Cisco, Motorola, and NETGEAR recently banded together to fight an NPE that attempted to sue thousands of small businesses for infringing on a wireless internet ("wifi") patent. (http://www.docstoc.com/docs/document-preview.aspx?doc_id=132803542). Cisco, Motorola, and Netgear attempted to prove that Innovatio was purchasing patents for the purpose of racketeering. The three tech companies attempted to slap Innovatio with a RICO, a legal provision that allows the U.S. government to sue for criminal penalties. RICOs have traditionally been reserved for criminal organizations such as the mafia and for extreme cases of insider trading (Michael Milken). However, courts eventually struck down the allegation that Innovatio was attempting to racketeer.
Hopefully, this case will establish a precedent for large tech companies to aggressively fight patent trolls. It remains to be seen if additional legislation will be introduced by the Obama Administration to potentially decrease the amount of patent-related lawsuits. However, if a legal precedent was established that suggested that patent trolls could be pursued as racketeers, it would greatly reduce the prevalence of such patent trolls and would likely be the longest-lasting and most attainable solution.
I just wrote a piece about whether the patent system is flawed, and this certainly seems like an argument for those that believe it is. The system has created a place for these patent trolls.
ReplyDeleteI too find it odd that the loopholes in patent law are so easily identifiable. It's a wonder that the government hasn't changed some of the regulations to improve the current system. If this case outcome eventually rules in favor of Ciso, Motorola and Netgear, I also agree with both of your arguments that patent trolls will be more cautious and afraid of picking patent battles with companies in the future.
ReplyDeleteI agree with Nana that if the court case had gone in Cisco, Motorola, and Netgear's favor, it certainly would deter these NPE's and patent trolls from continuing this excessive litigation; however, the court case was struck down, and now as Aaron said, there is a marketplace now for patent trolls. Because of the prevalence of these patent trolls, it is pretty useful to be familiar with patents and intellectual property as one considers moving into the tech field.
DeleteEven though C/M/N weren't successful in slapping patent trolls with a RICO, I think the precedence of the case will encourage big tech companies to aggressively pursue other NPEs, which might at least temporarily discourage patent trolling.
DeleteChristopher,
ReplyDeleteI absolutely agree with you. The number of patent-related law-suits have to be decreased, and there have to be some measures taken to limit unethical activities by non-practicing entities. However, it might take sometime for changes to happen.