Demand Letters And The Entry (Or Not) Of Such Into A Repository

Almost a year ago, because President Obama has no regard for my schedule, I launched an online patent assertion/demand letter repository called That Patent Tool.  It’s been well received, and lots of people, really really cool people to boot, have signed up.  There’s data in the system, and for that I am most humbly grateful!

I had a discussion with Julie Samuels just before she left EFF.  I have to admit that I was kind of upset when I saw that they came out with trollingeffects.org because, like the Highlander, I was thinking “There can be only one.”  THE WORLD CANNOT HANDLE TWO DEMAND LETTER REPOSITORIES, PEOPLE!!  I think I may have even given the folks at the Application Developer’s Alliance some {ahem} feedback for throwing their weight behind Trolling Effects rather than behind me.  Ah, the insecurity foibles of youth.  Sorry, ADA!!

therecanbeonlyone

 

Only Julie’s point, which she made ever so calmly and with much less drama than I myself am prone to, was “Um, no I don’t think so.  If people are willing to put the information in one repository, that almost makes them more likely to put it in another.”  Well Bob’s your uncle, I never thought of it that way.

But you know what?  People are not flocking to enter demand letter information at nearly the rate either of us expected.  I mean, the President himself said we needed a Demand Letter Registry.  Right there out in the open, he said that.   The President said you should do it and yet hordes of people have consistently not done it which means someone’s getting sent to bed without supper tonight.

As serendipity would have it, this article by Megan M. La Belle was posted on Twitter by @PatentWire  It includes a lot of things I personally hadn’t thought about in terms of the effects of settlement (either through the use of demand letters or settlements after a lawsuit has been filed) on the patent industry in general.  While the entire article is worth a full and focused read, I think the very best summary of the issue is right at the beginning:

Not only are patent settlements frequently coerced, they also come at the expense of judicial precedent, which is particularly valuable in the patent context since an invalidity judgment estops the patentee from ever asserting that patent again.18 A related concern is that patent settlements may achieve peace between the parties, but not justice. When patent litigants settle, the accused infringer usually agrees to pay the patent owner, stipulates to the patent’s validity, and promises not to challenge the patent in the future.19 Even assuming such an agreement is in the best interests of the parties, it may undermine the public·s interest by allowing a potentially invalid patent to remain intact.20

Note:  footnotes are left in the quote, but you’ll need to refer to the original article, linked above, to view them.

Let’s pull out a quote from a quote: “A related concern is that patent settlements may achieve peace between the parties, but not justice.”  Peace is what demand letters are designed to achieve, if only for the asserter and through a very Reagan-esque “through strength” approach.  The trolls don’t want justice, they want money, they want their toll.  They know that going to trial is not only expensive for them as well as the defendant, but it means the potential for loss, either on invalidity or non-infringement.   By exposing what they are asking for and who they’re asking it of, other recipients can get a lock on how to respond.  This is the primary goal of collecting the letters: exposure.

What the article seems to indicate is that in some cases, going to trial (or “adjudicating”, because that’s a much fancier word) is better for the public good because it will remove bad patents from the system, the data indicating that when patent suits go to trial, invalidity is a very likely outcome.  I won’t go into all the details of which cases the author feels are better going to trial vs. settling because that would be plagiarism.

What I’d like to touch on is that those companies in the Patent Troll Fighter Heroes Gallery believe in this mantra, that it is better to fight (litigate) than settle with the trolls.  To me and to them, it is about the moral issue and how you should never not ever let the bully win.  According to the article, there is empirical data to back that approach up, suggesting that not settling is the better way to both justice and more effective patents.  With all the talk about “bad patents” out there, and there are many (hint: mostly software), I wonder if part of the reason is that so few patent cases actually get litigated?

Here’s another issue with demand letters and settlements:

Another reason scholars have denounced settlement is because it is shrouded in secrecy.73 Unlike adjudication, the outcome of which is available to the general public, settlements are usually confidential, so that only the parties know the terms of the agreement.74

And again, this is why I and others have created an online demand letter repository.  It’s a way to de-shroud settlement requests, which is what a demand letter is, if we are wanting to use the most euphemistic term possible.  I do realize that, in order to avoid declaratory judgment or venue issues, many trolls no longer put all the information into a demand letter that they used to.  But a surprising amount of trolls still do, as you can tell by both my data and EFF’s data.

donotfeedthetrolls

I’m working on a post about why recipients are reticent to upload letters, because I’ve spoken with a lot of people about their fears which are frequently summed up in two words:  “outside counsel”.  As in, my outside counsel won’t let me.  We’ll get to that faulty lawyer logic in due time.  The most common response people give so far is the age-old “What’s in it for me?”

I’ve been looking since the beginning for ways to incentivize or entice or coerce or somehow get people to provide this data.  Recognizing that settlement may not always  be in the public’s best interest in patent litigation, when it comes to dealing with trolls I think that exposure of those “settlement” demand letters actually is in the public’s best interest.

Now all I have to do is convince the rest of you…

 

JustSayin_small_New

IPTT

{Meme found here. Incredibly awesome troll sign found here.}

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2 thoughts on “Demand Letters And The Entry (Or Not) Of Such Into A Repository

  1. Dear Steph,

    I am Jimi, I am working on a prior art searching platform. I would like to ask you on your opinion about the importance “prior art” for both litigation and settlement (including PGR, IPR, CBM).

    I am from more of search background, I was also wondering on the potential/acceptance of non-patent literature you think are out there?

    Best regards,
    jimi

    • Hi Jimi,

      I think that the single best place for prior art searching is at the USPTO. Currently, as pointed out in my Interview With A Patent Examiner, Part II, the USPTO has very little searching capabilities. Putting the search at this stage of the game would go a long way in preventing bad patents to start with!

      As for non-patent literature, I understand from the folks at Article One Partners that this makes up the majority of their search results. Because there are so many bad patents already out there, I think the idea of searching in non-patent places is a HUGE improvement!

      I hope this helps, and apologies for the very late reply.

      Cheers,

      Steph

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