

Federal Circuit Slams Patent Troll  - grellas
http://ipwatchdog.com/2011/08/04/indicia-of-extortion-federal-circuit-slams-patent-troll/id=18568/

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bfe
Although Gene seems to discount the inhibitory effect of a patent troll
getting fined over $600,000, I think this case will focus the minds of
overzealous patent owners, as well as the patent attorneys involved, for whom
a Rule 11 sanction carries a burden beyond the dollar amount of the
plaintiff's fines.

And while a broad variety of litigious patent holders sometimes get unfairly
lumped together as trolls, this outfit clearly seems to deserve the epithet,
and in this case the system, in its current form, ultimately seems to have
worked.

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felipemnoa
>>Defendants also need to unite and bring a RICO action actions these bad
acting non-practicing entities. Extortion can be captured by RICO and that is
exactly what these bad actors engage in. It would do the federal government
well to investigate as well. The Federal Trade Commission should go after
these nefarious actors for engaging in unfair business practices.

This is the best part of the article. Now, how do we get the Federal
government to prosecute them for extortion?

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wtallis
Fortunately, RICO also provides for civil action. If a good case can be put
together, RICO's provisions are strong enough that even a civil suit should be
able to bankrupt a patent troll and their backers.

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rlpb
"As a result of the misconduct found, Judge Martinez of the United States
Federal District Court for the Western District of Washington slapped the
patentee-plaintiff with Rule 11 sanctions totaling $141,984.70 for failure to
perform a reasonable pre-filing investigation. The district court also awarded
the defendant $489,150.48 in attorneys fees and costs pursuant to 35 U.S.C.
285."

So the sanctions were only about a quarter of the half a million dollars in
legal costs the defendant had to put up to fight the case? I understand that
the plaintiff had to pay the costs in the end, but this is hardly going to
deter trolls.

It seems to me that with sanctions such a small proportion of legal costs,
trolls can just carry on doing what they are doing and the defendant's fear of
being sunk in legal costs will far outweigh the troll's fear of the sanctions
for the troll (which after all are probably smaller than his legal bill!)

In what way is this a deterrent?

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ScottWhigham
I'm with on the idea that, on the surface, it feels lopsided - $142,000 in
sanctions vs. $489,000 in defendant's legal fees - but AFAIK sanctions are not
related to defendant's legal costs. You're trying to tie two unrelated
concepts and getting twisted that they aren't more inline with each other.
Sanctions, in most cases, are regulated - there's a minimum and maximum -
whereas defendant's legal fees are not. The judge hopefully gave the maximum
sanctions available.

~~~
rlpb
I understand that sanctions are not related to defendant's legal costs.

I think they should be, because I think it's a joke that sanctions can be far
less than what the defendant had to risk to fight the behaviour that caused
the sanctions.

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impendia
Newbie legal question: Can the companies who have already settled with Eon-Net
now simply stiff them on the license fees?

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Pointsly
Yes. The old contracts are similar and kinda like the 'fruit of the poisonous
tree' doctrine.

Though.

I doubt Eon-Net is going to 'take them to court' and face a similar result
(that is if the companies can afford the law suit and/or if Eon-Net can NOW
afford the law suit).

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awaz
Should we consider this a ray of hope or an exception? Also, as per the
article, the case concluded last week. I am surprised that other tech media
did not cover this given the buzz around patent trolls these days.

~~~
JamesBlair
Seems to be neither:

 _Indeed, the written description of the patents in question expressly refuted
the claim construction of the patentee-plaintiff. As a result, the district
court properly found that EonNet pursued objectively baseless infringement
claims._

If this set a precedent it wouldn't be against vague patents, or against suing
implementations of the obvious, etc.

~~~
chc
It sounds potentially about as true of Lodsys' claims as this patent troll's.

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talmand
I don't know how it would be handled but something has to be done about such
blatant abuse of the legal system. If any company files suit but offers to
settle for lower than the cost of defending and states it that way in the
offer, then I fail to see how that is not extortion. It would seem that you
should be able to go before a judge and show the settlement offer to have it
ruled so. To me, with this case the defendant's legal fees shouldn't have been
as high since the judge should have tossed it almost immediately.

This type of thing is going on across the country and not just in patent
infringement cases. You have people all over the place clogging up the courts
with suits that are essentially extortion using the law in unintended ways.
This has got to stop before we've all lost total confidence in our legal
system.

Of course, it's almost a joke now as it is...

