The eyes of the patent world were on Seattle this week as an Order denying injunctive relief was handed down in the ongoing Microsoft v. Motorola heavyweight title bout.
While I will leave it to others to discuss the minutiae and determine the implications for the industry, the main question on my mind is whether this is what Motorola and other large companies had in mind when they welcomed the decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
Now admittedly, I do not know whether Motorola ever considered itself victimized by "patent trolls" or whether it held the view that patents, and in particular injunctions, should be reserved only for "serious" and "established" businesses. But I have a sneaking suspicion that Motorola, its lawyers, and others in similar situations might well be thinking, "Hey! This isn't how eBay was supposed to work."
For grins, check out the docket sheet for the case as well. More than thirty-four pages just to list the lawyers involved. (As a former big firm mouthpiece myself, I can well understand the pressure to hit your hours, particularly in a soft economy.)
It is always amusing to watch the intellectual gymnastics of clever people trying to defend the intellectually indefensible. Seventh Circuit Appellate Judge Richard Posner'r recent, article, "Patent Trolls Be Gone" (You talkin' to me, Judge?) is entertaining in this regard, as we watch the good judge try to "clarify" the "problems with our patent system, which are profound," before formulating, "feasible solutions."
According to the judge, one of these profound problems is the problem of "patent trolls, as they are called" who "purchase large numbers of patents in the hope of using the threat of a patent-infringement suit to extort a patent-license fee from a company that makes a similar product." (Emphasis mine.)
Extort? Since when is enforcing rights formally recognized by a Federal agency extortion? Strong words to be coming from a supposedly impartial judge.
As noted by the judge, "the alleged infringer may decide to pay the licensee fee, if it is not too large, to avoid the cost of litigation." But this raises the question of why does it take $3 million or more in legal fees to dispose of a case that supposedly has no merit in the first place? Most jurisdictions today have specific local rules for patent cases that call on a patent owner state with specificity in the very early stages of litigation precisely what products are accused of infringement, what claims are alleged to be infringed, and precisely how those claims cover the accused products. In a truly baseless case, the weakness becomes apparent very early on. (And if the case is that weak, no reasonably ethical lawyer would file it in the first place.)
The comments in the linked article are entertaining and instructive as well.
A few years back I wrote about what I saw as a developing "War on Juries" in patent cases. A couple of recent incidents suggest that the war continues.
Last week we lost a hard-fought case on summary judgment. That happens, it's part of the game, and the lawyer who never loses most likely never accepts a real challenge either. But what's humorous about it is that the decision came four days after trial was originally scheduled to have begun. Given that the whole idea of summary judgment is to increase efficiency and resolve one-sided cases early on, the fact that the case could have been tried to a verdict in less time than needed for summary judgment leaves me scratching my head.
This week, the Federal Circuit (surprise, surprise) overturned yet another lower court decision in favor of a patentee. In that case, the judges concluded that the invention was "obvious" based on some sort of "common sense" inventive standard. (Guess that's kind of up there with the "we know it when we see it" standard.)
What strikes me about both developments is all the judicial lip service paid about what "the trier of fact" could and could not reasonably conclude. Rather than simply present the evidence to the actual trier of fact, i.e., a jury, the courts prefer to spend more time, effort and money guessing about what a jury could find rather than simply presenting the evidence and finding out for real.
The elephant in the room is that juries play little, if any, real role in patent litigation today. Courts still seat them (if you get that far) as some sort of quaint hold-over from the past, but as far as their decisions actually carrying any weight, well, given that virtually every important question is now an issue of law, and hence reviewable de novo by the CAFC, the sad truth is that you will win only if the handful of judges there decide to let you win.
Hope I'm wrong about this, but the handwriting is on the wall. And it doesn't look encouraging.
Count me among the latest to question whether the Eastern District of Texas is still THE venue for bringing plaintiff's patent cases. A "Rocket Docket" it ain't.
We've filed a fair number of cases in the Eastern District over the years. Although things used to move with dispatch, in one of our latest, the first available date for a Markman hearing was June 2010. In another case, we are awaiting a Markman ruling following a hearing in April 2007.
And check out this apparently routine order we just received. Basically, it requires asking for permission before filing a whole host of motions and on its face plainly states the measures are needed "Due to the large number of patent cases pending on the Court's docket."
