Tag: cote

Court delivers a nasty precedent for patent trolls

 

TrollhunterMoviePosterPatent trolls have been as difficult to kill as cockroaches and Keith Richards, not even a 2014 US Supreme Court decision could stop them.

But federal judge Denise Cote has come up with a novel tactic which could stuff them up by hitting them in the legals. She slapped a half-million-dollar bill on the lawyers and said that they were personally responsible for paying it, not their client.

The move could make lawyers less keen to take on patent trolls as clients. Part of the patent-troll economic model is based on lawyers taking a contingency fee, meaning that they take a percentage of whatever money is extracted from victims rather than being paid an hourly fee.

Cote said that this method makes the lawyers more of a partner than a traditional contractor and they must share the risk of the case.

If lawyers start demanding upfront hourly fees patent trolls will have to give up on chasing the most tenuous lawsuits in the hope of settling.

The case at the centre of the ruling was Gust vs. Alphacap Ventures and Richard Juarez. Cote found that patent troll Alphacap had pursued a case against Gust, despite the US Supreme Court ruling that made it clear it couldn’t succeed. The idea was to force the  flakey case to settle and give the troll and the lawyer a profit.

Normally, patent trolls rely on large numbers. If they threaten many companies, they’ll make more than enough to justify their efforts. Then, by suing a handful of other companies, they scare more innocent firms into paying or else.

What the judge specifically did was to tell Gust that it could retrieve the court’s ordered money from either the law firm or the patent troll.  This was a slap in the face to the lawyers representing the patent troll who had already told the firm that suing the patent troll was pointless because it had no money, making it judgment-proof.