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New Bill Would Require Patent Trolls To Pay Defendants' Attorneys

Soulskill posted about a year and a half ago | from the system-and-method-for-being-a-leech dept.

Patents 196

Zordak writes "According to Law 360, H.R. 845, the 'Saving High-Tech Innovators from Egregious Legal Disputes' (SHIELD) Act of 2013 would require non-practicing entities that lose in patent litigation to pay the full legal costs of accused infringers. The new bill (PDF) would define a 'non-practicing entity' as a plaintiff that is neither the original inventor or assignee of a patent, and that has not made its own 'substantial investment in exploiting the patent.' The bill is designed to particularly have a chilling effect on 'shotgun' litigation tactics by NPEs, in which they sue numerous defendants on a patent with only a vague case for infringement. Notably, once a party is deemed to be an NPE early in the litigation, they will be required to post a bond to cover the defendants' litigation costs before going forward."

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Hmm (5, Insightful)

Anonymous Coward | about a year and a half ago | (#43035767)

Sudden outbreak of common sense?

Re:Hmm (0)

Anonymous Coward | about a year and a half ago | (#43035869)

Can't be. Must be smoke screen for something more exceedingly dumb than the usual stuff.

Re:Hmm (0)

tangelogee (1486597) | about a year and a half ago | (#43036847)

Can't be. Must be smoke screen for something more exceedingly dumb than the usual stuff.

just wait for the pork...

Re:Hmm (2)

AK Marc (707885) | about a year and a half ago | (#43037197)

NPEs didn't pay enough bribes last election cycle.

Weird sensation... (5, Insightful)

Joce640k (829181) | about a year and a half ago | (#43036019)

Why am I having a hard time believing this is real and has a hope of being passed into law?

Am I really so cynical/jaded that a good-sounding idea from government and/or lawmakers just feels like some sort of a trap? It say something about how the world's been run lately.

Re:Weird sensation... (1)

Anonymous Coward | about a year and a half ago | (#43036139)

Why am I having a hard time believing this is real and has a hope of being passed into law?

I haven't been able to verify the bill. According to Thomas [loc.gov] the house is only up to H.R. 777. Still, this is a possibility. It protects entrenched power from upstarts, which is the kind of laws that easily pass.

Re:Weird sensation... (0)

Anonymous Coward | about a year and a half ago | (#43036783)

> It protects entrenched power from upstarts

I think you have that backwards

Re:Weird sensation... (1)

MickLinux (579158) | about a year and a half ago | (#43036259)

Me being a pessimist, I figure it could be real, and could be quite likely to pass.

It should put the nail it the coffin of those annoying inventors applying for patents, and keep the patents where they should be, in the hands of the overlords.

If this law is tailored to the job, not only will you have to be able to afford to go round after round of appeal, but if you lose on any of them, you face instant financial ruin. So then if the ones you sue don't come to terms, then your goose is cooked before you begin.

Not that the intent of Patent law wasn't to do as the constitution states... but any time you have a law that goes against natural law [and for someone to own another person's thoughts, methods, or skills does go against natural law], it's going to wreak destruction.

Come, Lord Jesus!

Re:Weird sensation... (4, Informative)

Anonymous Coward | about a year and a half ago | (#43036489)

If this law is tailored to the job, not only will you have to be able to afford to go round after round of appeal, but if you lose on any of them, you face instant financial ruin.

If it's actually *your* patent, or if you're actively using the patent to do something other than suing people, then the requirements to post bond and pay the defense costs don't apply.

It's all in the wording... (1)

Frosty Piss (770223) | about a year and a half ago | (#43036269)

Why am I having a hard time believing this is real and has a hope of being passed into law?

And even if it does become law, the wording is ambiguous:

...and that has not made its own 'substantial investment in exploiting the patent.'

What *exactly* does this mean? I'm sure that Patent Trolls can work the language to their advantage, especially in
South Texas, or where ever the local Media are cleaning up on Patent Troll cases...

Re:It's all in the wording... (3, Insightful)

AlphaWolf_HK (692722) | about a year and a half ago | (#43036329)

The preamble to the bill isn't the bill itself. My guess is that there is or will be wording within the fine print that will spell out exactly what that is.

Re:Weird sensation... (2)

Sqr(twg) (2126054) | about a year and a half ago | (#43036501)

Really, all that's needed for this to pass is that the patent trolls decide it would be cheaper to pay the defendants' legal fees than to buy a few senators to oppose the bill...

just another club to protect large corporations (1, Interesting)

Anonymous Coward | about a year and a half ago | (#43036599)

Why am I having a hard time believing this is real and has a hope of being passed into law?

