Intellectual Property

Patent Trolling in Court

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Independent Institute

William J. Watkins Jr., a research fellow at the Independent Institute, is the author of the August monograph Patent Trolls: Predatory Litigation and the Smothering of Innovation. Watkins' book argues that patent lawsuits from "nonpracticing entities"—"patent trolls" who accumulate intellectual property just to sue people using similar ideas—cost the U.S. economy billions and deter the diffusion of ideas. In September, Watkins described three important patent lawsuits:

  1. In NTP Inc. v. Research in Motion Ltd. (2005), patent troll NTP brought an infringement action to shut down the BlackBerry system and settled the case for $612.5 million. The U.S. Patent and Trademark Office ultimately reexamined NTP's patents and found they were invalid.
  2. In eBay Inc. v. MercExchange L.L.C. (2006), a unanimous Supreme Court held that a permanent injunction shouldn't be granted upon a mere finding of patent infringement. Prior to this decision, a prevailing party could easily shut down a competitor's business even if the competitor had not acted in bad faith.
  3. In VirnetX Inc. v. Apple Inc. (2012), a jury in the Eastern District of Texas (notoriously easy ground for patent trolls) ordered Apple to pay $368 million for infringement of a technology used in Apple's FaceTime function, despite strong evidence that the technology at issue was only tangentially related to the device's core functions.

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  1. Pitiful, statist argument. For the good of the collective we should step on property rights. If Mr. Watkins Jr. bought an investment house in Hawaii, would he be arguing that his personal property rights should be eliminated so society in general could vacation there at no cost? If the government wants my property, they have to give just compensation. If you want to use someone’s patent you must compensate them.

    1. They aren’t real property rights.

    2. Opposing government issued patents of monopoly is statist?

      Okaaaaay.

        1. So mental product is not protected? Songs, books, poetry, software programs and … patents should not be protected? Please let me know how songs should be protected and patents should not. I understand the desire to hammer the bad guys. My thought was the minimum amount of state to protect property rights was a libertarian position. Or is there no room for a legal system? (smaller is better of course)

  2. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for 74 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least per hour. I work through this link, go to tech tab for work detail
    ———– http://www.paygazette.com

    1. Madam! At issue is the discussion of *PATENT* trolls, not comment trolls. Please consider yourself banned indefinitely from the Reason forum.

  3. Do all these suits involve patent trolls?

  4. my friend’s sister-in-law makes $77 /hr on the laptop . She has been out of a job for 10 months but last month her pay was $19730 just working on the laptop for a few hours. go to this website…………
    ????? http://www.netjob70.com

  5. I do like the fact that the Independent Institute, our local libertarian organization, gets some notice on this site. They put on some great inexpensive events such as bringing in Ron Paul last year, and also a nice author discussion on gun control of the Third Reich. Please note, my fellow NorCal posters, you might want to get on their email list.

  6. The US court system is not a fair system. It can be, and is, used by some people as a weapon to grab stuff from others.

    The Canadian system is better. Way better. And, it still sucks, but not as bad.

    In Canada to get damages you have to prove damages. If someone sues you he has to prove he has been hurt, and the hurt has to be quantified. There are no $100 million dollar coffee spills. You get your dry-cleaning bills paid, and $1000 for pain and suffering, and 3 days lost wages if you had a job, and if you can prove you didn’t work for those 3 days because of the coffee spill. You could never get $10 million for some minor hurt because the court would say, ‘you were back to work in a week, therefore you lost a weeks wages. you get that. You needed to buy a brace for your knee, therefore you are entitled to the cost of the brace. And, you get a little something for the pain’.

    1. The downside of the Canadian court system is it takes years and years to get things settled. I’ve been involved in a nuisance suit since 2008. I won, but the enemy has appealed. He is very wealthy and sues people for fun. One of the three evil people I have met in my life. I’ve met lots of angry, messed up people, but not too many actually evil ones.

    2. Ive recently had my mind cahnged about the mcdonalds coffee spill case. did you know that old lady had to get skin grafts on 10% of her legs, and had 2nd amd 3rd degree burns? i didnt. she was in the hospital for weeks, and physical therapy for months. when she was admitted she wasnt expected to live. the punitive costs were assessed based on 3 days of coffee revenue for McDonalds, and only then were they assessed because it was proven that mcdonalds had a record of seriously injuring people with their coffee – the famous old lady was something like the 70th injury that year, yet still McD’s policy was to keep the coffee at a consistent 130-140 degrees.

      1. Caveat emptor?

  7. The simple thing is to have loser-pays. If loser can’t pay, loser’s lawyer pays.

    1. It would certainly give lawyers more incentive to make sure they have things right before initiating a lawsuit.

      1. But it also levels the playing field. As it is now, a plaintiff can get a lawyer on contingency, a defendant can’t. So even if the lawsuit is baseless, the defendant is still out a million bucks or so before the case is tossed, then appealed, then tossed again.

  8. Information is not inherently scarce.

    Scarcity is one of the necessary defining features of property rights.

    All the economic and legal conclusions of physically real property don’t apply.

  9. I Got Hooked On Having An Online Business Almost A Decade Ago When I Created An Online Course And Made My First.

    —–http://tinyurl.com/cashclick1

  10. I Got Hooked On Having An Online Business Almost A Decade Ago When I Created An Online Course And Made My First.

    —–http://tinyurl.com/cashclick1

  11. Patent Trolls and Hackers should swing from trees.

  12. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for 74 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least per hour. I work through this link, go to tech tab for work detail
    ———— http://www.paygazette.com

  13. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for 74 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least per hour. I work through this link, go to tech tab for work detail
    ————- http://www.paygazette.com

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