It has long been a patent troll strategy to carpet bomb little companies with lawsuits. The cost of defending against the suit is much larger than the money at stake, so the little companies invariably cave. A key to this strategy is the fact that there is little cost to the patent troll if they lose a case. Currently, if the patent troll does lose a case, they just walk away, they have no obligation to pay the winner’s attorneys fees, which can be substantial.
This may be about to change.
The Supreme Court announced this month that it would hear two appeals of decisions by the federal appeals court that oversees all patent cases. In each case, the company that was sued for patent infringement won on the merits but did not prevail in having its legal fees paid by the losing party.
The court will decide whether to make it much easier for victors in patent suits to force their opponents to pay their legal fees. If it does so — and patent watchers generally assume that the court would not have agreed to hear the appeals if at least some justices were not sympathetic to the companies being sued — that could make it much more expensive to file a frivolous suit, and perhaps scare patent holders away from filing meritorious suits. Losing such a suit could conceivably bankrupt a small company if it was forced to pay the other side’s legal bills, which can run into the millions of dollars.
This could have huge implications. At the very least, it would force a patent troll to think twice before filing an industry-wide suit. If they lose, they risk everything.
By Floyd Norris, of Deep Capture fame?
One could only dream!
We can only hope that Scalia, Thomas, and Roberts aren’t already having lavish dinners with a Lodsys lobbyist.
I have a pretty limited understanding of patent law, and am disgusted by the trolls as much as everyone else, but wouldn’t compelling the people filing the lawsuits to pay the fees if they lose have a silencing effect on legitimate claims against large companies? No small company will be able to sue Apple/Microsoft/Google etc. because the cost of losing the suit will cost millions of dollars (in addition to the current cost of lawsuits).
They can still appeal and not pay until after the appeals are exhausted. By then, it would be pretty obvious their claims are not legitimate.