Because you haven't realized that if this was passed then large companies who've stolen an idea from a non-corporation inventor before he/she has obtained funding to manufacturer his/her idea will use the threat of large-company-size legal bills to browbeat the independent inventor into forgoing a suit and settling for peanuts instead of what they would have paid if they had to license the invention from another large corporation.

*I* would have a hard time believing this *won't* be passed into law.

Re:just another club to protect large corporations (5, Insightful)

Stiletto (12066) | about a year and a half ago | (#43036923)

The "lone inventor around the corner" using his patent to fight the big corporations is kind of a myth nowadays. Patents are used to stifle innovation and protect entrenched businesses, not to prevent corporations from stealing the little guy's ideas. I'm pretty sure the vast majority of patent-holders are corporations.

Re:just another club to protect large corporations (3, Insightful)

viperidaenz (2515578) | about a year and a half ago | (#43037887)

Unless the non-corporation inventor has their name as the inventor of the patent, then this bill doesn't apply.

Its to protect large companies from patent trolls.
Requiring the bond to be posted first stops shell companies just going bankrupt to avoid payment if they fail.

Re:Weird sensation... (-1)

Runaway1956 (1322357) | about a year and a half ago | (#43036683)

Remember the thing about "unintended consequences".

This actually does look like a good idea. But, as always, follow the money. Who dreamed this up? Why? Who supports it? Why?

I'm a bit cynical here. This good-sounding law may well be applied in ways that we aren't anticipating.

Joe Headbanger comes up with an idea, all on his own. He's banged his head against the wall for a few years now, and finally come up with a pretty good idea. He patents the idea. He even makes a prototype or six. He attempts to get financing, and fails. Or, maybe he gets financing, and THEN fails. He just never gets a product to market.

Meanwhile, the huge conglomerate (You choose - Apple, Monsanto, Kawasaki, maybe the Catholic Church!) puts something similar on the market. Good old Joe sees the product at Wally World, and sues.

Joe gets shot down before he ever gets to court, because they claim that he's an NPE.

So, I'm scratching my beard, and wondering . . . is it good, or is it another power grab from the usual culprits?

Re:Weird sensation... (3, Informative)

Antipater (2053064) | about a year and a half ago | (#43036809)

In that case Joe is the original inventor/assignee and thus exempt from the law.

Re:Weird sensation... (2)

interval1066 (668936) | about a year and a half ago | (#43037033)

Remember the thing about "unintended consequences".

I absolutely agree, few laws get passed that don't screw some one else somewhere. But this is at least a step in the right direction. This action has been a long time coming and hopefully won't have many bad side effects.

Re:Weird sensation... (1)

tnk1 (899206) | about a year and a half ago | (#43037069)

It is probably not a power grab, actually. Working in a business where my company has been threatened by patent trolls (and we settled), the fact that trolls can simply extort settlements out of producing companies is all the motive required.

There's no need for a move like this to move forward some sort of sinister agenda: there is plenty of money and uncertainty to be saved in simply ending this practice on it's own merits alone.

Re:Weird sensation... (1)

MozeeToby (1163751) | about a year and a half ago | (#43037049)

My question is what prevents this:

Company X is our patent troll, decides to sue someone.
Company X's owners establish Company Y with just enough money to litigate their side of the case
Company X sells the rights to a patent to Company Y for a pittance
Company Y Sues and loses
Compnay Y Has no holdings beyond the now largely useless bogus patent so it dissolves
Company X loses nothing except the patent, which again, is now largely useless

If Company Y wins, they sell the patent back to Company X and the owners cash out.

Re:Weird sensation... (1)

lpp (115405) | about a year and a half ago | (#43037345)

IANAL but I suspect that in a case like this the judge would pierce the corporate veil since Company Y is clearly just an attempt to circumvent the intent of the law with a legal fiction. Specifically that Company Y is truly acting independently when in fact it is acting purely within the parameters dictated by Company X and purely within the interests of Company X.

Re:Weird sensation... (0)

Anonymous Coward | about a year and a half ago | (#43037889)

Why am I having a hard time believing this is real and has a hope of being passed into law?

Am I really so cynical/jaded that a good-sounding idea from government and/or lawmakers just feels like some sort of a trap? It say something about how the world's been run lately.

The patent trolls will just pull a Dave Hester and declare bankruptcy when they loose a case. The big corporations won't care, to them legal costs are chump change.

Re:Hmm (3, Insightful)

butalearner (1235200) | about a year and a half ago | (#43036111)

Almost. Of course, this bill is full of weasel words so it'll never pass, and we're still dancing around the two things we need:

1) Software patent reform.
2) Loser pays for every kind of lawsuit, not just patent troll suits. You know, like every other sane country on the planet.

