It means that at least the first levels of "Have a corporate shell that dissolves upon an adverse finding" tricks will be defused.
Just because you lose a suit doesn't mean the suit was unjustified. You know all those plaintiffs suing the banks over mortgage related issues? Most of those plaintiffs are going to lose, because they can't back up their claims with sufficient proof or the banks skirted but stayed on the right side of the law, at least technically. Should those plaintiffs pay the banks punitive penalties for bringing suits they lost? Should they even have to pay the banks' legal fees?
It's easy to throw around ideas like loser-pays when you have a clearly established preconception of who the "good guys" and who the "bad guys" are. But that doesn't make for workable policy. Bankers/private equity folks, etc, really think they're the good guys and the people suing them are just bitter because they got the short end of a deal they knowingly got into. The folks that work in petro-chem really think they're the good guys, and folks suing them for environmental harms are just hypocrites who want all the advantages of modern petrochemcial processes (pretty much every gadget you own is the result of a horribly polluting process) but aren't willing to put up with the inevitable consequences. I'm sure they'd love loser pays too, for situations where some investor ends up not being able to prove outright fraud, or where some community can't muster the evidence to prove that a chemical plant caused kids to get cancer.
Loser-pays is just a band-aid on what is a more fundamental problem with the patent system: the law has evolved to make patents a strong right with very ill-defined boundaries. That makes litigation protracted and expensive because you end up getting into the weeds of technical issues and whether this kind of thing is like this other kind of thhing that the court system isn't really competent to deal with. No amount of tweeking at the edges is going to fix that. The solution is to make patent rights narrower and more well-deliniated. Shift the focus to questions like whether the defendant unfairly competed with plaintiff by copying the plaintiff's IP instead of innovating themselves. These are things the court system is competent to handle (and has been for hundreds of years). When it can be easily seen whether clearly-defined legal rights have been violated, frivolous litigation naturally diminishes because the cost to prove allegations wrong goes way down, which makes the incentive to just settle also
Honest question: can you point to some examples where such professional discipline lead to a meaningful impact on the plaintiff's firm (it would seem that attorneys are not so scarce that censuring one or two at a large firm would do much damage), or another kind of meaningful reform?
I'm speaking from a position of relative ignorance here, but the only time I can remember hearing of an attorney being professionally punished in a career-impacting way was Mike Nifong. If it takes that level of egregiousness to get the legal profession's attention (and maybe it doesn't, hopefully you have some counterexamples), we're in trouble.
I don't claim it to be anything other than theater, but I think a lot of people clamoring for these kinds of measures resonate with this quote from The Wire (NSFW language):
Large firms are repeat players with the court system. A sanction that's even nothing more than a note in a file is a scary thought when that firm will have to go in front of that same court in other cases day after day. For a large firm, it's not worth it to toe that line. That said, it still happens, e.g. http://abovethelaw.com/2012/08/benchslap-of-the-day-judge-co....
The situation is somewhat different for other lawyers. A single sanaction for a frivolous suit is unlikely to get you disbarred. That said, the threat of disbarment isn't illusory: http://www.calbar.ca.gov/LinkClick.aspx?fileticket=DPQeNI9Fz.... The California Bar disbarred or suspended 394 lawyers in 2011.
Note that sanctions can include financial penalties for both the lawyer and the client. To pick an example out of a hat: http://valawyersweekly.com/2012/12/21/baseless-suit-nets-san.... If a patent troll is bringing clearly frivolous suits, nothing stops a court from recognizing a pattern and imposing significant monetary sanctions. The problem is, the bar for "frivolous suit" is pretty high in order to avoid deterrming meritorious litigation.
PS: Also of note 2011 was an unusual peak for example only 17 people where disbarred in 2008.
Comparing to other professions, the threat of licensure revocation is less in law than in say medicine, but not by so much where I'd argue the threat is "very weak."
In 2011, 365 doctors had their licenses revoked or restricted in California, out of 131,696 (0.28%). That's about twice as high as for lawyers (0.16%). See: www.fsmb.org/pdf/2011-summary-of-board-actions.pdf
Also, note that courts typically impose monetary penalties on lawyers and clients to sanction conduct that doesn't warrant suspension or revocation of license. Such monetary penalties are not common for doctors, but are also a source of deterrence.
