for one reason or another. So it is a deterrent to lawyers using the modern day equivalent of barratry [wikipedia.org] , but it probably will not on its own stop the practice. Disbarring the lawyers involved in this case would be a much stronger deterrent, and perhaps the Bar Association they are members of will do that. If they are encouraged to do that. The Judge's decision is a strong argument that disbarment is the correct thing to do here.

Re:Now We Wait ... (1)

HangingChad (677530) | more than 2 years ago | (#37034770)

Let's hope it gets on the docket so this type of egregious misuser of the legal system (the patent trolls) can get the press coverage only a Supreme Court case can give it.

You're hoping for relief from the 5 members of the Corporate Supreme Court? The same people who have never met an unreasonable search. I'm guessing that would be pretty friendly venue for a patent troll.

Re:Now We Wait ... (1)

utkonos (2104836) | more than 2 years ago | (#37035150)

The press coverage that a Supreme Court case can give it? You mean buried on the 5th page of the newspaper?

About Time (0)

Anonymous Coward | more than 2 years ago | (#37033460)

Just like we discourage speeding with fines... Abuse of the legal system can and should also be discouraged with fines.

Good.. (1, Funny)

TheDarkMaster (1292526) | more than 2 years ago | (#37033464)

... Now, start shooting the patent trolls.

Re:Good.. (0)

Anonymous Coward | more than 2 years ago | (#37033534)

First we start by rounding them up. Then we shoot 'em. Or maybe getting them all into a corral riddled with land mines, and letting nature take it's course.

Re:Good.. (1)

erroneus (253617) | more than 2 years ago | (#37033704)

Using the landmine route would guarantee survivors as one or more troll would push the other trolls in front of them to absorb the explosion of the mine or mines in much the same way that the organizations behind the trolling shield themselves from legal repercussions.

Re:Good.. (1)

SomePgmr (2021234) | more than 2 years ago | (#37034588)

Troll natural selection... developing a more potent concentration of villainy among them? That's truly evil, sir.

Re:Good.. (1)

Opportunist (166417) | more than 2 years ago | (#37034640)

Yeah, but wouldn't it be fun to watch?

We can always shoot what gets out alive.

Re:Good.. (1)

Sulphur (1548251) | more than 2 years ago | (#37033698)

... Now, start shooting the patent trolls.

Fifty points Gryffindor, for sheer dumb luck.

Re:Good.. (2, Informative)

Infiniti2000 (1720222) | more than 2 years ago | (#37034024)

... Now, start shooting the patent trolls.

Shooting is insufficient, you have to burn the regenerating motherfuckers.

Re:Good.. (0)

Anonymous Coward | more than 2 years ago | (#37034846)

It's true. If you don't two will grow back in each one's place.

Re:Good.. (3, Informative)

s73v3r (963317) | more than 2 years ago | (#37035026)

Nuke em from orbit. It's the only way to be sure.

It's a start. (2)

JustAnotherIdiot (1980292) | more than 2 years ago | (#37033470)

Here's hoping that actions like this will continue, these dirtbags need to feel the pain they constantly shove onto others.

Re:It's a start. (1)

arth1 (260657) | more than 2 years ago | (#37033662)

Unfortunately, it won't, because the cost of settling with known scammers is still lower than going to court costs.

In this case, the judge notes that the company has spent over $600,000, and then awards them $489,150.48 in attorney's fees.
That's a net loss of $110,000 - far more than the extortion, sorry I mean proposed settlement was.

So what this unfortunately does is send a clear message to companies that they should continue to settle even if they know it's a scam, or they'll lose even more money.

Re:It's a start. (2)

CrimsonAvenger (580665) | more than 2 years ago | (#37033976)

In this case, the judge notes that the company has spent over $600,000, and then awards them $489,150.48 in attorney's fees.
That's a net loss of $110,000 - far more than the extortion, sorry I mean proposed settlement was.

The court also awarded them $141,984.70 for Rule 11 violations. So they received a total of $631,135.18. Which is rather more than the $600K they spent.

