7 ms·

The first thing to fix is the economic incentive: when you lose a trial due to invalid or non-infringed patent, you have to be the one footing the bill. It pro

by fab13n 13y ago

The first thing to fix is the economic incentive: when you lose a trial due to invalid or non-infringed patent, you have to be the one footing the bill. It probably means that you have to escrow a provision to start such a litigation, to avoid organized bankruptcies of empty shells. If you don't have this money and nobody's willing to lend it to you, it probably means that your case has little merit.

JumpCrisscross 13y ago
"If you don't have this money and nobody's willing to lend it to you, it probably means that your case has little merit." Or you're a start-up or small business that can't afford the contingent liability of a deep-pocketed infringer's legal team. Uncapped "loser pays" clauses also have an unintended consequence of encouraging the infringer to beef up their legal team to intimidate the patent holder.
- fab13n 13y ago
  In France, this is left the the judge's appreciation. "Condamnation aux dépens", literally "penalty of the costs", is a complementary, optional penalty which forces to foot part or all of the winning party's legal costs. The merits of the case and the proportionality of the winning party's legal expenses are taken into account. In practice, it works, together with a couple of anti-ambulance-chasing provisions (e.g. "no gain no fee" contracts are illegal).
  - bradleyjg 13y ago
    There are rules that allow US Federal judges to do the same, but the default expectation is that in most litigation each side will pay their own attorneys fees. In certain narrow areas, such as civil rights litigation, the presumption goes the other way. In my experience most judges are very reluctant to order fee shifting in the absence of a specific statute because, among other reasons, it can be grounds for a malpractice action against the attorneys.
  - rayiner 13y ago
    Loser-pays and a ban on contingency cases is basically a guarantee that consumers will never be able to sue a large corporation to vindicate their rights. It's basically carte blanche for a big corporation to respond to any litigation by hiring the biggest most expensive legal team, adopting a scorched earth litigation policy, and threatening the plaintiff with the resulting bill. Now, that doesn't make it a bad policy per se. It works fine in France, where the government is much more willing to enforce consumer rights using regulatory means. It wouldn't work so well in the U.S. where the government leaves a lot of that kind of enforcement to private litigation.
    - fab13n 13y ago
      Again, in France it's not "_loser pays_". It's "_judge determines who pays, and does so in such a way as to deter financial bullying_". The very reason why we have judges, rather than only cops, is that mechanically applying rules doesn't work. In most non-trivial cases, we need a human being who defends the sometimes subtle spirit of the law. That's one of those cases.
- danielweber 13y ago
  Yes. "Loser pays" and "each side pays their own" are both imperfect systems. Neither is uniformly better than the other.
iamshs 13y ago
"The first thing to fix is the economic incentive: when you lose a trial due to invalid or non-infringed patent, you have to be the one footing the bill." What happens when a small inventor files for a patent dispute, and still loses due to financial muscle of the big company? This clause will just act as a deterrent for me to sue "Google/Apple" because I cannot afford to lose. They will bury me in debt if I go head against them.
- Kliment 13y ago
  If you can afford a patent, you aren't a small inventor. Small inventors are entirely excluded from the patent game, because they cannot afford to enforce. This has been the case for nearly two decades. If you're not convinced, it could be "either pay the costs or lose the patent".
- jessaustin 13y ago
  Is it common for small inventors to sue big companies for infringement? Do they ever win? Even if it happens once in a great while, it's still probably not rational for most small inventors to take on big companies, even today. This is another flaw of the current arrangement. Besides, you don't have to make the escrow amount arbitrarily large. If I can only afford to spend $10k on a particular patent infringement lawsuit, I'll just have to put half of that in escrow and spend the other half on my necessarily limited case. The defense can spend what they want, but they'll only be reimbursed from what's in escrow, and only if they prevail. This would be an additional burden for plaintiffs, but it wouldn't qualitatively change their decision-making process.

by fab13n 13y ago

JumpCrisscross 13y ago

"If you don't have this money and nobody's willing to lend it to you, it probably means that your case has little merit." Or you're a start-up or small business that can't afford the contingent liability of a deep-pocketed infringer's legal team. Uncapped "loser pays" clauses also have an unintended consequence of encouraging the infringer to beef up their legal team to intimidate the patent holder.

fab13n 13y ago
In France, this is left the the judge's appreciation. "Condamnation aux dépens", literally "penalty of the costs", is a complementary, optional penalty which forces to foot part or all of the winning party's legal costs. The merits of the case and the proportionality of the winning party's legal expenses are taken into account. In practice, it works, together with a couple of anti-ambulance-chasing provisions (e.g. "no gain no fee" contracts are illegal).
- bradleyjg 13y ago
  There are rules that allow US Federal judges to do the same, but the default expectation is that in most litigation each side will pay their own attorneys fees. In certain narrow areas, such as civil rights litigation, the presumption goes the other way. In my experience most judges are very reluctant to order fee shifting in the absence of a specific statute because, among other reasons, it can be grounds for a malpractice action against the attorneys.
- rayiner 13y ago
  Loser-pays and a ban on contingency cases is basically a guarantee that consumers will never be able to sue a large corporation to vindicate their rights. It's basically carte blanche for a big corporation to respond to any litigation by hiring the biggest most expensive legal team, adopting a scorched earth litigation policy, and threatening the plaintiff with the resulting bill. Now, that doesn't make it a bad policy per se. It works fine in France, where the government is much more willing to enforce consumer rights using regulatory means. It wouldn't work so well in the U.S. where the government leaves a lot of that kind of enforcement to private litigation.
  - fab13n 13y ago
    Again, in France it's not "_loser pays_". It's "_judge determines who pays, and does so in such a way as to deter financial bullying_". The very reason why we have judges, rather than only cops, is that mechanically applying rules doesn't work. In most non-trivial cases, we need a human being who defends the sometimes subtle spirit of the law. That's one of those cases.
danielweber 13y ago
Yes. "Loser pays" and "each side pays their own" are both imperfect systems. Neither is uniformly better than the other.

iamshs 13y ago

"The first thing to fix is the economic incentive: when you lose a trial due to invalid or non-infringed patent, you have to be the one footing the bill." What happens when a small inventor files for a patent dispute, and still loses due to financial muscle of the big company? This clause will just act as a deterrent for me to sue "Google/Apple" because I cannot afford to lose. They will bury me in debt if I go head against them.

Kliment 13y ago
If you can afford a patent, you aren't a small inventor. Small inventors are entirely excluded from the patent game, because they cannot afford to enforce. This has been the case for nearly two decades. If you're not convinced, it could be "either pay the costs or lose the patent".
jessaustin 13y ago
Is it common for small inventors to sue big companies for infringement? Do they ever win? Even if it happens once in a great while, it's still probably not rational for most small inventors to take on big companies, even today. This is another flaw of the current arrangement. Besides, you don't have to make the escrow amount arbitrarily large. If I can only afford to spend $10k on a particular patent infringement lawsuit, I'll just have to put half of that in escrow and spend the other half on my necessarily limited case. The defense can spend what they want, but they'll only be reimbursed from what's in escrow, and only if they prevail. This would be an additional burden for plaintiffs, but it wouldn't qualitatively change their decision-making process.