Posts Tagged ‘patent litigation’

October 10 roundup

  • She wore a wire: defense attorney says administrative assistant to one of the three lawyers in Kentucky fen-phen scandal worked as FBI mole, circumventing attorney-client privilege [AP, Courier-Journal, Lexington Herald-Leader, ABA Journal]
  • Suing a lawyer because his deposition questions inflicted emotional distress? No way we’re going to open those floodgates, says court [NJLJ]
  • Counsel Financial Services LLC, which stakes injury lawyers pending their paydays, says it’s “the largest provider of attorney loans in the United States and the only Law Firm Financing company endorsed by the AAJ (formerly ATLA)”; its friendly public face is a retired N.Y. judge while its founder is attorney Joseph DiNardo, suspended from practice in 2000 “after pleading guilty to filing a false federal tax return” and whose own lend-to-litigants operation, Plaintiff Support Services, shares an office suite with Counsel [Buffalo News] The firm’s current listing of executives includes no mention of DiNardo, though a Jul. 19 GoogleCached version has him listed as President;
  • Patent litigation over cardiac stents criticized as “a horrendous waste of money” [N.Y. Times]
  • More on the “pro bono road to riches”, this time from a California tenant case [Greg May, Cal Blog of Appeal]
  • Not a new problem, but still one worth worrying about: what lawyers can do with charitable trusts when no one’s looking over their shoulder [N.Y. Times via ABA Journal]
  • Has it suddenly turned legal to stage massive disruptions of rush-hour traffic, or are serial-lawbreaking cyclists “Critical Mass” just considered above the law? [Kersten @ Star-Tribune]
  • “Look whose head is on a plate now”: no tears shed for fallen Lerach by attorney who fought him in the celebrated Fischel case [ChicTrib, San Diego U-T]
  • “Jena Six” mythos obscures graver injustice to black defendants, namely criminal system’s imposition of long sentences for nonviolent offenses [Stuart Taylor, Jr. @ National Journal — will rotate off site]
  • Economist David Henderson on restaurant smoking bans [Econ Journal Watch, PDF, via Sullum, Reason “Hit and Run”]
  • Technical note: we learned from reader Christian Southwick that our roundups were displaying poorly on Internet Explorer (Ted and I use other browsers) and we found a way to fix. So, IE users, please drop us a line when you encounter problems — we may not hear about them otherwise.

“Meet the original patent troll”

“Troll was a derivative of, er, me,” says Chicago patent litigator Raymond Niro, a pioneer of contingency-fee IP practice:

Niro’s former partner Gerald Hosier found fame and fortune turning Jerome Lemelson’s patents on bar code technology into a billion-dollar licensing business. But Niro taught the patent world a more enduring lesson: Lemelson isn’t unique. Like an irritating mosquito that GCs can’t squash, Hosier’s licensing approach could be applied over and over again, on different patents across different industries for huge profits. Niro has extracted royalties on everything from patents covering hemodialysis catheters to wireless technology used to locate items of interest in online maps. In the process, he’s made some serious royalties of his own: a Falcon 10 jet, six Ferraris, acres of land in Chicago, Boca Raton and Aspen, and a $250,000 gift to DePaul University endowing the Raymond P. Niro professorship in intellectual property law…. Love him or hate him, Niro’s methods have become ingrained in the patent world.

(Lisa Lerer, IP Law & Business/, Jul. 20).

Wall Street Journal on patent trolls

All sorts of interesting reporting on the news side of the subscriber-only WSJ:

In one of Douglas Fougnies’s early business ventures, he provided phony new-vehicle titles for stolen cars. His partner, Larry Day, is a onetime blackjack dealer in Las Vegas.

Together, the two men have found a more lucrative line of work: suing cellphone companies for patent infringement. Earlier this year their company — which consists of four employees and six patents — won $128 million in damages from Boston Communications Group Inc. and four other companies over alleged misuse of a 1998 patent.

Suing can be as lucrative as manufacturing as a way to profit from a patent, sometimes a lot more so:

Lured by the potential returns, hedge funds and other institutional investors now are bankrolling businesses that buy up patent portfolios. More law firms, including some branching out from product-liability and malpractice work, are taking patent cases on a contingency basis. That means the law firms are paid a percentage of any damages awarded but little or nothing if the patent-holder loses.

(William M. Bulkeley, “Aggressive Patent Litigants Pose Growing Threat to Big Business”, WSJ, Sept. 14)(sub). For more, see Sept. 1, May 2 and many other entries on our technology/intellectual property page.

