Wednesday, February 18, 2015

Chambers/Ullman opinion piece in WSJ praises Goodlatte bill on patent reform

An opinion piece by Chambers and Ullman in the Wall Street Journal is titled

Stopping the Economy-Sapping Patent Trolls
Entities that don’t make products or sell services file more than 60% of U.S. patent lawsuits.

But whether the patent assignee does, or does not, make a product according to the patent claims
is irrelevant to the question of patent reform. More pertinent points are whether the patent claims
truly represent patentable subject matter, and whether the accused infringer likely does infringe
valid patent claims.

Chambers and Ullman note of the Goodlatte proposal:

Mr. Goodlatte’s bill includes a number of important reforms. For example, it would require disclosure of the actual basis for claims at an earlier point in the legal process; this will provide clarity, sharply reducing defense costs. It would also require transparency as to who is filing the suit, so that multiple suits from the same owner can be detected. It also would strengthen the right of winning defendants in bad cases to recover their legal costs.

These reforms would help level the playing field to ensure that suits that actually have merit go forward and be resolved through the courts, while those that are frivolous and abusive are deterred, denied and diminished.

As to the merits of the Goodlatte innovation act, see Richard Epstein's comments in the IPBiz post

Forbes piece by Richard Epstein trashes Goodlatte's Innovation Act concerning patent reform

One of Epstein's points is that pleading a complaint, pursuant to the Federal Rules of Civil Procedure is "one size fits all." The Goodlatte bill departs from this. Epstein also gets into fee shifting. Epstein's positions are incompatible with those of Chambers/Ullman.

PatentlyO has a post on the Chambers/Ullman piece titled

Who is to Blame for High Litigation Costs: Plaintiffs for filing the lawsuits or Defendants for refusing to deal and instead fighting?

including the text

The core of their argument is here:

A 2012 study by Boston University researchers estimated that companies spent upward of $29 billion a year defending patent lawsuits, and the problem has not let up. According to RPX Corp., more than 3,600 companies and named defendants were sued by so-called patent-assertion entities in 2014, triple the number in 2006. Patent-assertion entities—aka nonpracticing entities, or as some would call them, trolls—that own patents but do not make products or sell services based on them file more than 60% of patent litigation in the U.S.

A civil lawsuit generally comes about based upon a failure of the parties to negotiate a just solution. Of course, for any given lawsuit, we don’t know beforehand whether it is the plaintiff or the defendant who is being more unreasonable.

and making the point that "when" negotiations over licensing break down, it is not so clear "who" is responsible.

The above-noted text of the Chambers/Ullman piece is more about ambiguity over claim scope, meaning that there may be an issue with whether ANY license is needed. As to Chambers/Ullman, clarity in "why there is infringement" would not reduce defense costs when the defense is invalidity, not non-infringement.

PatentlyO refers to IPWatchdog: Gene Quinn provides his take on the op-ed at IP Watchdog.

**Note the following exchange of comments at PatentlyO

Paul F. Morgan
February 18, 2015 at 2:53 pm

Applications are of course printed publications when they are published. But I suspect your real question is as to using the filing date benefit of published applications for prior art purposes, not the effect of their publication date?

Ned Heller
February 18, 2015 at 3:12 pm

Paul, you got it.

The phraseology of the statute seems to require that applications be treated as publications. I daresay that the drafters did not intend this, but the statutory language is mandatory in its nature.

I wonder if anyone has raised this issue in an appropriate case?

And there were negative comments about Bessen/Meurer

February 18, 2015 at 9:37 am

Unfortunately, this WSJ editorial (if you can call it that) is based upon the discredited Bessen and Meurer study reported in “The Direct Costs from NPE Disputes.” The methodology in that study has been shown to be highly flawed by others. No more need to be said as to unreliability of this WSJ editorial to prove anything.

One notes the discredited "95% patent grant rate" saga appeared in an eBay brief to the Supreme Court. "Horror stories" live forever.


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