I know, I know. The Goodwin Proctor tome explicitly states that it’s a Tactical Guide to NPE litigation, be we all know they mean patent trolls. Otherwise, they’d have just called it “Patent Litigation: A Tactical Guide for Practitioners”.
Alas, they did not. I know because I signed up for my copy of said book which arrived by Federal Express and nearly scared me to death because the dude rang my doorbell at 5:00 on an afternoon that I couldn’t remember having ordered anything. First thing I noticed? Y’all, this thing is huge. Like, really big. It’s about four inches thick and GBC-bound and could double as a kettle ball if I were at all interested in doing anything exercise-related right now. I dove right into it because nothing says “Happy Hour!” like a Cuba Libre and a book on how to defend against the dark arts of patent trolls. Am I right? Of course, yes.
The fun begins on page one, as fun is wont to do, with the Alliteration Award for this sentence:
NPE Litigation is a controversial subject shrouded by shrill, simplistic sound-bites.
Ah, I love me some word-smithing.
The Guide, as it shall heretofore and thereafter be referred to as, starts with a definition of NPE that takes up about four pages. Man, that’s a lot of words. They talk on page two about R&D firms, which would include, in my opinion and as a result of technology transfer programs, Universities. My notes in the margin read something to the effect of “it’s really who companies go after and how that helps define a patent troll, and it matters because the point of being an NPE is that you avoid the risk of counter-suits since you’re not actually manufacturing anything.” I’m not sure they made that point anywhere and it’s a salient one. There’s a reason some entities that hold patents are non-practicing, and the lack of counter-suit risk is it. That’s a big thing and how come y’all didn’t harp on it like I’m doing?
Anyway, by the time we get to the section on Licensing/Litigation Techniques The Guide has started using the watered-down “patent troll” term known as the PAE, or Patent Assertion Entity because calling companies what they do is somehow…bad? I dunno, but people who aren’t me don’t like to do it so they call them PAE’s. I suppose if you’re going to do that, I’d like to see the middle word changed to Aggressive, rather than Assertion because trolls are aggressive. They don’t pop out from under the bridge and say “I’d like some money, please, for my nefariously bogus patent over here if you don’t mind, please.”
No, they instead start out with a threatening letter (which you should totally track here if you get one!) and when that doesn’t work they get aggressive and sue you. See? PAE should equal Patent Aggressive Entity. You’re welcome.
The Guide talks about how, when PAE suits are tried on the merits, our little aggressive friends have a pretty low win rate. In my head when I read that I’m all “Merits? What are those to a troll?” They don’t care about the merits, because they don’t really ever intend to get to court. They try their demand latter tactics first and when those don’t work they sue, all the while knowing that the likelihood of actually going to trial is slim because lawyers are risk-averse and would rather just pay up. Merits? Phpppppppft.
One point The Guide made that I hadn’t really written about or explored in depth is the timing of troll/PAE lawsuits. Typically, they wait until the technology (supposedly) covered by their (loosely constructed) patent is in full use and they can go after a lot of people, or a few big-named people for big money. The Guide contrasts this with producing/practicing firms who tent to sue early in the patent term. Great point!
On page four we get into something that really sticks in my craw, shell companies. Dude, if you have to bury your acts deep in paperwork and incorporate in weird places and plan at any time in your future to use the phrase “I have no knowledge of that subsidiary’s actions” then listen up: You’re doing something wrong. If you’re not, why hide? Don’t give me that malarkey about “tax advantages”. Not buying it. It’s to hide what you’re doing. That’s why companies like Ericsson sell off patents to trolls. When litigation hits the fan, the general populous isn’t likely to dig up the information on who really owns a patent. Ericsson maintains its reputation while still monetizing its patents. It’s all kinds of slim shady and I don’t like it.
The Guide makes a really good point about shell companies which is this: Because a shell company doesn’t bear the more recognizable name of its parent, by design, it may be assumed when you receive a demand letter (that you immediately go and enter into That Patent Tool) from one of these nobodies that there’s no teeth to it. Well, there isn’t in a sense because a demand latter does not require any action at all. DEMAND LETTERS ARE NOT EQUIVALENT TO LAWSUITS. Nevertheless,
If you receive a complaint from a company you have never heard of, or for which there is little public information, do not assume it does not have the resources required for patent litigation.
By ‘complaint’ they may mean an actual lawsuit, in which case yep. That’s exactly right and a fantastic point.
As previously mentioned, The Guide is a four-incher and therefore may engender more than one post…I haven’t even read the whole thing yet though in fairness to me, the last five sections are texts of the bills brought before Congress and/or Congressional record transcriptions so, you know, yawn. But I bring it up now for three reasons:
- Goodwin Proctor seems to be going the way of Jones Day, who advertised that they can handle IV in patent litigation. The Guide is a marketing tool for Goodwin Proctor, and I think they’re smart to distribute it.
- There’s a great chart on page 16 about legislative initiatives. Concisely done.
- I’m not 100% sure I’m on board with their final definition of NPE by tying it to percentage of revenue earned. I don’t care how much revenue you earn from asserting your patents. I care how and when and upon whom you assert because that’s what matters when defining trollish behavior.
When well respected and large firms start putting together playbooks like they’re NFL teams and advertise that they can beat IV at their own patent game, its further proof that patent trolling is a problem. Frankly, I like that law firms are coming out with this kind of thing because as private entities, I think this is exactly where the problem needs to be solved.
And yes, I do see the irony that lawyers are saying they can solve a problem that they themselves started. Not lost on me, folks.