In a major development, however, the federal judiciary seems to be ringing down the curtain on the most successful and controversial patent-prosecution shop of all time (Aug. 23, etc.): “After hundreds of companies paid inventor Jerome Lemelson more than $1.5 billion in licensing fees, the U.S. Court of Appeals for the Federal Circuit has concluded that his patents aren’t enforceable after all. The Federal Circuit ruled Friday that Lemelson’s 18- to 39-year delay in prosecuting patent claims relating to machine vision and bar-code technologies was unreasonable.” (Brenda Sandburg, “Lemelson Patents Ruled Unenforceable”, The Recorder, Sept. 13; Dennis Crouch, Sept. 9; IP Litigation Blog, Sept. 11; David Jacobs, MassLawBlog, Sept. 15; TechDirt, Sept. 12;; AP two-part series reprinted in Miami Herald, Aug. 20 (part I) and Aug. 21 (part II)).

BlackBerry squeezed

The Canadian maker of the wireless email device in March agreed to pay $450 million to settle the claims of NTP, a company which manufactures nothing and instead makes its way in the world by asserting rights in old patents. Not all is sweetness and light, however: “Critics of the patent system maintain that these companies — called ‘patent trolls’ by their detractors — rely on excessively broad patents, particularly for software, that should never have been granted in the first place.” For more on the controversy over patent-licensing firms, see various posts on our technology and intellectual property page. (Ian Austen and Lisa Guernsey, “A Payday for Patents ‘R’ Us”, New York Times, May 2).

Marshall, Texas: Patent Central

“In the last several years, patent lawyers have flocked to Marshall, a small northeastern Texas town of 25,000, because of its speedy court process, patent-enthusiastic judges and juries considered ideal for hearing intellectual property cases. This year alone, the court has seen 59 patent cases, more than triple the total in 2003, which saw just 14 patent suits.” Intel made a $150 million payout after adverse rulings by a Marshall judge, and Cisco is currently being sued in what plaintiff’s lawyers hope will be a big-payout case.

Among those who defend the venue against critics is Charles Baker of Houston’s Porter & Hedges, who concedes “that some defense attorneys are afraid to try cases there because of its pro-plaintiff reputation, which he disagrees with. He said that the [court’s] rocket docket also turns off some defense lawyers who feel pressured to produce evidence quickly, leaving little time for preparation.” Curiouser and curiouser: “Baker said that Marshall’s large elderly population also provides a good jury pool for intellectual property cases. ‘There are a lot of old people who don’t have a problem with sitting weeks at a time and listening to complicated issues,’ Baker said.” (Tresa Baldas, “Texas IP Rocket Docket Headed for Burnout?”, National Law Journal, Dec. 28)

For a very different view of the reasons for Marshall’s popularity, check out M. Craig Tyler (Wilson Sonsini), “Patent Pirates Search for Texas Treasure”, Texas Lawyer, Sept. 20 (PDF): “Juries in East Texas, unlike those in Houston, Dallas or Austin, are much less likely to have a member with any technical training or education, which exacerbates the problem from the defense perspective, but makes East Texas federal courts an attractive venue for would-be plaintiffs, who know that the jury will, instead, gravitate toward softer or superficial issues that are difficult to predict.” The result is to facilitate the activities of what Tyler calls “patent pirates”: enterprises that exist to file patent suits rather than to manufacture products, and which benefit from asymmetrical costs of litigation (discovery in a patent case can cost the manufacturer-defendant a million dollars or more, while the plaintiff license-holder may have few or no documents worth discovering).

According to Tyler, a “simple, nonspecific complaint”, which need not identify any infringing products sold by the defendant, “has a nuisance value of a few hundred thousand dollars the minute it is filed and served.” Tyler’s outspoken article in turn drew a response: Michael C. Smith, “”Patent Pirates” Only Exist in Neverland”, Texas Lawyer, Oct. 10 (PDF).

Submarine patents run aground

Big news from federal court in Nevada: U.S. District Judge Philip Pro ruled that the estate of deceased inventor Jerome Lemelson “can’t enforce 14 patents relating to machine vision and bar-code technologies because the prolific inventor and his estate waited too long to pursue the alleged infringers. The so-called ‘submarine patents’ are invalid, Pro ruled, and are not infringed by products made by Symbol Technologies Inc. and Cognex Corp.” (Brenda Sandburg, “Judge Torpedoes Dead Inventor’s Patent Claims”, The Recorder, Jan. 27; Cognex press release, Jan. 26). Jesse Jenner, a Fish & Neave attorney who represents Symbol and Cognex, told The Reporter that defendant companies have paid Lemelson interests an estimated $1.5 billion in the face of threatened or actual litigation. “This is probably the most substantial licensing program of any individual patentee in history,” Jenner said. “It’s now essentially terminated.” For more on the fabulous Lemelson patent litigation machine, see May 10, 2001 and links from there; Feb. 11-12, 2002.

