Tag Archive for: patent

New Hampshire Court: First Amendment Says You Can Call A Patent Troll A Patent Troll

/in

A New Hampshire state court has dismissed a defamation suit filed by a patent owner unhappy that it had been called a “patent troll.” The court ruled [PDF] that the phrase “patent troll” and other rhetorical characterizations are not the type of factual statements that can be the basis of a defamation claim. While this is a fairly routine application of defamation law and the First Amendment, it is an important reminder that patent assertion entities – or “trolls” – are not shielded from criticism. Regardless of your view about the patent system, this is a victory for freedom of expression.

The case began back in December 2016 when patent assertion entity Automated Transactions, LLC (“ATL”) and inventor David Barcelou filed a complaint [PDF] in New Hampshire Superior Court against 13 defendants, including banking associations, banks, law firms, lawyers, and a publisher. ATL and Barcelou claimed that all of the defendants criticized ATL’s litigation in a way that was defamatory. The court summarizes describes the claims as follows:

The statements the plaintiffs allege are defamatory may be separated into two categories. The first consists of instances in which a defendant referred to a plaintiff as a “patent troll.” The second is composed of characterizations of the plaintiffs’ conduct as a “shakedown,” “extortion,” or “blackmail.”

These statements were made in a variety of contexts. For example, ATL complained that the Credit Union National Association submitted testimony to the Senate Committee on the Judiciary [PDF] that referred to ATL as a “troll” and suggested that its business “might look like extortion.” The plaintiffs also complained about an article in Crain’s New York Business that referred to Barcelou as a “patent troll.” The complaint alleges that the article included a photo of a troll that “paints Mr. Barcelou in a disparaging light, and is defamatory.”

ATL had filed over 50 lawsuits against a variety of banks and credit unions claiming that their ATM machines infringed ATL’s patents. ATL also sent many demand letters. Some in the banking industry complained that these suits and demands lacked merit. There was some support for this view. For example, in one case, the Federal Circuit ruled the several of ATL’s asserted patent claims were invalid and that the defendants did not infringe. The defendants did not infringe because the patents were all directed to ATMs connected to the Internet and it was “undisputed” that the defendants’ products “are not connected to the Internet and cannot be accessed over the Internet.”

Given the scale of ATL’s litigation, it is not surprising that it faced some criticism. Yet, the company responded to that criticism with a defamation suit. Fortunately, the court found the challenged statements to be protected opinion. Justice Brian T. Tucker explained:

[E]ach defendant used “patent troll” to characterize entities, including ATL, which engage in patent litigation tactics it viewed as abusive. And in each instance the defendant disclosed the facts that supported its description and made ATL, in the defendant’s mind, a patent troll. As such, to the extent the defendants accused the plaintiffs of being a “patent troll,“ it was an opinion and not actionable.

The court went on to explain that “patent troll” is a term without a precise meaning that “doesn‘t enable the reader or hearer to know whether the label is true or false.” The court notes that the term could encompass a broad range of activity (which some might see as beneficial, while others see it as harmful).

The court also ruled that challenged statements such as “shakedown” and comparisons to “blackmail” were non-actionable “rhetorical hyperbole.” This is consistent with a long line of cases finding such language to be protected. Indeed, this is why John Oliver can call coal magnate Robert Murray a “geriatric Dr. Evil” and tell him to “eat shit.” As the ACLU has put it, you can’t sue people for being mean to you. Strongly expressed opinions, whether you find them childish or hilariously apt (or both), are part of living in a free society.

Justice Tucker’s ruling is a comprehensive victory for the defendants and free speech. ATL and Barcelou believe they are noble actors seeking to vindicate property rights. The defendants believed that ATL’s conduct made it an abusive patent troll. The First Amendment allows both opinions to be expressed.

Reposted from EFF’s Deeplinks blog

Permalink | Comments | Email This Story

Techdirt.

Stupid Patent Of The Month: Buying A Bundle Of Diamonds

/in

This month’s Stupid Patent shows what happens when the patent system strays outside its proper boundaries. US Patent No. 8,706,513 describes a “fungible basket of investment grade gems” for use in “financial instruments.” In other words, it’s a rating and trading system that attempts to turn diamonds into a tradeable commodity like oil, gold, or corn.

Of course, creating new types of investment vehicles isn’t really an invention. And patents on newfangled financial techniques like this were generally barred following Bilski v. Kappos, a 2008 Supreme Court case that prevents the patenting of purely financial instruments. Since then, the law has become even less favorable to abstract business method patents like this one. In our view, the ‘513 patent would not survive a challenge under Bilski or the Supreme Court’s 2014 decision in Alice v. CLS Bank.

Despite its clear problems, the ‘513 patent is being asserted in court—and one of the people best placed to testify against the patent may not be allowed to.

The public’s right to challenge a patent in court is a critical part of the US patent system, that has always balanced the exclusive power of a patent. It’s especially important since patents are often granted by overworked examiners who get an average of 18 hours to review applications. 

But there are two types of persons that, increasingly, aren’t allowed to challenge problematic patents: inventors of patents, and even partial owners of patents. Under a doctrine known as “assignor estoppel,” the Federal Circuit has barred inventors from challenging patents that they acquired for a former employer. Assignor estoppel was originally meant to cover a narrow set of circumstances—inventors who engaged in fraud or bad dealing, for instance—but the nation’s top patent court now routinely applies it to prevent inventors from challenging patents.

Patent scholar Mark Lemley flagged this problem in a 2016 paper, noting assignor estoppel could be used to control the free movement of employees or quash a legitimate competitor. “Inventors as a class are put under burdens that we apply to no other employee,” he wrote. “If they start a company, or even go to work for an existing company in the same field, they will not be able to defend a patent suit from their old employer.”

