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SCOTUS to hear case against "patent trolls"

The patent and intellectual property arenas are difficult ones, even for attorneys. It is sometimes hard to understand exactly what protections and rights preexisting patents, trademarks and copyrights bestow. Some uses are acceptable, while others are not. In some instances, it is proper to seek judicial relief against intellectual property violations, but other times such action is borderline frivolous.

An entire cottage industry of allegedly abusive patent-related legal claims - by so-called "patent trolls" or "non-practicing entities/NPEs" - is closely watching an upcoming case set to be decided by the Supreme Court of the United States during their upcoming fall session. That case, Oil States Energy Service v. Greene's Energy Group, specifically deals with the use of inter-partes review (IPR) of patent infringement claims and disputes by the Patent Trials and Appeals Board (PTAB) of the U.S. Patent and Trademark Office.

  • Oil States argued to a federal district court that a hearing before the PTAB is a regulatory action, and not sufficiently akin to a jury trial, thus violating their constitutional rights.

  • The court disagreed, affirming the PTAB's underlying decision in favor of Greene's.

  • Greene's requests that the Supreme Court affirm the lower court and remand the case for further action consistent with the original PTAB decision.

Patent trolling

Outside the intellectual property or technology industries, many people are unaware of what patent trolling is. Patent trolls are companies or individuals who bring lawsuits against other companies under the guise of intellectual property infringement. These companies purchase and stockpile intellectual property, but never use it to create anything, hence the name "non-practicing entities."

If another company creates a product that in any way infringes upon their IP, the company brings suit. Most often, the IP is actually of little substantive, practical economic value, since it isn't directly tied to the NPE company's bottom line.

The IP does hold economic sway over the companies using it, however, most of which are smaller start-ups who cannot afford the hundreds of thousands of dollars that the average patent suit costs. The companies will usually settle, not because they admit infringement, but because it is too expensive to fight the matter.

In this way, NPEs can become very profitable businesses, scooping up massive amounts of relatively worthless intellectual property, and parlaying that into a litigation mill that ends in pricey settlements.

Reach out for help

If your business has any questions about establishing your intellectual property (patents, copyrights, trade secrets, etc.) or defending yourselves against an infringement allegation before the PTAB or in court, contact a local intellectual property attorney.

On behalf of Crockett & Crockett posted on Friday, September 8, 2017.

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