Re:Hmm (1)

Anonymous Coward | about a year and a half ago | (#43036283)

Yes, but loser pays isn't a panacea for our problems, the fact is that if you don't win, that's not necessarily because you didn't have a case, if your attorneys weren't as good or you didn't have experts that were as good, you can still lose. Not to mention the times when you just have bad luck.

For a major corporation, settling midway through or paying the fees isn't that big of a deal, but for those of us that aren't billionaires, loser pays represents a very real deterrent to taking advantage of the legal system where one can't afford the possibility of losing.

Re:Hmm (1)

butalearner (1235200) | about a year and a half ago | (#43036575)

Yes, but loser pays isn't a panacea for our problems.

If it was perfect, then it'd already be law. But it's almost certainly better than what we've got if the point is to stop frivolous lawsuits.

loser pays represents a very real deterrent to taking advantage of the legal system where one can't afford the possibility of losing.

I assume you don't mean "exploiting" because that's exactly the point. I couldn't have said it better myself.

Re:Hmm (5, Insightful)

tnk1 (899206) | about a year and a half ago | (#43037167)

No, he means a legitimate small player *making use of the system as it was intended under the concept of equal protection under the law*. Having money is not supposed to be a prerequisite for obtaining justice in the US, at least in theory, of course.

I should be able to sue Apple or Samsung or some other multinational and if my case is correct and proven under the law, I not only deserve to win, I am supposed to win.

The fact that patent trolls can weasel into the space left for the small guy to have his voice heard doesn't mean that that method becomes expendable. It means we need a solution that filters patent trolls out better.

I agree that trolls need to be stopped. My own organization have been extorted by them. They're a parasitic entity made possible by government rules that would not exist without a broken patent system. However, fix the patent system, don't simply carpet bomb any requests from people who don't have money.

Re:Hmm (2)

subanark (937286) | about a year and a half ago | (#43036667)

It is a big deal to those corporations. Although settling isn't that big of a deal, the money they pay the patent trolls only empower them to buy more patents and sue more companies. Also, there are some really gutsy patent trolls that don't settle and instead try to get the jury to pay the off big. "Members of the jury, the sale of the companies product is in use by their product. For this reason we want a mere 5% of the total sales of their devices" (They say this in an industry where the profit margin is 5%). And this is assuming that the patent trolls don't prove willful infringement.

These corporations have the big bucks, they have the lobying power to push this law though, and those patent trolls have finally become annoying enough to hurt them. What I fear is that the patent trolls will find the inventors and offer to back license the patent and represent them in court for a mere 90% of the payoff.

WTF? (5, Informative)

s.petry (762400) | about a year and a half ago | (#43036711)

Wow, did you read anything at all or did you see "patent" and just start posting? If you read anything and are posting, you must be a shill. If you didn't read, shame on you. "loser" in this case is limited to a defendant where it's deemed that the company initiating the suit is a troll. The wording in the article states very clearly that if you are deemed a NPE (more on that in a moment) then you must pay a bond to cover the defendant's cost in order to pursue the case.

NPE: You are a widget maker, and competing with 10 other widget makers in the market place. Trollguy buys a patent for a screw that you use in your widget and he sues every one of you dirty widget makers for infringing on his patent for a widget-screw. He does not make widgets, did not invent a widget, and in fact his current business is buying patents and suing people. He would be by definition a NPE. As a NPE, he needs to bond the defendant's legal fees, for every one of those cases of alleged infringement, in order to pursue the cases.

That is a good thing!

In addition: If the infringement claim is dies in court you, Mister Widget, immediately recoup your legal fees by cashing in the bond.

Now if Joe's Widgets sues you for stealing their rounded corner widget design, they are not a NPE. They do not have to bond your legal fees. So the law does not harm normal competition and does not punish inventors. It's at least "some" protection from the current joke that has become patent trolling.

Since I have not fully read the Bill I can not claim that the wording is secure and clear enough to really do anything. Politicians are generally shitheads, and even the best written and intended Bills can get screwed up by their idiocy. That fact is rarely the Bill's fault, but rather the people's fault for voting in shitheads over and over and over again.

Re:Hmm (4, Insightful)

dc29A (636871) | about a year and a half ago | (#43036439)

Even if this law passes, it won't work because the patent office keeps granting vague patent after vague patent.