In this case, the Federal Circuit’s expansive view of assignor estoppel may prevent a person who owned just a fraction of a patent from fighting back when that patent gets used in an attempt to quash a competing business.

Despite the fact that this gemological trading system should never have been granted a patent, so far, it’s being successfully used by its owner to beat up on a competitor—and the competitor could be barred from even challenging the patent by assignor estoppel.

Competing Diamond Companies

GemShares was created in 2008 to market “diamond investment products.” The original partners were joined in business by a man named Arthur Lipton, who bought 20% of GemShares in 2013. He struck a deal not to compete with GemShares.

GemShares says [PDF] Lipton broke that deal in 2014, when he started working on his own project, a “secure diamond smart card,” and filed for patents related to it. But in addition to breach of contract, GemShares sued for patent infringement. They said Lipton’s new business violated the ‘513 patent.

The litigation also involves breach of contract claims, and allegations of fraud from Lipton’s former partner. Without getting into the weeds on all that, the defendant in this case may not even be allowed to argue that the “gem financial product” patent is invalid. Earlier this month, the judge overseeing the case issued an order [PDF] noting that “the Federal Circuit has upheld the doctrine of assignor estoppel, which precludes an inventor-assignor of a patent sued for infringement from arguing the patent’s invalidity.”

The Federal Circuit has made assignor estoppel so powerful, in fact, that Lipton’s 20% ownership contract with GemShares may be enough to stop him and his lawyers from mounting an invalidity defense.

It’s bad policy to stop the public from challenging bad patents, and assignor estoppel should only be used in narrow cases, like outright fraud. As it’s been applied by the Federal Circuit, it’s destined to be used in exactly the way that Lemley warned it would—as an anticompetitive cudgel.

We agree with the brief signed by Lemley and more than two dozen other law professors [PDF] in EVE-USA, Inc. v. Mentor Graphics Corp., arguing that the Supreme Court should take up this issue and keep assignor estoppel within the narrow limits it originally intended.

Reposted from EFF’s Stupid Patent of the Month series.

Permalink | Comments | Email This Story

Techdirt.

TPP Is Back, Minus Copyright Provisions And Pharma Patent Extensions, In A Clear Snub To Trump And The US

/in

As Techdirt noted back in November, the Trans Pacific Partnership (TPP) agreement was not killed by Donald Trump’s decision to pull the US out of the deal. Instead, something rather interesting happened: one of the TPP’s worst chapters, dealing with copyright, was “suspended” at the insistence of the Canadian government, which suddenly took on a leading role. At the time, it wasn’t clear whether this was merely a temporary ploy, or was permanent. With news that the clumsily-named “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP) has been “concluded”, it now seems that the exclusion of both copyright and pharma patent extensions is confirmed. As Michael Geist writes:

the IP chapter largely reflected U.S. demands and with its exit from the TPP, an overhaul that more closely aligns the agreement to international standards was needed. Canada succeeded on that front with an agreement to suspend most of the controversial IP provisions including those involving copyright term, patent extension, biologics protection, and digital lock rules.

That’s the good news. But there’s still plenty of bad stuff in the CPTPP, a sample of which is listed here by The Atlantic:

A controversial arrangement whereby companies can sue countries over their domestic laws, known as the investor-state dispute settlement [ISDS — corporate sovereignty] system, remains in a reduced fashion. Labor and environmental protections are largely unchanged [and unsatisfactory]. The EFF’s [Jeremy] Malcolm pointed to e-commerce provisions that provide only weak privacy protections, among other issues, as still being problematic. But overall, the new deal is so similar to the original that Canadian labor unions are furious that their government is still advancing it, just as labor groups in the U.S. objected under Obama.

That anger means that even in the absence of the copyright and pharma patent extensions, there is still likely to be some resistance to the new deal, and not just in Canada. For example, economists estimate that the CPTPP will boost Australia’s economy by only 0.04% per year — a negligible amount that will be swamped by fluctuations in other factors. Some Australian businesses warn that the continuing existence of bilateral trade deals with eight of the CPTPP countries will lead to a complex “noodle bowl” of rules and regulations that could make it harder, not easier, to conduct business with them. In New Zealand, a long-standing critic of TPP, Professor Jane Kelsey, is particularly worried about a chapter on electronic commerce. And in Malaysia, a consumer group has urged the government there not to sign the deal, which it said would be “even worse” than TPP for the country.

Although we still don’t have the final details of the deal, and the lingering presence of corporate sovereignty is regrettable, the CPTPP signals a hopeful shift away from the usual intellectual monopoly maximalism. The omission of copyright and patents from the new deal is a significant defeat for the US, which has been the main driving force behind their routine inclusion. And the fact that the CPTPP is going ahead at all without the US is a clear snub to Trump and his rejection of such multilateral trade negotiations.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Permalink | Comments | Email This Story

Techdirt.

Cisco dents Arista again with patent infringement ruling

/in

A US trade judge ruled today that Arista Networks infringed on two Cisco switch patents – the second important victory the networking giant has won against Arista in their ongoing legal confrontation since it began in 2014.

U.S. International Trade Commission Judge MaryJoan McNamara issued the so-called “initial determination” on the case which now must be reviewed by the ITC. In the end should the ITC find against Arista its switches could once again be banned from import into the US. The ITC you may recall ruled against Arista in another part of this case and between June and August the company could not import those products. In November Arista announced that US Customs has given it permission to resume importing its networking gear in the United States.

To read this article in full or to leave a comment, please click here

Network World Security