Abusive and Frivolous

Today's online edition of the New York Times includes an editorial entitled "Abusive and Frivolous Patent Suits."  Anybody have any doubt from the title about how this one is going to come out?   

The Times is pleased that Congress is on the case.  How anybody who has been paying attention over the last, oh, ten or so years can be sanguine about anything that comes out of Congress these days is a wonderment.

The Times identifies the problem: "businesses are increasingly using patents to sue or threaten to sue other companies to get them to pay licensing fees."  Appalling.  The gall of some companies, trying to license their patents.  For money.  

Let's concede the point: there are a lot of shaky patents floating around out there, especially business method patents.  It's largely a side effect of the USPTO's valiant attempt to deal with the State Street Bank decision back in the '90s.  The Office did the best it could, when it was suddenly and unexpectedly tasked with examining claims on business methods.  That's what the Courts are for, to sort out the good patents from the bad.  And the new post-grant and covered business method patent challenges at the USPTO might go a long way towards solving the problem, if we gave them a chance to work.  

The Times correctly notes that, often, patentholders sue companies that "use" patented technology, rather than the companies that "make" the technology.  They skip over the fact that this is specifically authorized by statute.  It's the second thing in the list, for God's sake, right after "makes." (see 35 USC 271(a)).    I'm sympathetic to small companies that are the victims of a stickup by patentholders who are looking for a quick payout.  Some of those small companies are my clients.  But the problem isn't suits against "users" of patented technology.  The problem is that patent litigation is so expensive that it's cheaper to settle than it is to fight.  That's just as true for the maker of a patented technology as it is for a user.  As long as the patentholder pitches their demand low enough, it makes no financial sense to fight, whether you have deep pockets or not.

To its credit, the Times is justifiably skeptical of the automatic "loser pays" provisions of the current House bill.  The problem with automatic "loser pays" is not that it wouldn't work - in fact, it would probably encourage more defendants to fight back against questionable patents.  No, the problem with "loser pays" is that we don't use that standard for anything else in our jurisprudence.  While I'm usually suspicious of "slippery slope" arguments, in this case, I don't want to find out what happens if Congress kicks that door in.  

How's that for a mixed metaphor?