Re:Hmm (2)

Stiletto (12066) | about a year and a half ago | (#43037027)

Loser pays is a terrible idea, unless you can guarantee that the legal system 100% of the time accurately determines who is wrong (as opposed to who has the best/most lawyers). As a person with limited resources, I would never be able to risk suing a corporation over something, because, even if I had a 1% chance of losing, that chance would mean instant bankruptcy for me. Similarly, corporations would have even more incentive to use bogus lawsuits to extract settlement money from individuals who would never be able to afford to pay both sides' lawyers.

Re:Hmm (4, Insightful)

AK Marc (707885) | about a year and a half ago | (#43037281)

Loser pays is a terrible idea, unless you can guarantee that the legal system 100% of the time accurately determines who is wrong (as opposed to who has the best/most lawyers).

Without loser pays, anyone who gets sued already lost. You get to pay millions to prove your innocence. So there's a loss for being innocent. Loser pays fixes that. What would you propose to protect the innocent from frivolous lawsuits?

Re:Hmm (4, Interesting)

Anne Thwacks (531696) | about a year and a half ago | (#43037657)

Loser Pays applies to virtually the entire rest of the galaxy, and, while not perfect, it is way better than the Loonie Tunes US approach. Here in the UK, it applies to both criminal and civil law in 100% of cases, unless the judge decides the loser was partly to blame - eg deliberately made himself look guilty to attract a law suit.

Great (0)

Pingo (41908) | about a year and a half ago | (#43035811)

That's about time.

Re:Great (0)

Anonymous Coward | about a year and a half ago | (#43035899)

Yeah, because every bill that is introduced in the House passes. Nothing to see here, move along.

Re:Great (1)

EvanED (569694) | about a year and a half ago | (#43036021)

Yeah, because every bill that is introduced in the House passes.

They pass more frequently than when bills which are not introduced.

Re:Great (0)

Anonymous Coward | about a year and a half ago | (#43037019)

Not by much.

Re:Great (-1)

Anonymous Coward | about a year and a half ago | (#43035915)

That's about time.

Yeah, we've needed a bunch of bullshit token implementations of vague patents clogging up small shell companies solely to get around the definition of an NPE! But thanks to this bill, if it passes, sleazeball lawyers will work long, hard hours to determine, with surgical precision, the exact minimum degree to which these the patent trolls have to manufacture or implement their ill-gotten patents to pass muster in a very specific Texas district court! PROGRESS!

original assignee.. (1)

helobugz (2849599) | about a year and a half ago | (#43035867)

But what if I sell/assign an invention to a patent troll right off the bat before it issues...?

Re:original assignee.. (1)

denis-The-menace (471988) | about a year and a half ago | (#43035895)

Not your problem since it is sold.

It's the Troll's problem.

Re:original assignee.. (1)

Maximum Prophet (716608) | about a year and a half ago | (#43035945)

Or the trolls just start rolling their own bogus patents.

Re:original assignee.. (1)

Joce640k (829181) | about a year and a half ago | (#43035985)

They still have to exploit the patent, ie. make a product.

nb. This assumes the Slashdot summary is accurate and there's no hidden loopholes.

Re:original assignee.. (1)

Maximum Prophet (716608) | about a year and a half ago | (#43036897)

They still have to exploit the patent, ie. make a product.

nb. This assumes the Slashdot summary is accurate and there's no hidden loopholes.

But that product doesn't have to actually *work*.

Also, they'd probably only have to offer the product for sale. Actual customers wouldn't be necessary.

Or two separate patent trolls get into the business of building products and selling exactly one each to each other for $1,000,000. If the law tries to prevent this, they use 3 trolls and a few shell corporations so they are all classified "Practicing Entities".

Re:original assignee.. (1)

firex726 (1188453) | about a year and a half ago | (#43036025)

I believe in order to sell a patent you would have to wait till it's actually issued. You could do the negotiations ahead of time, then when it's issued to you, hand it over.

Re:original assignee.. (1)

retchdog (1319261) | about a year and a half ago | (#43036433)

My pending patent has already been assigned to my superiors. I'm not sure exactly how this is implemented, but i think the point of the law is to allow this kind of thing (it's how capitalism is supposed to work, after all) while stopping the kind of patent troll which buys up a collection of older, tactically useful, patents for pennies and then spams lawsuits with them.

A non-practicing entity could still acquire patents and troll with them, if they were the original assignee. So, it's a conservative law; it attacks only the most flagrant case of trolling, while giving the benefit of doubt elsewhere. Upon a few seconds of reflection, one realizes that this is a good thing.

A better bill (1)

Anonymous Coward | about a year and a half ago | (#43035891)

would require patent trolls' attorneys to go unpaid.