This is all no doubt due to the Eastern District's well deserved reputation as a fair and friendly forum for hearing patent cases. But I suppose there can be too much of a good thing. The backlogs were probably inevitable.
*Yes, I am aware Houston is not actually in the Eastern District. Just couldn't resist the cheap humor.
Just when it appears things can’t get much worse for patent plaintiffs, the Federal Circuit surprises us with a modest string of decisions actually finding in favor of patent holders.
Just one week after Muniauction, Inc. (pdf) took it on the chin by having its $77 Million jury verdict reversed (that’s reversed as in “you get zip, nada, nothing”), the boys in DC actually decided one in favor of the patentee. (pdf) What’s more they did it by upholding a summary judgment finding of infringement. Hmmm, haven’t seen that in quite a while.
On August 1 of this year, they truly outdid themselves by not only reversing summary judgment findings (pdf) of invalidity, noninfringement, and inequitable conduct (with fees thrown in to boot), but directing that the case be reassigned to a different judge on remand as well. I had to pinch myself to make sure I wasn’t dreaming. I wasn’t – six days later they did it again (pdf) (well, almost – no reassignment to a new judge this time).
Then in short order they (1) reined in a potential infringer who filed an early DJ action, (2) partially upheld a jury verdict in favor of an individual patent holder, and (3) vacated a lower court’s summary judgment finding of no infringement and no liability for damages. What’s truly amazing is that in the second of these (Voda v. Cordis), they actually upheld the jury’s finding of infringement under the doctrine of equivalents – THE DOCTRINE OF EQUIVALENTS of all things! (For you youngsters who’ve never heard of it, just ask anyone in practice before 2002. He might even be able to tell you about phlogiston too.)
Speaking of ancient history, the Eight Circuit at one time was so anti-patent they had an unbroken string of 18 or 19 decisions, each finding the subject patents invalid. Finally, and no doubt recognizing that this had not gone unnoticed by the bar, they upheld some obscure patent, probably just to get one in the “win” column for a change.
While the cynical side of me says the Federal Circuit is simply doing the same thing here, (after all, even the tightest casinos have to let someone win on occasion) I’d like to think maybe the pendulum is swinging back in favor of patentees once again.
On a serious note, what I’d truly like to think is that the work former Judges Markey, Rich and others did to deliver patent law from an arcane backwater to the forefront of law has not been wasted. There is no doubt in my mind that the law has shifted away from protecting individual inventors in recent years and that some on the Court have an agenda in that direction. Whether they will win out is unclear.
Perhaps this minor string of cases upholding patent rights signals a real change back to strong patents. Perhaps they are only a minor aberration. Or perhaps the real aberration has been the first twenty years of the Federal Circuit’s existence and that what we are witnessing now is merely a reversion of the law back to what it has been all along. I’d like to think not, but the truth is that for most of the Twentieth Century patents weren’t worth much, if anything. We’ve lived through that before and it could easily happen again. Are we heading that direction? Guess time will tell.
A recent blog entry at Patently-O discusses the economics of so-called "patent thickets" (which, I gather, is the new name for what used to be called "a crowded art"). There's quite a bit of detailed and fascinating discussion concerning, among other things, the recent ebay decision and how patent owners in such a "thicket" will act, given that injunctions are (supposedly) no longer a foregone conclusion.
As I understand it, the question is whether an extensive "patent thicket" might result in more or less patent litigation and whether the ebay case will reduce or even increase patent litigation where such a thicket exits. While I don't purport to know or understand all the economic theory behind the competing views, I was struck by what I think is a misguided emphasis among the commentators. Why all the theorizing over what effect this will have on litigation and the propensity of patent owners to sue? Why all the concern whether this will encourage or discourage so-called "patent trolls"? Is the goal of the patent system simply to make life easier for lawyers and judges? Is it to let large companies steal technology with impunity? And (to be fair all around) is it simply to provide lucrative opportunities for contingent-fee patent trial lawyers like me?
The constitutional justification for the patent system is, of course, to "promote the progress of science and useful arts" -- not to provide patent lawyers with a comfortable living or to make life easier for federal judges. The question I have (and I really don't know) is whether the patent system is or is not fulfilling its mission of promoting the progress of science and useful arts. Has anyone actually done a scientific study of whether patents do promote scientific progress and whether the profound changes in the patent system over the past twenty four years have been effective in actually achieving that goal?
