Patent Law Practice Center

Hulk Hogan victory over Gawker shows problems with a bond requirement

A Florida jury recently awarded $115 million to former professional wrestler turned reality TV star Hulk Hogan.  As you might expect, Gawker immediately announced they would appeal. Unfortunately for Gawker, thanks to Florida law, they could be required to post a bond of up to $50 million for the privilege of appealing this decision. Posting a bond that large, Gawker argues, would imperil their ability to defend themselves and mount an appeal. Indeed, this verdict could destroy Gawker altogether.

Without getting into the substance of the Hogan vs. Gawker lawsuit, the issue of posting bonds to appeal is quite relevant in the ongoing debate over patent reform. While the philosophy behind a bond requirement makes some sense, in practice there are serious issues with prohibiting a party from appealing a decision unless they can post a ridiculously expensive bond.

The issue of bonds has been an important matter for innovators. The bond requirement has been promoted by Senator Orrin Hatch (R-UT), for example, as a way to curb abusive patent litigation by forcing those who have lost to reasonably assure the victorious party that the losing party can cover any resulting losses to the appellee before they can appeal.  VCs, universities and others object to the bond requirement and related measures that would enable defendants to get “real parties in interest” to shift fees, arguing that the real motivation is simply to make it financially impossible to ever assert a patent in the first place.

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