Paying Ransom to Patent Trolls Is a Mistake

I have absolutely no problem with enforcing patent rights, and frankly I don’t think it should matter how the patents were acquired, but there is something exceptionally seedy about the use of shell companies going after competitors, or large tech companies selling to known patent trolls. They complain about the troll problem in the halls of Congress on the one hand, but use them to their advantage on the other hand.

The question should be whether there is infringement of a solid patent. If there is a solid patent and there is infringement, then there should be recourse, period. Having said that, it would be naive to pretend that there is not real evil lurking in the patent infringement realm. Stories of $500 to $1,000 offers to settle and avoid patent infringement litigation that would cost millions of dollars to defend abound. False and misleading demand letters prey on unsophisticated businesses.

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Talking Patent Litigation with Ray Niro

Ray Niro is one of the most well-known patent litigators in the country, and the attorney who was famously dubbed “a patent troll” some 14 years ago, marking the first time the term was used. See The Man They Call the Patent Troll. The label “patent troll” doesn’t really fit Niro, if you ask me, because he hs been extraordinarily successful at proving that large corporations have infringed valid patents, sometimes on fundamentally important innovations. In fact, Niro has been a champion for independent inventors and small businesses who have created some of the most revolutionary inventions. WiFi is an example.

Over the past few years, I have gotten to know Ray…he has written several op-ed articles for IPWatchdog.com…and about once a year we catch up in an ‘on the record’ interview. I spoke with Niro at length on June 25, 2014. The complete transcript of my interview with him is available at A Conversation with Patent Defense Litigator Ray Niro.

What prompted this interview was seeing an announcement that he and his firm are now offering flat fee defense representation in patent litigation matters. Ray Niro defending a patent infringement case? I have to admit I didn’t realize he did defense work, so I wanted to talk to him about this new business model. We discuss this at length during the first segment of our conversation.

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Breaking the Cycle – Stand Up and Fight Patent Trolls

The term “patent troll” conjures up all kinds of images and ideas, but there is no universally accepted definition of who is a patent troll. This has led many to recognize that, by and large, if you are being sued for patent infringement, it will likely be your belief that you are being sued by a patent troll. But obviously not everyone who sues for patent infringement is a patent troll, and neither is every plaintiff who loses a patent infringement lawsuit. There will be reasonable assertions that ultimately result in a defendant prevailing for a variety of reasons. Thus, a patent troll really should be identified by litigation tactics. A patent troll is one who is abusing the judicial process and leveraging judicial inefficiencies to obtain unwarranted settlement payments.

In determining whether one is a patent troll, I don’t think it should matter how the patents were acquired. If there is infringement of substantial patents, then there should be recourse. Having said that, it would be naive to pretend that there is not real evil lurking in the patent infringement realm. Stories of $500 to $1,000 offers to settle and avoid patent infringement litigation that would cost millions of dollars to defend abound. Some courts have openly acknowledged what feels like “extortion-like” activity. See Indicia of Extortion and Troll Turning Point? 

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Patent Trolls: In the Eye of the Beholder

The term “patent troll” conjures up all kinds of images and ideas, but what is a patent troll?  Unfortunately, there is really no universally accepted definition of what a patent troll is, which has lead myself and others to recognize that, by and large, if you are being sued for patent infringement, it is your belief that you are being sued by a patent troll. Sadly, who is and who is not a patent troll is largely in the eye of the beholder.

Still, we are not without at least some recognized industry definition. For those who can look past the surface and do not feel that patent owners are evil simply because they own patents, the term “patent troll” is usually a term that is reserved for those who acquire patents from inventors or companies, perhaps through bankruptcy, auction or otherwise, and then turn around and sue giants of industry for patent infringement.  In other words, patent trolls are those who simply acquire patents for the sole purpose of monetizing the patents through licensing regimes and ultimately litigation if a license cannot be obtained. These types of patent acquirers are typically well funded, they are not engaging in any commerce, so they do not fear a patent infringement counter-claim because they are not infringing (or, in fact, doing) anything.

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Canine Genetic Testing Patent Dispute Settled

On December 13, 2013, Genetic Veterinary Sciences, Inc. (d/b/a Paw Print Genetics) filed a declaratory judgment action against VetGen, LLC, in the United States District Court for the Eastern District of Washington (Spokane). The lawsuit sought a declaration that Paw Print Genetics was not infringing various claims of patents owned by VetGen. The complaint specifically sought a declaration of non-infringement with respect to U.S. Patent Nos. 6,040,143, 6,074,832, 6,767,707, 6,780,583, and 6,410,237. Each of these patents are titled DNA encoding canine von Willebrand factor and methods of use. In the alternative, Paw Print Genetics also sought a declaration that the claims of the patents are invalid. Both Paw Print Genetics and VetGen offer inherited disease testing to identify carriers and affected dogs for a variety of different canine genetic conditions.

In both dogs and humans, von Willebrand’s disease is a bleeding disorder of variable severity that results from a quantitative or qualitative defect in von Willebrand factor. This clotting factor has two known functions, stabilization of Factor VIII (hemophilic factor A) in the blood, and aiding the adhesion of platelets to the subendothelium, which allows them to provide hemostasis more effectively. If the factor is missing or defective, the patient, whether human or dog, may bleed severely. The disease is the most common hereditary bleeding disorder in both species, and is genetically and clinically heterogenous.

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