Re:A better bill (4, Insightful)

Lord Apathy (584315) | about a year and a half ago | (#43036157)

I like this bill but I would take it a step farther. If the patent troll loses, not only do they have to pay the defense, they need to compensate the poor SOB they sued, AND they need to lose access to the original patent they where suing over.

Re:A better bill (0)

Anonymous Coward | about a year and a half ago | (#43036305)

That wouldn't be fair. The entire purpose is to pay people that do work. The lawyers are the only people doing work there, so at least they should be paid.

Worse for small folks? (2)

thePowerOfGrayskull (905905) | about a year and a half ago | (#43035905)

Seems to me that this will just encourage greater extortion of small shops - those that can't afford to even consider taking a case to court.

Re:Worse for small folks? (1)

alen (225700) | about a year and a half ago | (#43035921)

they can't afford court right now either

Re:Worse for small folks? (2)

thePowerOfGrayskull (905905) | about a year and a half ago | (#43035983)

Correct. But this makes it worse for them inthat they will be increasingly targeted by NPEs who don't want to take the risk of going to court with one of the big players.

Small is an advantage (2)

sjbe (173966) | about a year and a half ago | (#43036097)

Correct. But this makes it worse for them inthat they will be increasingly targeted by NPEs who don't want to take the risk of going to court with one of the big players.

Unlikely. The reason they don't usually go after the small companies is because they are small, i.e. they have no money. There is little point in spending much money trying to extort a tiny settlement out of a company that the NPE may very well bankrupt in the process. If I'm a small company I would basically say "bring it on". They'll spend more money on lawyers than they would win in a settlement and even if they did win they probably would get nothing because the company would declare bankruptcy.

Re:Worse for small folks? (1)

HaZardman27 (1521119) | about a year and a half ago | (#43035939)

They only have to pay if it's deemed that they haven't done anything to use the patent and aren't the original owners of the patent. How many legitimate (aren't patent trolls) small shops are buying up patents and sitting on them?

Re:Worse for small folks? (0)

Anonymous Coward | about a year and a half ago | (#43036225)

Well, if you're a small shop and spend your tiny budget on buying up patents which you then don't even use: Non-survival of the dumb?

Re:Worse for small folks? (4, Insightful)

Chemisor (97276) | about a year and a half ago | (#43035967)

A small shop can not afford to take a case to court even without paying the defendant's lawyers. An IP lawsuit costs millions of dollars to pursue; more money than any normal person will make in his entire working lifetime. The courts are for the big fish. For the rest of us, any involvement with them leads to bankrupcy.

Re:Worse for small folks? (5, Informative)

Psyborgue (699890) | about a year and a half ago | (#43036743)

That depends. Some lawyers are willing to take defense cases on a contingent fee basis. I was sued once for defamation. Because the case was filed in a state where there were strong anti-SLAPP laws, my, normally 500/hr lawyers took the case for (mostly) free with a relatively small retainer. They were so confident the case was bs, had no chance of winning, and that they could get paid through the anti-SLAPP statute, they were willing to take the small risk of losing. The case ended up costing the plaintiff probably close to half a million by the time the dust settled (the judge even granted them a 1.5x multiplier for their risk). The point is there are lawyers out there who are willing to take these sorts of cases if there are statutes out there that will allow them to get paid. I think this sounds like a good law, even for the small guys.

Re:Worse for small folks? (1)

ceoyoyo (59147) | about a year and a half ago | (#43036379)

Small patent trolls won't be able to go to court? My heart weeps.

Your logic is faulty (2)

s.petry (762400) | about a year and a half ago | (#43036453)

Small shops are not out there filing lawsuits against numerous alleged patent infringing companies. Generally they are the targets of that approach. The bill would allow the targets of patent trolls the ability to recoup losses that they currently have no ability to recoup. Currently the defendants either pay the troll, or pay for lawyers to fight. There is no recovery currently for any part of the trial. The current methods of patent trolls are extortionist.

You phrase the problem like the patent trolls are the victims. That is absolutely not the case.

Congress is better than Marvel? (3, Funny)

Anonymous Coward | about a year and a half ago | (#43035919)

S.H.I.E.L.D.
"Strategic Hazard Intervention Espionage Logistics Directorate"
"Saving High-Tech Innovators from Egregious Legal Disputes"

I think congress pulled a fast one on Marvel and beat them hands down!

AC experimenter and I give a rats ass to anyone who cares!

Re:Congress is better than Marvel? (1)

nametaken (610866) | about a year and a half ago | (#43036625)

Oh damn, now we need a legislative working group for a bill to shield people from copyright suits.

Maybe call 'em... the Justice League?

