Patent Fee Shifting Becoming More Frequent

16 Sep

In a development I think is good for patent law, patent litigation is rapidly moving toward  the English system where loser pays the fees of the winner. However, the current trend is just for patent plaintiffs to get hit for legal fees where the suit is deemed frivolous. These awards are very much on the rise lately as Courts take control over the situation. I am pleased that the Courts and not Congress has taken this to heart, as that gives Courts much more flexibility to address the problem of abusive patent litigation while hopefully not undermining legitimate patent plaintiffs from asserting valid patents against invention thieves.  This stems from the Supreme Court in the Octane Fitness decision throwing out the “exceptional case” standards previously imposed by the Federal Circuit Ct. of Appeals and in Highmark v Allcare  requiring increased deference by the Federal Circuit to District Ct fee shifting awards.  See an article by the EFF on this topic. Here are two cases of recent note:

Google gets $1.3 million from a patent troll.

FindtheBest v Lumen View Entertainment 

This is concurrent with the Supreme Court decision in Alice v CLS Bank that created a judicially legislated “abstract idea” test on patentability to make it much more difficult to obtain or enforce computer-related patents.  That is both welcome and dangerous.  Far too many patents have the invention “do this known thing, except do it with a computer”. But, now the pendulum has swung the other way. We have yet to find a recent decision where the District Court has sustained a computer software patent in the face of an abstract idea challenge. It is ever so tempting for U.S. District Court judges to get rid of a tediously complex patent infringement case by just saying “invalid as being an abstract idea” so the Judge can move on to some type of more familiar case.

The Supreme Court, seeing the glut of proposed legislation to stop “abusive patent litigation”, took the matter over, I think, in large part to get Congress out of its meddling ways. It should rightfully be the Courts and not Congress that set the rules for fee shifting.

It is a dark time for inventors.  And, a dark time for American inventors is, sadly, a dark time for America. The lure of the incentive of patents was one of the driving forces for Thomas Edison in bringing America out of the dark of the gaslight age and into the light of the electric light bulb.

In our litigious society, we might gain by switching to the English fee system where the loser pays the fees of the winner. I just hope the courts see fit to impose fee shifting in both directions and not just use it to punish patent plaintiffs while exempting patent defendants. Patent fee shifting is perhaps best used to prevent abuse of the poor by the rich, so when Google gets $1.3M in fee shifting against a small patent plaintiff that sends the wrong message, a chilling one that says every small patentee better not assert a patent unless it is a slam dunk case for infringement.



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