In the last decade, a substantial market has begun to develop for contingent fee representation in patent litigation. Wiley Rein — a traditional general practice law firm with hundreds of attorneys practicing all areas of law — represented a small company, NTP, Inc., in its patent infringement lawsuit against Research in Motion, the manufacturer of the Blackberry line of devices. The lawsuit famously settled in 2006 for $612.5 million, and the press reported Wiley Rein received over $200 million because it handled the lawsuit on a contingent fee basis. And Wiley Rein is not alone in doing so. Many patent litigators around the country have migrated toward handling patent cases on a contingent fee basis.
In the past, patent litigation was almost entirely performed on an hourly fee basis rather than on a contingent fee basis. That made sense because patent litigation appeared a poor candidate for contingent representation. Among other reasons, patent cases were expensive to litigate, took years to resolve, and outcomes on liability and damages were considered uncertain and unpredictable. In contrast, personal injury cases are relatively inexpensive to litigate, are adjudicated quicker, and often the liability of the defendant is not seriously disputed.
Many will recall that back in March 2006, the much anticipated patent settlement between Research In Motion, Ltd. (RIM) and NTP, Inc. was finalized for $612.5 million. In the five plus years since that settlement there has been a lot of talk about patent trolls, who are now more frequently referred to by the rather sanitized term “non-practicing entities.” Numerous articles have been written about the plague of patent trolls and many attempts have been undertaken to whittle away at patent rights in an attempt to make it more difficult for non-practicing entities to monetize their patent rights. Meanwhile, practically every independent inventor now believes that they have an invention that some Mega-Giant company is infringing and which entitles them to tens of millions of dollars. After all NTP was successful.
Indeed, over the years since that great NTP-RIM settlement there has been enormous focus on the $600+ million amount, and little on what lead to that settlement and the aftermath of that settlement, which has changed the patent law landscape. In some corners when listening to inventors one might almost start to think that any small company with a patent could easily stand up and take on industry giants. This, after all, was the David and Goliath — NTP v. RIM, right? Not so fast. First, the case was not as simple as it may have seemed. Second, for every David with a patent portfolio, there are numerous Goliaths defending their market shares vigorously. Third, thanks to judicial dislike of patent trolls all non-practicing entities have suffered. In fact, it is now extremely difficult to obtain an injunction as a non-practicing entity.
Last week the United States Court of Appeals for the Federal Circuit issued a precedential opinion in Centillion Data Systems, LLC v. Qwest Communications International, Inc., in which the district court was affirmed in part and reversed in part. Of particular note here is the determination of the meaning of “use” as that term is used in 35 U.S.C. 271(a). The Federal Circuit, per Judge Moore (with Judges Lourie and Linn joining) acknowledged that the Court has never directly addressed the issue of infringement for “use” of a system claim that includes elements in the possession of more than one actor, thereby making the specific issue a question of first impression.
The CAFC went on to hold that to “use” a system for purposes of infringement, a party must put the invention into service, or in other words control the system as a whole and obtain benefit from it. Furthermore, the Court held that the on-demand operation is a “use” of the system as a matter of law despite the fact that the back-end processing is physically possessed by another, who in this case was Qwest.
Article One Partners announced yesterday that patents held by NTP Incorporated are the focus of three new requests for research, which Article One Partners refers to as Patent Studies. NTP was made famous for its litigation against BlackBerry maker Research-in-Motion (RIM) that resulted in a settlement north of $600 million. New litigation by NTP has expanded the assertion of patent infringement to other top players in the mobile and smartphone industry, which is prompting Article One Partners to engage their global community of researchers by challenging them to identify evidence predating the patents in question and which can be used to invalidate one or more of the patent claims owned by NTP.
“This is a great opportunity for the public to engage directly in patent review related litigation that influences the use of email on mobile devices,” said Cheryl Milone, CEO of Article One Partners. “We welcome individuals with an interest in the public review of these NTP patents to participate, and potentially be compensated for doing so.”
Over the last several weeks “patent trolls” have been back in the news. The mother of all patent trolls, NTP, which won over $600 million from Research in Motion as the result of a successful patent infringement litigation over the popular BlackBerry phone, is back at it again. NTP is now suing Apple, Google, Microsoft and others alleging that smart phone e-mail systems infringe its patents. See, for example Bad News for Tech Heavies?and NTP sues Apple, Google, Microsoft and others.
Not long ago Attorney John M. Desmarais, who wasone of the attorneys who represented GlaxoSmithKline in their effort to stop the claims and continuations rules from becoming effective, left the practice of law. He acquired 4,500 patents and is going to throw his hat into the ring, presumably representing himself, going after those large companies that he believes are infringing his patents. See Billion Dollar Lawyer Desmarais Quits Firm to Troll for Patents.
Just this past week, Kelley Drye & Warren, the firm that represented Dr. Tafas in the claims and continuations challenge, filed an $11.4 billion lawsuit on behalf of XPRT Ventures, LLC. Many in the popular press and in the blogging community are, like lemmings heading off a cliff, referring to XPRT as a patent troll. But what evidence do that have of that? As far as I can tell little or none; mostly none. See eBay’s PayPal Sued for $11.4 Billion for Patent Infringement.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more. The treatise is continuously updated to address relevant Federal Circuit and Supreme Court decision impacting patent drafting.
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