Acro (0)

Anonymous Coward | about a year and a half ago | (#43035923)

I freaking love acronyms

SCO == Entertainment! (0)

hol (89786) | about a year and a half ago | (#43035931)

The would deprive us of watching another Darl McBride style train wreck!

Seriously, I learned a lot about the legal system from the "SCO Stupid" (sm). Other than that, I agree, common sense ... about something at last.

Re:SCO == Entertainment! (1)

ceoyoyo (59147) | about a year and a half ago | (#43036385)

SCO wasn't a non practicing entity.

Re:SCO == Entertainment! (1)

gstoddart (321705) | about a year and a half ago | (#43037839)

SCO wasn't a non practicing entity.

Well, you have to clarify which SCO you meant. It's had several incarnations.

The SCO which sold software (Caldera Linux and some others) wasn't an NPE.

The litigious bastards which have been the last two (I think) iterations of SCO have in fact been NPEs in that they transferred their claims to a company who existed solely to sue.

There is no single entity which has continuously been SCO in all of this, and at least a few of them have been NPEs.

Nice (0)

Troyusrex (2446430) | about a year and a half ago | (#43035949)

That sounds great. I hope it actually passes...

As a committed progressive Obamunist... (-1)

Anonymous Coward | about a year and a half ago | (#43035969)

...I just so happen to support whatever is most harmful to small business owners and individuals (provided they are white, straight, and actual citizens). With that being said, I don't support this law because I favor big business and prefer the little guy to be totally powerless in the face of our new globalist governance.

FORWARD!

Write your representative (1)

characterZer0 (138196) | about a year and a half ago | (#43036005)

Re: Thomas (0)

Anonymous Coward | about a year and a half ago | (#43036849)

"Your Search Has Timed Out
Search results in THOMAS are temporary and are deleted 30 minutes after creation. Please try your search again. "

"substantial investment" (2)

arcctgx (607542) | about a year and a half ago | (#43036033)

Does filing a lawsuit count as a "substantial investment in exploiting the patent"?

Will change very little (0)

Anonymous Coward | about a year and a half ago | (#43036039)

So only if you end up in court and are classified as troll do any of these minor annoyances\penalties apply. This is not going to change the game significantly at all for most of the players or victims. Maybe just maybe a few of the smaller trolls may back off a few very weak cases if a company says 'see you in court' but that's about it.

Regulate Bad Patents, Not Independents (4, Insightful)

Bob9113 (14996) | about a year and a half ago | (#43036041)

The bill is designed to particularly have a chilling effect on 'shotgun' litigation tactics by NPEs, in which they sue numerous defendants on a patent with only a vague case for infringement.

So to achieve that, instead of addressing shotgun litigation by any litigant, they create an inhibition to all NPEs. That would include things like the The Open Invention Network [wikipedia.org] , and would exempt practicing entities like SCO. Does that sound right?

This legislation would create unequal patent protection for big corps versus independent inventors. Once a patent is sold by its original inventor, it can only subsequently be sold to big corps or it loses some of its power. This means big corps will have an advantage compared to independent inventors, who will have less ability to market their inventions.

If the problem is shotgun patent enforcement, regulate shotgun patent enforcement. If the problem is overbroad patents, narrow the allowed scope of patents. Address the real problem with equal treatment for all litigants under the law. Don't create a preferred class for big incumbent corps and inhibit independent competition.

This is nothing more than another land grab by big incumbents who use our government to inhibit free market competition.

Re:Regulate Bad Patents, Not Independents (3, Informative)

ceoyoyo (59147) | about a year and a half ago | (#43036451)

Yes. The Open Invention Network shouldn't be suing people on flimsy grounds either.

Not to mention that the OIN has members like Google. If one of their members is a practicing entity, the OIN can likely make a good argument that they are as well.

Re:Regulate Bad Patents, Not Independents (2)

Java Pimp (98454) | about a year and a half ago | (#43036765)

But then a NPE could enlist a more shady company as a "member" (think SCO) and make the same argument.

Re:Regulate Bad Patents, Not Independents (1)

jedidiah (1196) | about a year and a half ago | (#43037247)

A loss at trial does not imply "flimsy grounds".

That is the basic problem with any sort of "loser pays" approach. It primarily just increases the cost of litigation. It will probably not just be restricted to "evil people".

Measures intended to "punish evil people" don't really address the root of the issue. They just sound good to the masses. It's the perfect sort of "feel good and do nothing" measure.

Ultimately, they just open the door for bad ideas that end up victimizing "nice people" sooner or later.