There's no question that the explosion in patent and IP growth has been great for lawyers. It's also been good for companies (both large and small) and even individuals able to exploit their patents. But again, the question is whether progress in science and useful arts has actually been promoted by what has gone on and what is presently going on. Frankly, I'm not sure anyone actually cares about this anymore.
One of my pet peeves has been the rule against even mentioning so-called "non-precedential" or "unpublished" opinions in briefs filed with federal appellate courts. Dennis Crouch and Law.com are both reporting that the Supreme Court has now voted to change long-standing rule and allow citation to such previously off-limits decisions. It's about time.
This whole business of "non-precedential" decisions has always struck me as both silly and dishonest. It's like saying certain historical facts and events are "non-citable" and hence off-limits for inclusion in the history books. Either something happened or it didn't. Either the court decided something or it didn't. If we are going to pay heed to the idea of stare decisis -- and there are serious questions whether we even should -- it's intellectually dishonest to gut the principle by simply pretending certain inconvenient cases were never decided.
Surprisingly, Judge Kozinski of the Ninth Circuit -- a judge whom I respect and usually agree with -- opposes the rule change and supports keeping things the way they are. In his words, "When the people making the sausage tell you it's not safe for human consumption, it seems strange indeed to have a committee in Washington tell people to go ahead and eat it anyway." True. But the real problem lies not with the committee but with the faulty sausage itself. If future litigants shouldn't have to consume the "sausage" of an ill-considered decision, why should the parties to that particular case have to eat it either?
As also reported in the Law.Com article, "Judge Alex Kozinski, the leading opponent of the rule change, said unpublished opinions were so designated for a reason: They are drafted 'entirely' by law clerks and staff attorneys." Thanks for the explanation, Judge. I'm sure that brings great comfort to whoever lost big as a result. (Personally, I suspect this procedure is also true for even the published opinions, but that's a matter for another day.)
Fundamentally, however, the problem is not with who writes the decisions and in what level of detail. The real question is whether all cases, or just some, are going to be decided on the basis of the law and facts by the people entrusted, not to mention paid, by society to do so. Or are we going to tolerate cutting corners and sweeping the problem under the rug by designating the more embarrassing results "non-precedential"? If it's ultimately a matter of overburdened courts -- and it may well be -- then we either have to provide the resources to do the job right or perhaps rethink, and cut back on, what matters should even be delegated to the courts in the first place.
Hmmm, here's an interesting comment I received today from concerned reader, email@example.com:
"And how does your view relate to the millions you spent of LizardTech's money on patent litigation, which was unjustified to begin with and a complete loss anyway? Can you spell hypocrisy?"
Well, I can spell a number of words, but I don't think that's Mr. Bolt's real question.
The truth of the matter is that I handled LizardTech's most recent appeal on a contingency and didn't make a dime on it. (When the company was paying, I was part of another firm and the decisions to proceed were made by others.) I took the case because I believed and continue to believe that the underlying findings of non-infringement and invalidity are wrong. I don't see the need to spell hypocrisy. I put my time, effort and money where my mouth is and came away with nothing. I'm a big boy and those are the risks in this business. But please don't accuse me of ripping-off a client.
As to the merits of the case, I don't see that the case was "unjustified," particularly in light of the fact that the Federal Circuit went LizardTech's way in the first appeal three years ago. Appellate courts don't usually rule in your favor in completely "unjustified" cases.
As to today's decision not to re-hear the case en banc, I still think the Federal Circuit is wrong and failed to follow its own precedent. But that happens. Most lawyers with experience can tell you stories of cases where courts sidestep issues and more-or-less make up facts to support the decision they want to reach. But no one has to take my word for it. The briefs are public record, and anyone who's interested can read them and decide for himself -- assuming he needs a cure for insomnia.
Patent Lawsuit News Archives
- December 2012
- October 2012
- February 2009
- January 2009
- August 2008
- October 2006
- June 2006
- May 2006
- April 2006
- January 2006
- November 2005
- September 2005
- August 2005
- July 2005
- June 2005
- May 2005
- April 2005
- March 2005
- February 2005
- January 2005
- December 2004
- November 2004
- October 2004
- September 2004
- August 2004