Re:It's a start. (2)

TheLink (130905) | more than 2 years ago | (#37034138)

How much does it cost to actually get the $631,135.18?

Re:It's a start. (0)

Anonymous Coward | more than 2 years ago | (#37034178)

So they received a total of $631,135.18. Which is rather more than the $600K they spent.

5% more. This may seem like a safe, high-return investment, but only because the stock market has completely tanked.

Re:It's a start. (2)

s73v3r (963317) | more than 2 years ago | (#37035044)

Keep in mind, there's also the benefit of shutting down a patent troll, which is good for everybody.

Re:It's a start. (1)

arth1 (260657) | more than 2 years ago | (#37035426)

I was under the impression that [i]fines[/i] go to the government, not to the opposite party?

Slightly scared (2)

The Grim Reefer2 (1195989) | more than 2 years ago | (#37033482)

I hope I'm just being pessimistic, but it seems like there has been too much good news about the legal system starting to wise up about this sort of thing lately. I keep expecting to see some kind of backlash in the other direction.

Re:Slightly scared (1)

synapse7 (1075571) | more than 2 years ago | (#37035066)

Nah, the PROTECT-IP act balances it out.

Wait, what? (4, Interesting)

ThisIsSaei (2397758) | more than 2 years ago | (#37033522)

So, Apple can sue over patents, and the RIAA can extort money, but if you combine the two it's suddenly over the line? Don't get me wrong, this guy had it coming, but let's not pretend that somehow the issue of patent trolling and extortion is being dealt with on any decent level. Had this guy worked for any large company, he'd be in the clear.

Re:Wait, what? (0)

Anonymous Coward | more than 2 years ago | (#37034114)

I find it laughable that people continue to liken Apple to patent trolls. You do know that Apple actually makes stuff? they make quite a lot of products, in fact. Not only that, they spend enormous amounts of money on R&D? You may not like them and you may not like that they have patents on certain things and, in fact, you may not like that they are exercising their right to defend their patents but they are NOT, by any measure nor definition, a patent troll. Not even a little bit.

If you're going to use the term, at least know what it means.

Re:Wait, what? (0)

Anonymous Coward | more than 2 years ago | (#37034202)

Yeah, apple makes things, sure.
But making one thing, then getting, say, 12 patents, 11 of which have nothing to do with the 1, is what makes apple a troll.

Re:Wait, what? (1)

s73v3r (963317) | more than 2 years ago | (#37035078)

You mean doing the exact same fucking thing as everyone else, but just because it's Apple, makes them a troll?

Re:Wait, what? (1)

wintercolby (1117427) | more than 2 years ago | (#37035610)

No, frivolously suing all of their competition over things that are common sense, where they were awarded patents by adding the words "on a mobile communications device" to something else that already existed, makes them a patent troll. Taking their competition to court over 12 baseless patents only to find that only 2 stick is what makes them a troll. Using patents to limit innovation and competition is what makes them a troll. Just because you bought something they sold doesn't make you a fool, you couldn't have known they'd turn out so ugly.

Re:Wait, what? (3, Informative)

gnasher719 (869701) | more than 2 years ago | (#37034146)

So, Apple can sue over patents, and the RIAA can extort money, but if you combine the two it's suddenly over the line? Don't get me wrong, this guy had it coming, but let's not pretend that somehow the issue of patent trolling and extortion is being dealt with on any decent level. Had this guy worked for any large company, he'd be in the clear.

The point here was that a patent holder says "I have a patent, I sue you, so just pay me a small amount that is much less than you would spend to beat me in court". That is abusing the court system; going to court not because you have a case but because it is cheaper for the defendant to pay you off than to win.

That is surely not what Nokia did to Apple, and what Apple is doing to Samsung now. Apple is saying to Samsung "I have this patent, and I don't want you to do the stuff in the patent". No paying off, no extortion.

And what the RIAA did, while it can be considered extortion, is something completely different again. They at least _believe_ that they have a case. The patent troll here _knows_ they don't have a case. (And copyright cases have been lost with sanctions when the copyright holder _knew_ they had no case, like Righthaven).

