For those of you who thought patent reform is dead: it’s not.
Sure, the comprehensive piece of legislation we need to put an end to a dangerous patent troll trend has stalled, but the fight against those trolls continues.
Remember when startup FindTheBest found itself facing a patent troll threat a year ago? A “company” called Lumen View Technology claimed that its patent covered a “computer implemented method to match the preference data inputted by at least two parties who input preference data into the website.” Lumen went on to sue FindTheBest, along with about 20 other companies, claiming that they all infringed that patent. There are a couple of big problems here. First, FindTheBest’s website undisputedly does not use match preference data. Second, it turns out the patent itself was invalid.
Late on Friday, a federal judge in New York ruled that Lumen will be on the hook to pay FindTheBest’s legal fees and costs, calling this case a “prototypical” one for making the loser pay. What’s interesting is that it’s also a prototypical patent troll case. For instance:
- Lumen continually threatened FindTheBest with expensive litigation if it did not agree to pay Lumen a licensing fee.
- Lumen threatened to raise the cost of settlement the longer FindTheBest continued to defend itself.
- Lumen did not conduct even a basic pre-suit investigation before it sued FindTheBest.
- As the Court found, “Lumen’s motivation in this litigation was to extract a nuisance settlement from [FindTheBest] on the theory that [FindTheBest] would rather pay an unjustified fee than bear the costs of the threatened expensive litigation.”
- The Court also found that Lumen’s tactics were “part of a predatory strategy aimed at reaping financial advantage from the inability or unwillingness of defendants to engage in litigation against even frivolous patent lawsuits.”
And this all brings us back to patent reform. Even as recently as a few months ago, courts very rarely granted attorneys’ fees in patent cases -- in fact, it happened so infrequently that it really wasn’t even considered a possibility. But the Supreme Court recently changed that in a case called Octane Fitness v. ICON Health & Fitness. There, the Court held that a losing party in a patent case might be forced to pay the other sides fees and costs (which can easily stretch into the millions of dollars range) in certain cases where a party either brings a particularly bad case, or acts unreasonably when litigating it.
Last week’s ruling was one of the first tests of the Supreme Court’s Octane ruling. And it showed that typical troll behavior -- like Lumen’s -- is enough to trigger fee-shifting. So, finally, the trolls can be held responsible for their actions.
This outcome was a direct result of all the hard work our community did on patent reform. We raised awareness of a dangerous problem that led the Supreme Court take an unprecedented five patent cases this term, and undoubtedly to this ruling.
This country still needs comprehensive patent reform legislation, and we’re going to keep fighting for it. And that legislation will still need a stronger fee-shifting provision than currently exists to make sure that it’s applied evenly across the country. But, in the meantime, parties facing patent trolls have a powerful new tool to fight back.
