12.29.16

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2016 Was a Terrible Year for Patent Trolls and 2017 Will Probably be a Lot Worse for Them

Posted in America, Patents at 6:54 pm by Dr. Roy Schestowitz

New year

Summary: The US Supreme Court (SCOTUS) is planning to weigh in on a case which will quite likely drive patent trolls out of the Eastern District of Texas, where all the courts that are notoriously friendly towards them reside

MANY patents granted by the USPTO have become the basis for ruinous lawsuits filed by patent trolls, which may soon be dealt an unprecedented and much-needed blow.

Patent trolls are not just a minor nuisance or some small random parasitic companies without products; some of them are gigantic and many are covers (or fronts) for large corporation seeking to shield themselves from counterclaims. Consider this new story about “Cayman Global”, yet another ‘IP’ proxy, this time for Faraday Future. “The Verge reports that Faraday Future does not own its intellectual property, and that it is instead owned by a separate entity called FF Cayman Global,” Business Insider wrote the other day. Microsoft too has created its own patent assertion entity — the one it uses to taunt Linux and Android all the time.

Florian Müller and LWN have both highlighted this good article published on December 27th by Daniel Nazer of the EFF. To quote: “Patent trolls were down but certainly not out in 2016. After a massive burst of litigation at the end of last year, we saw a noticeable drop in patent troll lawsuits at the start of this one. But trolls began returning to court as the year continued and 2016 will likely end with a relatively small overall decline. Consistent with recent trends, troll cases clustered in the Eastern District of Texas. Approximately one in three patent suits were filed in that remote, troll-friendly district, and these suits were almost all filed by companies with no business other than suing for patent infringement.”

“Microsoft too has created its own patent assertion entity — the one it uses to taunt Linux and Android all the time.”A lot of patent trolls lose their battles as software patents reach the wastebasket or never get used at all (due to low certainty of settlement/prosecution).

In 2017 we expect the case that will likely destroy trolls to be decided on by SCOTUS. This new article by Sasha Moss, Technology Policy Fellow at the R Street Institute, says that the “U.S. Supreme Court announced earlier this month it will hear the appeal of a patent infringement case brought by Kraft Foods Group Brands LLC against zero-calorie sweetener manufacturer TC Heartland LCC.”

Even lawyers’ sites wrote about this, e.g. “Will forum shopping days, like holiday shopping days, soon come to an end?”

“Only the more ‘extremist’ sites of (and for) patent lawyers, as we noted here before, prefer to say that nothing will change.”Professor Michael Risch wrote about this case that Patently-O, where he wrote/published his piece, predicts is going to kill patent trolls’ business model. To quote Risch, “I should note that the outset that I favor TC Heartland’s position from a policy point of view. I’ve long said in a variety of venues (including comment threads on this very blog) that there are significant problems with any system in which so much rides on where the case is filed. And I think that’s true whether you think they are doing a great or terrible job in the Eastern District of Texas.”

Only the more ‘extremist’ sites of (and for) patent lawyers, as we noted here before, prefer to say that nothing will change. We shall see next year, but the one newly-introduced factor will be the Republican government and perhaps several new appointments of Justices.

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