Re:Wait, what? (1)

s73v3r (963317) | more than 2 years ago | (#37035062)

Apple actually has products resulting from their patents. Not to mention, they don't troll; they're going after companies they feel actually infringed upon the patent.

This doesn't apply to most patent trolls. (4, Insightful)

Anonymous Coward | more than 2 years ago | (#37033564)

Most patent trolls don't sue entities who "it was clear [] did not infringe on the patents in question". They sue entities who might have infringed on the patents in question, or who definitely infringe on patents that are overly vague and that we think should be invalid, but that USPTO granted and the patent troll holds.

I predict this court case will mean very little.

Re:This doesn't apply to most patent trolls. (0)

Anonymous Coward | more than 2 years ago | (#37034658)

Do you realize you're the only commentator who actually read the article?

I read the case the same way. The trolls in this case couldn't even meet the low standard of actually having a case. They just sued random companies then settled for very cheap. Most trolls actually have a patent and can at least prove the company was violating it, even if the patent is overly broad and never should have been issued in the first place.

I have a patent pending (1)

Code Yanker (2359188) | more than 2 years ago | (#37033568)

for a system by which you file thousands of complaints based on bogus patent infringment and receive an assload of cash in settlements because it would be less expensive than fighting you in court. I'm think about filing for a few hundred injunctions if I get it.

Re:I have a patent pending (1)

Sparks23 (412116) | more than 2 years ago | (#37033954)

I'm afraid that IBM beat you to this by several years [cnet.com] , as they patented patent trolling back in 2007. Your technique is not precisely the same, but it would probably infringe on their patent...

Re:I have a patent pending (1)

Code Yanker (2359188) | more than 2 years ago | (#37034192)

The patent trolling industry is a mine field of patents...

Re:I have a patent pending (1)

s73v3r (963317) | more than 2 years ago | (#37035094)

Here's a really stupid question: If IBM patented patent trolling, why have they not gone after all of these little fuckstain companies? They could easily help to reform the patent system just by exerting that one patent.

Misread Title (1)

itchythebear (2198688) | more than 2 years ago | (#37033580)

Did anyone else mis-read the title as "There is a God!"?

Re:Misread Title (0)

Anonymous Coward | more than 2 years ago | (#37034240)

No, nobody else misread it that way, and you didn't either. Rather, you're making a feeble and ultimately vain attempt at some kind of clever humor. It's neither clever nor funny. Now go away, or I shall taunt you a second time.

Re:Misread Title (1)

itchythebear (2198688) | more than 2 years ago | (#37034990)

Glad to see you got the joke. Also, I have a large wooden rabbit you might be interested in...

Precedent? (2)

erroneus (253617) | more than 2 years ago | (#37033606)

How close to this to being a precedent which can be used or cited?

Re:Precedent? (0)

Anonymous Coward | more than 2 years ago | (#37033720)

There is plenty of precedent. Using the threat of legal action to force settlement is a fine line and can easily cross over into extortion.

For those thinking this is good but we still need tort reform, we have Rule 11 which is intended to punish lawyers for frivolous lawsuits. Sadly, it needs to be used more often.

Re:Precedent? (0)

Anonymous Coward | more than 2 years ago | (#37034038)

Anything appellate level and above is binding precedent as long as it is from the same circuit. If it's from a different circuit then it's just persuasive authority. In this case it's the The United States Court of Appeals for the Federal Circuit so it's a little different from the common 7th or 10th etc. Court of Appeals. Here's a link to the jurisdiction of this court.

http://www.cafc.uscourts.gov/the-court/court-jurisdiction.html [uscourts.gov]

Basically, this is a national appellate precedent applicable in all circuits.

HTH.

not much of a win (0)

Anonymous Coward | more than 2 years ago | (#37033620)

Flagstar spent over $600,000 to defend itself against a baseless lawsuit and the judge awarded them a little over $600,000, hardly a big win. And, nothing has happened in the other 100 baseless lawsuits.

