Prof. Adam Mossoff, a patent law expert from George Mason University School of Law, was the featured speaker during the New Jersey Civil Justice Institute’s July 16, 2014 teleforum on patent law. During the call, Mossoff explained how two recent cases decided by the U.S. Supreme Court should significantly reduce the number of meritless claims being made against business owners and others by so-called “patent trolls.”
To begin, Mossoff provided an overview of the patent system and the growth of patent litigation. He explained that patent litigation is by no means new, but it has recently taken on an importance not seen since the 19th Century. Today technological innovations are produced at an ever more rapid pace, while prices for the goods and services inspired by these innovations drop, allowing greater access and use. All three branches of the federal government are struggling to keep up, which has allowed bad actors to take advantage of the system.
Although reforms in Congress have stalled, earlier this year, the U.S. Supreme Court released their opinions in the cases Highmark Inc. v. Allcare Health Management System, Inc., 134 S.Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014). Together, these decisions expand the availability of attorney’s fees for prevailing parties in patent cases and increase federal district courts’ discretion in awarding fees. This means that courts will be able to punish bad actors who are abusing the patent system by requiring them to pay the court costs and attorney’s fees of the innocent party who had to defend against their sham claim.
Unfortunately, it is unlikely that all the bad guys in the patent world will immediately halt their operations in response to these decisions, but as businesses and others who are being harassed by meritless claims begin to fight back by taking the other party to court and winning, they should begin to notice. In the meantime, Mossoff suggested a few resources that parties and their attorneys can look to if they have questions about a demand letter:
- The U.S. Patent Office
- The Electronic Frontier Foundation
- Law schools that have clinics that provide free or low cost legal advice on patents
Questions from the audience and NJCJI’s Chief Counsel Alida Kass, who was moderating the call, prompted Mossoff to discuss how state level patent law reform efforts fit into this scheme. He indicated that state level reforms might have a role to play if there is no action on the federal level, but that patents will remain fundamentally a federal issue. He also expressed concern that any attempt to legislate, at no matter what level, runs the risk of impacting more than bad actors. There is no definition of “patent troll,” so even legitimate patent infringement concerns being brought by non-producing entities like universities could be inadvertently cut off if legislation is drafted too broadly. The court cases avoid this outcome.
- Highmark Inc. v. Allcare Health Management System, Inc., 134 S.Ct. 1744 (2014).
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014).
- Supreme Court Revises Fee-Shifting Rules in Patent Cases: Weeding out Bad Actors in a Level Playing Field: Adam Mossoff and Brian O’Shaughnessy on the Licensing Executives Society Website, May 6, 2014.
- Thomas Edison Was a “Patent Troll”: Adam Mossoff in Slate, May 19, 2014.