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Posts Tagged: "rule 11"

Pre-Suit Investigation by Patentee’s Attorney Does Not Compel Arbitration Despite Website TOS

Chief Judge McMahon, in deciding the defendant’s motion to compel arbitration, ruled the arbitration clause did not prevent Jedi from accessing the federal district court and refused to compel arbitration. “The fact that Mr. Haan signed up for SCRUFF is insufficient to conclude that his actions bound Jedi to Perry’s TOS,” McMahon wrote. “For there to be an agreement to arbitrate, there must be evidence that Jedi (not Haan) knowingly agreed to Perry’s TOS and the arbitration clause contained within it. Since Jedi never signed up for SCRUF, there must be evidence that Jedi authorized Haan to assent to the clause on its behalf.”

The Impacts of the Pending Rule 11 Amendments on the Patent System

The effects of proposed Rule 11 on the patent system will be like putting an additional bullet to a dying man. As far as patent litigation is concerned, the pending rule is intended to deliver what was missed in the AIA: shifting fees from infringers to patent owners.

Proposed Amendments to Rule 11 Will Adversely Impact Patent Owners

Congressman Lamar Smith (R-TX), has sponsored a bill to amend Rule 11 — H.R. 720. The changes are made to remove the safe harbor provision and make sanctions mandatory. This bill has passed the House. A companion bill — S. 237 — has been introduced in the Senate with no action yet being taken… The proposed changes to Rule 11, if enacted, will have an impact of keeping unrepresented parties out of courts, and make the U.S. courts even more inefficient. It will have an adverse impact on patent owners in patent cases… Given the nature of patent litigation, experience teaches that it is inevitable that whenever a case is disposed of the winner will almost certainly try to shift litigation fees by any means possible, including by invoking Rule 11 sanctions. The parties with strong financial powers will have better chances to get sanction awards.

Defending Chief Judge Rader: Judges Can Make Patent Trolls Pay

Last Tuesday evening Chief Judge Rader was on a panel with U.S. District Court Judge Lucy Koh of the United States Federal District Court for the Northern District of California. Law.com reports that Jude Koh took a shot at Chief Judge Rader’s NY Times op-ed article, calling it “a little bit unfair.” Koh took issue with the articles suggestion that District Court Judges have the ability to shift fees in frivolous patent cases. According to Law.com, Judge Koh went on to explain that attorneys fees can only be awarded in “exceptional cases,” which she explained was “a really high bar.” Her final dig at the Chief was saying: “We can’t cite a New York Times editorial as authority.”

Troll Turning Point? Federal Circuit Breathes Life into Rule 11

This is very good news for defendants and for the patent system. If Rule 11 is actually enforced against those who sue without a reasonable basis the bad actors will be wiped out. It will also work to identify those who are REALLY the patent trolls compared with those who are patent owner who simply seek redress for rights that are being trampled. As long as the bad actors operate the patent system will remain in jeopardy because the popular press and critics of the patent system unjustifiably paint all non-practicing entities with the same brush. Meaningful and appropriate use of Rule 11 will deal with the bad actors, while distinguishing from those non-practicing entities that have reasonable grievances that deserve consideration rather that ridicule.

Indicia of Extortion – Federal Circuit Slams Patent Troll

It was also determined that the underlying patent litigation was brought for no other reason than to extract nuisance payments despite the fact that there was no infringement. Specifically, the district court determined that Eon-Net filed the lawsuit against Flagstar had “indicia of extortion” because it was part of Eon-Net’s history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.

Inadequate Investigation Prior to Patent Infringement Lawsuit Merits Attorneys’ Fees and Costs

Prior to filing the lawsuit the Plaintiff sought the opinion of patent counsel to evaluate the prospect of a patent infringement suit against the Defendants, and received such an opinion in the form of a letter from opinion counsel. A claims chart was attached to the opinion letter, which identified the limitations of the claims, the opinion counsel’s interpretation of each of the limitations, and an opinion as to whether each limitation is present in the accused product. Neither the letter nor the chart contained explanation of counsel’s claim construction and his application of the claim limitations to the accused product. There were no citations to the specification or prosecution history, and no analysis provided to explain why counsel construed the patent terms the way in which he did.

Patent Office Disciplinary Actions and the Lack Thereof

I thought it might be interesting to take a look at what the Office of Enrollment & Discipline has been up to since the start of 2010. To be perfectly honest, I was quite surprised by what I found. Not only is there not a single case involving Rule 11.5, but the overwhelming majority are related to reciprocal proceedings where discipline was already taken by a State and the USPTO is taking appropriate matching action with respect to the practitioner. In fact, out of the 37 disciplinary proceedings this year 24 have been reciprocal proceedings, where the USPTO seems to hand out justice largely or solely based on justice being handed out by some State Bar authority.

Rule 11 Sanctions + Exceptional Case = Bad Day for Patent Troll

In a 52 page opinion Judge Means found the case an exceptional case for purposes of awarding attorneys fees under 35 USC 285, found that Rule 11 sanctions were appropriate and fined the attorneys involved and their law firms. The complete lack of investigation by the patent owner, the continued pursuit of infringement claims even after the patent owner’s deposition testimony admitted there was no infringement and persistent frivolous defenses painted this patent troll into a corner. On top of that, Judge Means determined that the attorneys for the patent owner misrepresented facts to the Western District of Pennsylvania in order to get a transfer to the Northern District of Texas. I wonder if this decision was handed down on April Fools Day for a reason? Nevertheless, watch out patent world if Rule 11 starts to grow teeth!

ACLU Should Be Hit With Rule 11 Sanctions

In the ACLU v. Myriad case, the ACLU has alleged that the patents involved in the case cover genes found in nature. This statement is so patently (pun intended) false, that the ACLU either purposely deceived the court or is guilty of gross negligence about the facts plead in the case. As Gene points out in his post, Fired up:…