Re:not much of a win (1)

arth1 (260657) | more than 2 years ago | (#37033712)

No, the judge didn't award them a little over $600,000. He awarded them $489,150.48.
The fines were $600,000, but they don't go to the defendant.

Exactly (4, Insightful)

pavon (30274) | more than 2 years ago | (#37033734)

Given the other 100 defendants settled for the amount they were asking, then Eon-Net made $2.5 - 7.5 million dollars as a result of their trolling. The consequence they had to pay only amounted to 9 to 25 settlements, and it took the defendant $600k to make that happen. Unless it becomes much easier to counter these people, it is still much cheaper to settle, and it is still very profitable for them to continue.

Re:not much of a win (2)

UnknowingFool (672806) | more than 2 years ago | (#37033768)

Well Flagstar claims $600k in attorney's fees however sometimes those numbers are inflated especially when one side had won. The judgement separated attorney's fees to $488k and $142k for sanctions. Presumably the $488k came from the district court who looked at the fees in detail and determined what was appropriate to b paid.

Wrong attitude (1)

Anonymous Coward | more than 2 years ago | (#37033980)

Here's how to deal with a patent troll:

1) Point out that settling will make you go bankrupt.
2) Point out that after that you have nothing to lose.
3) Ask how's the family.

Great Podcast on Patents (3, Informative)

Morose (32606) | more than 2 years ago | (#37033648)

I was actually just listening to This American Life a few days ago. Their podcast talking about how much the patent system is abused is extremely enlightening. For example, did you know there is a patent on "Thermally refreshing bread" (IE, toasting)? Not only that, but it was issued in 2000!

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack [thisamericanlife.org]

It is very rare. (2)

www.sorehands.com (142825) | more than 2 years ago | (#37033658)

From what I have seen, Rule 11 sanctions are very rarely imposed. I have several cases improperly removed to federal court, and the code provides for attorney fees and costs for improper removal. The Court consistently refused to impose those costs.

This is similar to the rules which prohibit attorneys for committing perjury. I had seen one case where the tentative ruling, written by the law clerk, state that there was no 998 offer sent, despite the sworn statement by defense counsel. The final ruling was unchanged except the finding that the attorney lied.

It takes a lot for the Court to rule against an attorney.

On the other hand, is a legal position frivolous, or is it novel? Where does the line gets drawn?

Re:It is very rare. (4, Interesting)

Oxford_Comma_Lover (1679530) | more than 2 years ago | (#37033840)

It's about as hard as it is to get a doctor to say another doctor is completely wrong. Industries that purport to self-regulate generally don't.

Bar discipline mostly only occurs in two cases: drug and alcohol related problems and stealing from clients. Lying to the bar during the application process can also screw you. That's about it.

Re:It is very rare. (0)

Anonymous Coward | more than 2 years ago | (#37034304)

Bar discipline mostly only occurs in ... alcohol related problems

Well, duh.

Re:It is very rare. (3, Informative)

c (8461) | more than 2 years ago | (#37035028)

Bar discipline mostly only occurs in two cases: drug and alcohol related
problems and stealing from clients. Lying to the bar during the application
process can also screw you. That's about it.

I've heard that peppering legal filings with gay porn is a pretty quick way to get sanctioned.

A practice just like any debt collection agency (0)

Anonymous Coward | more than 2 years ago | (#37033672)

Forget patent trolls...how about the hundreds of suits handed to the local municipal courts daily from debt collection/recovery firms? Notice how many of these debt firms are also physically located near the local courthouses as well so representatives may show up for hearings? Coincidence?

Re:A practice just like any debt collection agency (0)

royallthefourth (1564389) | more than 2 years ago | (#37035450)

Slashdot only cares about this type of thing when it might have an impact on what sort of video games the editors are able to play. This is because they are glorified children.

Not $600k in sanctions (1)

UnknowingFool (672806) | more than 2 years ago | (#37033718)

The total judgement was $600k with $142k for Rule 11 sanctions and the rest awarded for attorney's fees.