Archived intellectual property items, pre-July 2003

Archived entries before July 2003 can also be found here.

Next: Mercedes sues Merced, Calif.” (Volvo v. Volo Car Museum), Jun. 24; “‘Illegal art’“, Feb. 13; “We own e-commerce“, Feb. 4-5. 2002:Using his own name a legal risk” (Bill Wyman), Dec. 13-15; “Macaulay on copyright law“, Oct. 14; “Skittish at Kinko’s” (won’t make copies of customer’s own published writing), Jul. 26-28; “Stolen silence?” (John Cage composition), Jul. 19-21; “Law blogs“, Jul. 3-9; “‘Top ten new copyright crimes’” (satire), Jun. 3-4; “‘A fence too far’” (Hollings bill), May 20-21; “ReplayTV copyright fight“, May 6; “A DMCA run-in” (linking to copyright violation), Apr. 16-17; “Intel Corp. versus yoga foundation“, Apr. 1-2; “Web speech roundup“, Mar. 25-26; “I’ve got a legally protected bunch of coconuts“, Mar. 13-14; “British Telecom claims to own hyperlinks“, Feb. 13-14 (& Oct. 1-2); “Overlawyered film sets“, Feb. 8-10; “‘”Let’s Roll” Trademark Battle Is On’“, Feb. 4-5 (& Feb. 11-12);  “‘Aborigines claim kangaroo copyright’“, Feb. 1-3.  2001:Bioterror unpreparedness” (antibiotic Cipro), Nov. 28; “Byways of IP law” (cat-walker patent), Nov. 7-8; “‘Mother of all copyright battles’” (Sesame Street v. Osama bin Laden?), Oct. 15; “Radio daze” (service mark), Aug. 31-Sept. 2; “‘Trolling for dollars’” (patent enforcement), Aug. 29-30; “‘Jailed under a bad law’” (DMCA, Sklyarov case), Aug. 27-28; “‘Girl from Ipanema is sued over the song she inspired’“, Aug. 15; “‘Melbourne man patents the wheel’“, Jul. 24; “Stories that got away” (DMCA), July 23; “Domain- name disputes are busting out all over“, June 29-July 1; “Barney’s bluster“, Jun. 25 (& “Welcome Slashdot readers“, July 5); “Mich. lawyer’s demand: get my case off your website” (“Love Your Neighbor”), Jun. 20 (& letter to the editor, July 6); “Intellectual- property dispute Hall of Fame” (dueling bra balls), June 6; Maori tribes v. Lego“, June 4; “‘Gone with the Wind’ parody case“, May 25-27; “Fortune on Lemelson patents“, May 10 (& see Feb. 11-12, 2002Jan. 19-21, 2001 (checkout scanners); Aug. 28-29, 1999); “Value of being able to endure parody without calling in lawyers: priceless” (MasterCard), April 25; “Patenting the Web?“, April 3-4; “Trademark litigation hall of fame” (“Love Your Neighbor” vs. “Love Thy Neighbor”), April 3-4; “Scientologists vs. Slashdot“, March 19-20; “Can you own common words?“, Mar. 7-8; “‘Top jury awards soar in 2000’” (IP leads trend), Feb. 23-25; “By reader acclaim: patented PB&J“, Jan. 30 (& letter to the editor, Feb. 12, discussion in columns, May 1); “Someone might get confused” (Pillsbury claims infringement from tech engineers’ use of “bake-off”), Jan. 22-23; “In the gall department” (Napster sues alleged trademark infringer), Jan. 11. 2000:Judge shopping, cont’d” (Rambus vs. Hyundai), Nov. 16; “CueCat’s legal claws“, Oct. 20-22; “Web-copyright update: ‘Dialectizer’ back up, ‘MS-Monopoly’ down“, Aug. 16-17; “eBay yanks e-meter auctions” (copyright claim), May 3; “Furor just one click away” (Amazon patent), March 21.  1999:More assertions of link liability” (DVD hack), Dec. 31; “For this we gave up three months of our lives?” (jury hears abstruse patent dispute), Oct. 20; “Copyright and conscience” (goodbye to “Dysfunctional Family Circus”), Oct. 7.