You're going to have a hard time finding a lawyer to bring a claim that someone breached a contract with you if you don't have any evidence there was ever a contract. The "professional death penalty" of disbarment is too scary to do shit like that. But with patents, you can credibly, at least under the law, claim all sorts of things in good faith.
Is there some hack around the East Texas problem? If you don't sell your product in that area, would it be possible to avoid being brought to that district's court? If so, I could imagine companies could simply have a notice on their checkout page: "Sorry, you live in East Texas, we don't sell there". I'm sure some companies would not want to leave money on the table like that, but for many things I do, I'd be happy to take such a position.
If blocking IPs that originate from that region would offer additional protection from patent trolls, I'd do it in a heart beat. I know that the real answer is "talk to a lawyer" which I will do, but it'd be interesting to see someone from the Hacker News community comment on the viability of this strategy.
Maybe we just need a bunch of people to move there for a few years and upset the status quo?
"Everyone knows" big business (i.e., folks with an interest in patent law) "controls" the government, right? Or at least has disproportionate ability to persuade? (I'm not trying to make a political statement here - quite the opposite, I'm trying to phrase this in a way everyone can agree on.)
Anyhoo, suffice it to say whether Congressman X votes yea or nay here depends more on the phone call he's about to get from the CEO of General Electric than how many copies of EFF's form letter land in his inbox. So...what are we doing here? By 'we' I don't mean you, dear reader. It wouldn't be the first time netizens took to a rallying cry just for the sake of rallying and crying. What is EFF doing? They're smart guys. They know their way up and down K Street. They know what gets a bill passed and what doesn't, and they know 10,000 form emails falls under the latter category. What's their game?
Fundraiser. Note the big, blue "DONATE NOW." Oh - and by 'fundraiser' I mean income, livelihood, payroll checks, bacon-to-be-brought-home. Their business is your excitability, and cousin, business is a-boomin'.
If you are judging on something you are to consider both options. And it is not about software/hardware producers and p-trolls. The law is to protect authors. In some way the law is to embrace innovation and progress (despite it is not the main value).
Producers want do use the law to create monopoly. To eliminate minor innovators and use they innovations for free. What about scientists? What about research groups? Does they innovations "practical"? Mostly not, but still these people might understand the direction of technology and take actions that are two steps ahead of producers. Our society is called "postindustrial" not because the great development of IT but of lack of development "industrial" things. Progress became extensive and not moving forward. Science became servant of production, faith by itself. Science loosing criticism -- the approach that leads to better models of the world.
Author of innovation is nobody, a pawn in the hands of mighty producers, and we, the consumers is to worship great producers, ought to sacrifice all this minor and unworthy author. Who even dares to remember the authors?
Also, consider rights of "real" innovation authors -- in-company engineers. Are they any protected? Do they really have author right's at some moment? They are the authors! Many of them are quite unique in special areas. Did they have a voice?
SHIELD act protect producers to create monopolies. It is uncertain that the act will decrease possibilities of pure trolls.
The origin of author's rights is not about the areas where it is applied now, current approach is outdated. But even complete rejection of author's rights is better than the SHIELD law.
Even without this mechanism, I really doubt a small entity could sue A or G on any IP matter and actually come out ahead in a financial sense. Our IP protections were not constructed with the interests of individuals and small firms in mind.
(edit: and of course dangoldin is correct about the NPE thing, d'oh!)
How does a small company or individual who doesn't have the millions to defend herself win in the first place?
The way I understand it right now, this basically only removes the risk from medium sized companies that have the financial backing but only settle to save littigation money.
1) Does this make things better?
2) Does this actively prevent future improvements?
If the answers are yes and no, it's a good thing and should go in.
A frivolous lawsuit is a frivolous lawsuit, no matter who brings it. The real problem is that patents give far too much power (injunctions of products heavily invested in), defending costs far too much money, and it is far too easy to get patents on relatively simple things.
This has to be balanced by either:
* Making far fewer inventions patentable (only inventions that take a real investment of time and money should be patentable)
* Drastically reducing the power of patents (no injunctions unless in rare cases, much cheaper process for patent infringement fights)