Are These Shell Companies Owned By +3, Helpful (0)

Anonymous Coward | more than 2 years ago | (#37033776)

    Intellectual Ventures [npr.org] ?

Yours In London,
Kilgore Trout

"workaround" for the lawyers. (0)

davidwr (791652) | more than 2 years ago | (#37033816)

A public letter to the lawyers:

Sue for damages that most courts would find "rational" if the person were clearly guilty. Not thousands of dollars per song, but more like 3x the retail price of the track plus legal fees. 500 songs @ $2.99 = $4,500 plus legal fees. Adjust upwards so you are over the "small claims court" limits - you REALLY want to make a point this is NOT a small claim. Repeat x 200,000 [torrentfreak.com] .

Do NOT make any initial offer to settle, wait for people to respond to the suits. Get default judgments for those who do not respond. Do your fellow troll industry a favor and and sell default judgments for pennies on the dollar to judgment trolls.

Make an INITIAL offer that is basically the amounts to the amount you are suing for minus your projected legal costs minus some reasonable discount to reflect the risk that an "honest" lawsuit would not succeed.

If the person claims poverty, youth, or you are suing a middle class person for $10K+ (that he'll never be able to pay) because he downloaded 1,000 tracks, or the defendant is otherwise "sympathetic" in any way make a counter-offer to get the defendant to be your spokes-person in exchange for lowering the claims - the more they do for you and your client the less they have to pay.

Save the "big bucks" lawsuits for people who can afford to pay the judgment and for people who are making money off of resale (likely a very small fraction of the defendants).

Do this and you can make some money, send a message/provide some deterrence, and not be accused of being off-the-scale-greedy.

A public letter to the music industry:

Remove both economic incentives to piracy (too-high prices) and non-economic ones (DRM and other inconveniences) and you will see piracy go way down.

View piracy as an untapped market not as an evil to be squashed.

Patent the "Patent Trolling" Business model? (1)

DavidT123 (2221258) | more than 2 years ago | (#37033918)

Seems like an easy path to riches to me.... (or maybe it would shut it down entirely, either way....)

Be careful what you wish for... (1)

cdrguru (88047) | more than 2 years ago | (#37034064)

Is being offered a $200 fine in exchange for a court hearing for a traffic ticket "extortion"? How about $500? You build up enough precedent and it just might be.

I would think there would be no bar against a much wider applicability of this sort of decision and pushing things along the line of saying that settlements and fines in exchange for opting out of a legal proceeding in court are all extortionate.

This sort of thing didn't use to exist at all. You filed suit against someone and their were no real options other than proceeding. Similarly, no prosecutor before maybe 1950 would ever offer a defendant an opportunity to just pay a big fine rather than go through a trial, even for a traffic ticket. If the ticket demanded a court appearance, that was what you got. And the cop had to show up and testify. Today, this mostly never happens - people just pay the fine and accept the extortion.

I can easily envision a legal environment where there is no possibility of pre-trial settlements. Both parties have to show up, personally - no lawyers without clients. Now this does have the effect of making a lawsuit of any kind start to get really, really expensive and painful. But maybe that is what is needed.

Re:Be careful what you wish for... (0)

Anonymous Coward | more than 2 years ago | (#37034398)

I would think there would be no bar against a much wider applicability of this sort of decision and pushing things along the line of saying that settlements and fines in exchange for opting out of a legal proceeding in court are all extortionate.

Nah, the court isn't trying to shake the foundations of civil procedure here. It's upset with the way that law is being practiced in instances like this, and for good reason. This sort of tactic is almost - almost - like a reverse class action suit, but without any certification process. In a typical civil case one has plenty of case management and mediation opportunities etc to guide things down a rational path. Settlement of some sort is certainly preferred by the courts and is not considered extortion in any way. It usually results in more rational solutions. The courts are pragmatic to a large degree, in spite of what the headlines commonly suggest, and they don't need their dockets clogged to the nth degree due to some rule against reaching settlements. Settlement doesn't mean that a defendant is paying a sum of money when they've done nothing wrong simply to make a problem go away, though.

