‘Patent trolls” targeted by recent changes to US software patent eligibility

The US position on software patents has gone through a significant change in the last five or so years, from being broadly accepting to becoming a difficult jurisdiction. 


What precipitated this?  If the concurring opinion of Circuit Judge Mayer in ULTRAMERICIAL, INC. v HUKU, LLC 2010-1544 (Fe. Cir. 2014) is to given credit, then the blame rests squarely with vexatious litigants, particularly “patent trolls”.


Many believe however, that the legal framework (the Alice 2-step abstract idea test) that has been developed is a blunt tool that throws the baby out with the bathwater. It is a shame, and it would be desirable if more targeted approach could be found. 


Here is the relevant extract:


Resolving subject matter eligibility at the outset provides a bulwark against vexatious infringement suits. The scourge of meritless infringement claims has continued unabated for decades due, in no small measure, to the ease of asserting such claims and the enormous sums required to defend against them. Those who own vague and overbroad business method patents will often file “nearly identical patent infringement complaints against a plethora of diverse defendants,” and then “demand . . . a quick settlement at a price far lower than the cost to defend the litigation.” Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1326 (Fed. Cir. 2011). In many such cases, the patentee will “place[] little at risk when filing suit,” whereas the accused infringer will be forced to spend huge sums to comply with broad discovery requests. Id. at 1327 (noting that accused infringers are often required “to produce millions of pages of documents, collected from central repositories and numerous document custodians”). Given the staggering costs associated with discovery, “Markman” hearings, and trial, it is hardly surprising that accused infringers feel compelled to settle early in the process. See id. (noting that the accused infringer had “expended over $600,000 in attorney fees and costs to litigate [the] case through claim construction”); see also Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 101 n.24 (1993), (explaining that “prospective defendants will often decide that paying royalties under a license or other settlement is preferable to the costly burden of challenging [a] patent” (citations and internal quotation marks omitted)). Addressing section 101 at the threshold will thwart attempts—some of which bear the “‘indicia of extortion,’” Eon-Net, 653 F.3d at 1326—to extract “nuisance value” settlements from accused infringers. Id. at 1327; see also id. at 1328 (explaining that the asserted patents “protected only settlement receipts, not . . . products”). 

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