Here (language). “You cannot let trial lawyers decide whether there should be more baseless lawsuits. That’s the equivalent of trusting raccoons to make laws about garbage can placements. ‘They should be easy to reach and left slightly open.'” (9:40)
Sen. Harry Reid seems to have been central:
“We felt really good the last couple of days,” said the tech lobbyist. “It was a good deal—one we could live with. Then the trial lawyers and pharma went to Senator Reid late this morning and said that’s it. Enough with the children playing in the playground—go kill it.”…
Trial lawyers are heavy donors to Democratic politicians, including Reid. … The long history of the divide over other kinds of legal tort reform loomed over the bill, which was dubbed the Innovation Act in the House. The fact that it was the trial lawyers’ lobby that reportedly delivered the death blow suggests that the rift only got wider as debate dragged on.
Key Litigation Lobby allies like Sen. Dick Durbin (D-Ill.) and Sen. Sheldon Whitehouse (D-R.I.) spoke out against the legislation on the Senate floor. [Joe Mullin, ArsTechnica]
New 96-page paperback available from the Independent Institute. I wrote a blurb:
In clear and non-lawyerly language, Patent Trolls spells out why patent trollery is so loathed and so lucrative: its rapid rise (with lawsuits quintupling in the past three years), the havoc it’s wreaking from Silicon Valley down to your local restaurant and hotel; and the reasons it can be so hard to distinguish trolls from legitimate patent claimants. He lays out remedies worth considering.
— Walter K. Olson, Senior Fellow, Cato Institute; author, The Litigation Explosion and The Rule of Lawyers; editor, Overlawyered.com
Speaking of restaurants, the latest business to speak out about its bad experience with patent trolls is the venerable hamburger chain White Castle.
Mike Masnick on a jury verdict against Newegg: “Having Whit Diffie (who invented public key cryptography) and Ron Rivest (who basically made it practical in real life) present on your behalf, showing that they did everything prior to Jones’ patent, while further showing that what Newegg was doing relied on their work, not Jones’, should have ended the case. But…” [TechDirt; Joe Mullin, Ars Technica]
- “The Web’s longest nightmare ends: Eolas’ patents are dead on appeal” [Joe Mullin, Ars Technica]
- Another E.D. Tex. jury: “Lawyer Explains How To Bag A Patent Troll At Trial” [Daniel Fisher]
- Practical steps? “Trolling Effects” database modeled on “Chilling Effects”. Prior art clearinghouse [Joel Spolsky] Vermont, Nebraska AGs rattle sabers on behalf of local businesses [WaPo]
- Meanwhile, from the other side: “The Myth of the ‘Patent Troll’ Litigation Explosion” [Adam Mossoff, Truth on the Market] “A Line in the Sand on the Calls for New Patent Legislation” [Wayne Sobon, Center for the Protection of Intellectual Property; CPIP video interviews with retired Federal Circuit Chief Judge Paul Michel and retired Federal Circuit Judge Arthur Gajarsa]
- Grocers, restaurants, retailers enter fray with anti-troll ad campaign [David Balto/U.S. News, Katy Bachman/AdWeek, Food Marketing Institute]
- Manhattan Institute weighs in with “Trial Lawyers Inc.” entry [Point of Law; Jim Copland, Politico]
- When “set up as shell companies without much in assets” trolls might not be likely targets for fee recovery at lawsuit’s end; and what’s this about offshore bank accounts? [Todd Moore]
The president has some opinions on the subject [TechDirt]:
Obama: A couple years ago we began a process of patent reform. We actually passed some legislation that made progress on some of these issues. But it hasn’t captured all the problems.
The folks that you’re talking about are a classic example. They don’t actually produce anything themselves. They’re just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them. Sometimes these things are challenging. Because we also want to make sure that patents are long enough, and that people’s intellectual property is protected. We’ve got to balance that with making sure that they’re not so long that innovation is reduced.
But I do think that our efforts at patent reform only went about halfway to where we need to go. What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.
Also: RICO claim can’t shoot down Wi-Fi patent troll [Joe Mullin, Ars Technica]
A new study by James Bessen, Jennifer Ford and Michael J. Meurer in Cato’s Regulation magazine:
This article makes several findings about this litigation [patent litigation by non-practicing entities (NPEs)]. First, by observing what happens to a defendant’s stock price around the filing of a patent lawsuit, we are able to assess the effect of the lawsuit on the firm’s wealth, after taking into account general market trends and random factors affecting the individual stock. We find that NPE lawsuits are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010. During the last four years, the lost wealth has averaged over $80 billion per year. These defendants are mostly technology companies that invest heavily in R&D. To the extent that this litigation represents an unavoidable business cost to technology developers, it reduces the profits that these firms make on their technology investments. That is, these lawsuits substantially reduce their incentives to innovate.
The Federal Trade Commission “today released a 300-page report examining the effect that patent trolls – or as the FTC more tactfully dubs them, ‘patent assertion entities’ – have on competition…. The practice, said the FTC, ‘can deter innovation by raising costs and risks without making a technological contribution.’” [BLT]