Precedent Against RIAA (4, Informative)

Jason Levine (196982) | more than 2 years ago | (#37034098)

The RIAA has been using similar tactics only with copyright instead of patent. They file a bunch of John Doe lawsuits, get the people's names, contact them and say "Hey, you can settle with us for a low, low (but not too low) fee or we will sue you for a ton of money." Of course, this patent troll isn't as big as the RIAA is, so the chance that they would be found to be extorting money out of alleged infringers is much lower.

Re:Precedent Against RIAA (1)

EvilStein (414640) | more than 2 years ago | (#37034900)

The RIAA also has other trolls like Dianne Feinstein and her Democrat hollywood friends behind them. :/ That's a big problem.

Re:Precedent Against RIAA (1)

belmolis (702863) | more than 2 years ago | (#37035316)

This is a bipartisan problem. Yes, Feinstein and other Democrats help out the RIAA, but so do Republicans, e.g. Orrin Hatch.

similar to RIAA tactics (1)

Dale512 (1073668) | more than 2 years ago | (#37034172)

The article reads much like the tactics used by the RIAA as well. File suit with instant offer to settle for way, way less than the cost to fight.

Re:similar to RIAA tactics (1)

ThorGod (456163) | more than 2 years ago | (#37034904)

Yes, you make a good point. There have been a couple (not enough) cases of the RIAA being fined (for similar reasons), right?

Troll analogy (2)

danhaas (891773) | more than 2 years ago | (#37034268)

Someone correct me if this analogy on patent trolls is wrong...

1-The troll buys the street in front of his house from the government. I don't know how, the government just thought it was a good idea.

2-The troll then sits in front of his house with a shotgun, and shoots anyone that walks down the street for trespassing. He empties their pockets and then calls the police, which dutifully takes away the bodies.

3-If anyone asks why he doesn't build a wall or a locked gate, the troll answers that his land is clearly marked in the city hall map and people should check it before daring to walk around.

It is insanity.

Re:Troll analogy (1)

geminidomino (614729) | more than 2 years ago | (#37034526)

the troll answers that his land is clearly marked in the city hall map and people should check it before daring to walk around.

In the basement with no stairs, tucked behind a filing cabinet in an unused lavatory with a sign that says "Beware of the Leopard?"

End result (1)

robot256 (1635039) | more than 2 years ago | (#37034318)

The only thing that will change is the patent trolls will look a little more closely to make sure their targets can't defend a lawsuit. I wonder: could the previously settled parties use this judgement as the basis of separate legal action against the troll, seeking damages for extortion? Not that it would be that much cheaper than defending the patent suit in the first place.

Bitch Mainwol, are you listening ? (0)

Anonymous Coward | more than 2 years ago | (#37034372)

Ok, well, the first letters of the first and last names have been transposed,
but all you folk who paid attention to the extortion performed by the RIAA
know exactly who I am referring to, and you know he is a subhuman piece of waste.

Patent trolls ruled illegal businesses? (1)

phoebus1553 (522577) | more than 2 years ago | (#37034948)

From TFA

Separately, the court clearly noted the "non-practicing entity" part of the business in pointing out that, "As a non-practicing entity, Eon-Net was generally immune to counterclaims for patent infringement, antitrust, or unfair competition because it did not engage in business activities that would potentially give rise to those claims."

By this ruling, It would seem that all companies that are just patent holding companies are not allowed to do anything with them unless they produce a product. That would appear to be too good to be true, so going to just file this article away in the "yeah right, that's a good one" file.

Re:Patent trolls ruled illegal businesses? (0)

Anonymous Coward | more than 2 years ago | (#37035314)

I think you misunderstand. The judge is further reinforcing the notion that Eon-net is a troll with the fact that, as a non practicing entity, they cannot be liable for patent related damages.

The 9th Circuit Court of Appeals... (0)

Anonymous Coward | more than 2 years ago | (#37035230)

got something right for a change?

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