Re:Regulate Bad Patents, Not Independents (5, Informative)

IP_Troll (1097511) | about a year and a half ago | (#43036535)

No that sounds completely wrong.

1. The Open Invention Network actively licenses the patents it holds, so it would not be considered an NPE.
2. The SCO litigation was about copyright, not patent.
3. Your statement about unequal protection is false, a non sequitur, and illogical. Big corporations do not "own" the patents it. A shell company in a tax haven like Ireland owns the patents and license them back to the parent, and other licensees. If the Open Invention Network is considered an NPE then so are these shell companies.
4. Attorneys fees to a defendant are already allowed in many types of cases when it is determined that the plaintiff had no business filing suit, including patent litigation. Revising the patent law so that a bond has to be placed before the suit can go forward ensures the wrongfully accused defendant will actually get paid and the plaintiff can't just vanish after they lose, thus leaving the defendant with the attorneys fees.

Your visceral knee jerk reaction to a concept that you do not understand is absurd.

Re:Regulate Bad Patents, Not Independents (1)

erice (13380) | about a year and a half ago | (#43037449)

No that sounds completely wrong.
1. The Open Invention Network actively licenses the patents it holds, so it would not be considered an NPE.

Licensing patents to others is what patent trolls do. It would not meet the criteria of "substantial investment in exploiting the patent".

I think the original inventor would need to be part of the network in order to avoid the NPE classification.

Re:Regulate Bad Patents, Not Independents (0)

Anonymous Coward | about a year and a half ago | (#43036731)

Since the OIN is like CCL in that tries to address the issues with the system while using the system. If this gets put in place and can actually put a dent in the patent troll issue, can't the OIN simply restructure to provide the same protection as before but without running a foul of the new law? For instance, instead of combining all of the patents into one spot that then doesn't use it for anything, it could be a coalition of patent holders that agree to collaboratively come to the defense of anyone that gets sued by a big corp.

It's a good start... (3, Insightful)

alittle158 (695561) | about a year and a half ago | (#43036061)

How about just barring the eastern district of Texas from hearing any cases on patents?...

While you are at it... (0)

Electrawn (321224) | about a year and a half ago | (#43036085)

Create a federal patent court circuit with knowledgeable judges, and be specific to exclude the eastern district of Texas for systematic bias.

Re:While you are at it... (2)

stevejf (2724307) | about a year and a half ago | (#43036199)

Oh you mean like the Federal Circuit [wikipedia.org] ?

Hurray for the big guys! (1)

michaelcole (704646) | about a year and a half ago | (#43036121)

Hurray! Patent reform finally arrives for those who make "substantial investment in exploiting the patent". Apple, Google, IBM, Oracle be saved! Now get back to work!

Why is this not for everything? (1)

Skapare (16644) | about a year and a half ago | (#43036147)

While patent lawsuits are particularly important, why is it that we have to make a new law for this at all? Shouldn't we have this for all lawsuits across the board? It can still be allowed for judges to decide in specific cases if the situation does not warrant this requirement. But overall it should normally be the way it is done.

Re:Why is this not for everything? (1)

wvmarle (1070040) | about a year and a half ago | (#43036361)

Is it in all civil cases so that loser pays winner's cost, and court cost?

In that case it would indeed be quite reasonable that when initiating a law suit, the plaintiff should post some kind of guarantee that they will pay loser's cost (preferably a fixed amount based on type of lawsuit etc, so that this is known before the suit is initiated and not dependent on the mood of the judge). That might make actually getting the money afterwards a little less impossible.

OTOH this can not reasonably be asked from defendant, who usually doesn't even want to go to court to begin with.

Re:Why is this not for everything? (1)

SydShamino (547793) | about a year and a half ago | (#43036753)

What you propose would make it nearly impossible for a private citizen to ever, ever again sue a corporate citizen. Big corporations have dozens of lawyers on staff, so they can easily rack up "millions" of dollars of work on a lawsuit. (Of course, if the suit were never filed, those lawyers would have instead racked up millions of dollars of work doing something else as they are salaried employees.) With the chilling effect of you having to pay those fines if you lose the lawsuit, why would you, a mere citizen with a lawyer working on a small retainer and a percent of your winnings (if any) ever risk destroying your financial life to file your suit?

Unfortunately, the existing system means that citizens can file trivial suits alongside citizens that file the important suits protecting private citizens from corporations. But your proposal eliminates both types.

only half the surface area (0)

v1 (525388) | about a year and a half ago | (#43036181)

addressed here. The other half is where people get patents on stupidly obvious things and sit on them ("submarine patents", like online shopping cart) and then, without ever having attempted to implement the patent, pounce when someone else does something loosely similar.

