Z. Peter Sawicki & James L. Young 2013-12-04 11:02:03
Pet On Trials Litigation Weekend Update: What Exactly is All the Furry Fuss About? With our humble apologies to “SNL” – a legal adaptation of Season 1 Episode 19’s Weekend Update: Chevy Chase: And now with tonight’s commentary; Miss Emily Litella. Emily Litella: Thank you, Cheddar. What’s all this talk about pet on trials litigation? I think we need more cats and more dogs and less fighting by all those lawyers about them. And furthermore... Chevy Chase: Uh, excuse me, Miss Litella. It’s patent trolls litigation, not pet on trials. Emily Litella: Oh. Never mind. Patent Trolls, Patent Assertion Entities (PAEs) & Non Practicing Entities (NPEs). These are all terms that have been coined in an attempt to describe entities that assert infringement of patents that they own, but who don’t actually engage in any productive business activities themselves (other than the business of asserting patent infringement). This is perhaps an overly simplified definition, but a fair one. To understand the nature of why we have patent trolls and how they operate, it is essential that you understand the fundamental legal advantage that patent ownership provides. Owning a patent does not confer the patent owner with the right to do anything. Rather, patent ownership provides the owner of the patent with an exclusionary right – the right to exclude someone else from doing something. That “something” is the making, using, selling or importing of the patented invention. So, if you own a patent, you then have the exclusive right to control whether such activities (i.e., making, using, selling, importing) take place. Anyone engaging in such activities without the owner’s permission is infringing on the patent and may face financial liability for doing so. There is no requirement that the patent owner also be in the business of practicing the invention by engaging in such activities. The law only requires ownership of a patent for that owner to be in a position to assert infringement. Here’s a summary of recent activities aimed at curbing the economic advantage that this exclusionary right provides to NPEs: September 2011 - The America Invents Act (AIA) altered the ability of a patent owner to file one lawsuit against numerous unrelated defendants. The joinder of defendants in a patent infringement action is now permitted only where the claims against the defendants arise out of “the same transaction, occurrence, or series of transactions, or occurrences” related to the alleged infringement and requires that questions of fact common to all defendants or counterclaim defendants arise in the same action. December 2012 - The FTC and the antitrust division of the United States Department of Justice jointly sponsored a workshop to explore the impact of PAE activity on innovation and competition. February 2013 - President Obama weighed in, stating: “[Patent trolls] don’t actually produce anything themselves. They’re just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” May 2013 - The Vermont attorney general sued alleged patent troll MPHJ Technology Investments, LLC, citing consumer fraud under the Vermont Consumer Protection Act. June 2013 - President Obama issued five executive actions and seven legislative recommendations to crack down on so-called patent trolls, in order to “protect innovators from frivolous litigation and ensure the highest-quality patents in our system.” July 2013 - Nebraska Attorney General Jon Bruning demanded that Texas-based law firm Farney Daniels not engage in any patent enforcement actions in Nebraska during a probe of what he called the firm’s baseless lawsuits filed on behalf of NPEs. July 2013 - The Electronic Frontier Foundation launched www.trollingeffects.org. August 2013 - Minnesota Attorney General Lori Swanson announced that MPHJ Technology Investments, LLC, which allegedly targeted thousands of businesses for using basic office equipment to scan documents to email, will cease patent trolling in the state of Minnesota under a settlement with the company. August 2013 - A group of retail trade organizations launch an anti-NPE radio and print campaign in 17 states, asking people to call and write their congressmen to do something about bad patents. September 2013 - The FTC voted to seek public comments on a proposal to gather information from approximately 25 PAE companies. This information will purportedly be used by the FTC to examine how PAEs do business and to develop a better understanding of how they impact innovation and competition in the United States. Currently Pending Legislation – Seven bills have been introduced in Congress to deal with some aspect of the patent troll issue. Some of the issues addressed are: - curbing abusive litigation tactics used by NPEs - protecting end-users - adding transparency to get at who is really supplying NPEs with patents and funding As you can see by the list above, many players have recently jumped into the NPE patent bullying fray - and no one is saying, “Never mind.” Mr. Sawicki & Mr. Young are shareholders at Westman, Champlin & Koehler. Pete & Jim both have over 30 years of experience obtaining, licensing, evaluating and enforcing patents. Each has also developed an extensive practice regarding the clearance, registration, licensing and enforcement of trademarks. They work closely with clients to understand their values and business plans, and to provide customized and effective strategies for intellectual property asset procurement, growth, management and protection. To contact Z. Peter Sawicki call (612) 330-0581 or James L. Young at (612) 330-0495. Please email them directly at psawicki@wck. com or firstname.lastname@example.org.
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