Patent Law Practice Center

Litigation Abuse: The “Problem” of Patent Trolls

The term “patent troll” conjures up all kinds of images and ideas, but what is a patent troll?  The answer is that there is really no universally accepted definition of what a patent troll is.  In the most common sense of the term, it is usually 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 this situation, patent trolls are typically extremely 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 doing, anything.

Over time, however, as the debate has matured and many with a patent reform agenda seek to weaken patent rights in hopes of solving their short-term litigation concerns, the term patent troll has morphed to mean any non-practicing entity. Such a definition of patent troll is overly broad, though, because it collects many entities that are simply not doing anything other than pursuing the American dream. These individuals and entities include universities, independent inventors, research & development companies, and federal laboratories. Indeed, such a list of innovators has typically been one that has been celebrated, not reviled.

But there are, of course, bad actors.

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CAFC Reverses Summary Judgment on Doctrine of Equivalents

In The Charles Machine Works, Inc. v. Vermeer Manufacturing Co. (Fed. Cir., July 26, 2013), the patent in question was U.S. Patent 5,490,569 (the “’569 patent”), which generally relates to a two-pipe drill for boring underground holes in the horizontal direction. An inner pipe rotates the drill bit. An outer pipe, which includes a body and casing, is used for steering. The ’569 patent also discusses a structure called a “deflection shoe” as a steering mechanism. The deflection shoe is included on one side of the casing to create an asymmetry about the casing’s centerline axis. If the casing does not rotate, the deflection shoe causes the drill to deflect away from a straight path. When the casing rotates, however, the drill follows a straight horizontal path.

The Charles Machine Works (“CMW”) sued Vermeer for infringement of the ’569 patent. Asserted apparatus claims 1, 4–8, 10, 12, 18, 20–25, and 27 recite “a deflection shoe mounted on a first side of” either “the body” or “the casing.” Asserted method claims 30–31 recite “the casing having a deflection shoe thereon.”

CMW alleged infringement by two types of Vermeer drills: non-commercial prototypes and commercial products. Both types of drills include a structure called a bent sub, which CMW contends meets the “deflection shoe” and “mounted on” limitations. The prototypes include an additional structure called a wear pad. Vermeer moved for summary judgment of noninfringement, literal or under the doctrine of equivalents, of the asserted claims. The district court granted Vermeer’s motion as to all accused products. CMW appealed to the United States Court of Appeals for the Federal Circuit.

Patent Litigation Settlement Suggests Both Parties Just Gave Up

On July 18, 2013, Complete Genomics, Inc., which is a wholly-owned subsidiary of BGI-Shenzhen (“BGI”), announced that it entered into a settlement agreement with Illumina, Inc. under which Illumina will dismiss with prejudice both lawsuits it had brought against Complete:  Illumina, Inc. and Solexa, Inc. v. Complete Genomics, Inc., Case No. 10-cv-05542 EDL (N.D. Cal.); and Illumina, Inc. and Illumina Cambridge Ltd. v. Complete Genomics, Inc., Case No. 12-cv-01465 BEN BGS (S.D. Cal).  The agreement is reciprocal, so Complete will likewise dismiss with prejudice all counterclaims against Illumina.

No payment is being made by either party to the other, which is not particularly unusual. What makes this story interesting is that the parties also announced that no licenses are being granted by either party to the other. Typically, in patent litigation, you will see either a payment going in one direction or some kind of cross-license.  Thus, it would seem that the parties simply decided that they would each be better off simply giving up on the case and moving in separate directions.

It is a bit unusual to see both parties walk away empty-handed, but with the cost of patent litigation and the reality that patent litigation stalls forward movement with respect to research and development, perhaps it is not shocking.

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A Conversation about Software Patents

On March 25, 2013, I spoke on the record with Eric Gould Bear (left) about software innovations, software patents and the trials and tribulations of litigating software patents long after they were first written.

Bear is an inventor on over 100 patents and patent applications in the software space. He has spent over 25 years working with numerous Fortune 500 corporations with respect to assisting them in the creation of new user experiences. He is also a founder of the design studio MONKEYmedia, which recently launched a patent infringement lawsuit against Apple, and which also has a patent infringement lawsuit pending against Sony, Disney and others. Bear is also a testifying software expert witness.

During our one-hour discussion, which published in three parts on IPWatchdog.com, we discussed a number of interesting topics. What appears below are some of the highlights of our discussion.

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Covidien Wins $176 Million Patent Verdict

On March 28, 2013, Covidien (NYSE: COV), a leading global provider of healthcare products, won a patent infringement lawsuit against Ethicon Endo-Surgery, Inc., a Johnson & Johnson company, relating to Ethicon’s Harmonic line of ultrasonic surgical products.

Before proceeding, to clear up any possible confusion for those who look to the Memorandum of Decision issued by the United States Federal District Court for the District of Connecticut, you will not see Covidien’s name on the case. Tyco Healthcare Group LP and United States Surgical Corporation were the named plaintiffs. US Surgical was acquired by TYCO in 1998, and subsequently Tyco spun off Tyco Healthcare in 2007. Tyco Healthcare was later renamed Covidien.

Representing Covidien in this victory was DLA Piper, with New York partners Drew Wintringham and Frank Ryan leading a litigation team further comprised of  partner Mark Rueh and associates Erica Pascal, Matt Ganas, Airina Rodrigues and Joanna Sykes-Saavedra.