So it only covers half the problem, only affecting those that buy said patents as fire for their litigation, but this is a good start anyway. This will at least deal with the larger patent trolls that make their entire business model out of buying patents that should have never been issued, and them using them to game the patent system and extort money. They really never had a hint of innovation, even if the original inventor may have.

Re:only half the surface area (4, Insightful)

Splab (574204) | about a year and a half ago | (#43036365)

Geesus christ, whats with the negative vibes coming from the Slashdot crowd???

No, they do not fix everything at once, so fucking what? They are at least trying to fix part of the problem.

Yeah would be nice to have all the worlds problems solved in one go, but you know what, it's much easier to fix it if we solve it one step at a time.

Re:only half the surface area (1)

jedidiah (1196) | about a year and a half ago | (#43037271)

It's a band aid on a bullet wound and nearly everyone here has enough of a clue to understand it.

Loser Pays... (2)

tmshort (1097127) | about a year and a half ago | (#43036267)

So, why doesn't this apply to all civil lawsuits? This is how it works in many countries thus their courts aren't tied up as bad as ours (i.e. American).
http://en.wikipedia.org/wiki/Loser_pays [wikipedia.org]

Re:Loser Pays... (1)

erice (13380) | about a year and a half ago | (#43037605)

So, why doesn't this apply to all civil lawsuits? This is how it works in many countries thus their courts aren't tied up as bad as ours (i.e. American).
http://en.wikipedia.org/wiki/Loser_pays [wikipedia.org]

Justice is imperfect. If the little guy who is in the right sues a big corporation and loses, he could be bankrupted by the big corporation's legal fees.

EFF piggy bank of infinite funding? (1)

shentino (1139071) | about a year and a half ago | (#43036465)

If this allows reimbursement of attorney's fees for patent troll attacks, will it induce charities like the EFF to bankroll a defense attorney if it can recover its legal fees from the plaintiff?

Little guy (2)

EmperorOfCanada (1332175) | about a year and a half ago | (#43036635)

I love that they have singled out patent trolls as opposed to making it hard for some basement inventor to defend himself. Bravo!

Have they been reading my blog? (1)

gurps_npc (621217) | about a year and a half ago | (#43036671)

Granted, I was talking about DMCA takedown notices, but it is the same concept: relevant blog post [blogspot.com]

Bandaid (1)

Anonymous Coward | about a year and a half ago | (#43036715)

This is a Bandaid solution. It doesn't address the real problem - too many bad patents are being issued.

Re:Bandaid (1)

RandomFactor (22447) | about a year and a half ago | (#43037031)

When you put a bandaid on a cut...it still hurts, but it's better.

Re:Bandaid (0)

Anonymous Coward | about a year and a half ago | (#43037639)

not if the "cut" was caused by a 105 MM howitzer...

Not going to stop anything.. (0)

Anonymous Coward | about a year and a half ago | (#43036895)

If you read the text of the bill, it says that the "original assignee," if they filed the application can still sue. Trolls often buy patents from defunct companies. All they need to do is buy the company instead, keep it as a separate subsidiary and sue away. This isn't going to stop anything.

Second, this adversely affects legitimate patent defense. Let's say you are sued by a practicing entity on some b.s. overbroad software patents. Well, a common strategy is to license patents from another company and sue back. (i.e. best defense is a good offense). Well under this law if you get sued, you better have your own patents, or you are out of luck.

Is everyone stupid? (0)

MouseTheLuckyDog (2752443) | about a year and a half ago | (#43036903)

To actually believe this will help? All patent trolls have to do is spoin off shell corporations that funnel the winnings back to the troll and declare bankruptcy if they lose. In fact trolls already do this because judges have the power to access cost in frivolous actions.

Re:Is everyone stupid? (1)

Billy the Mountain (225541) | about a year and a half ago | (#43037761)

I think that's right. It's the loophole you can drive a truck through. But hopefully this will inspire other more meaningful legislation.

Re:Is everyone stupid? (0)

Anonymous Coward | about a year and a half ago | (#43037911)

Exactly, although if the "company" doesn't have any money to begin with, they really don't have to file for bankruptcy, just make sure to be an LLC with ownership of a few worthless patents. Any money the "company" has will naturally get filtered out and whoever they sue and lose will end up with huge legal bills and a few worthless patents.

Not Enough of a Disincentive (1)

hemo_jr (1122113) | about a year and a half ago | (#43037203)

Having the plaintiffs in a false claim pay 1.5x to 2x the defendants costs would be better. Perhaps the assessing of higher costs could be left up to the court, if the lawsuit was determined to be egregious.

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