Patent Troll Update: Spanking the Extortionists


To a very considerable extent, patent trolls are simply extortionists. A whole class of patents were thrown out by the U.S. Supreme Court in its 2014 decision in Alice Corporation v. CLS Bank International, which held, in effect, that adding technological-sounding language to existing ideas isn’t enough to get you a patent. At the risk of oversimplifying, just programming a known technique doesn’t get you a legitimate patent. Unfortunately, there are hundreds, maybe thousands, of just such patents on the books. Almost certainly invalid, but “official looking” to a non-lawyer.

But patent litigation is very expensive; most ordinary folks can’t afford it. A good intellectual property lawyer starts at $500 per hour. Which enables the shakedown artists and extortionists on the fringes of intellectual property law. They can use their very dubious patents, likely invalid under Alice, to coerce a payment from someone arguably using the techniques described in their patent. Rather than lawyer up, the victim pays some money. It’s less than they’d pay a lawyer to have the bogus claim thrown out. If the victim does lawyer up, then the extortionist immediately dismisses their patent infringement lawsuit. The victim escapes paying the extortionist, but will have paid a chunk of change to a lawyer to get the case dismissed.

Until Michael Garofalo’s Garfum.com sued Pennsylvania photographer Ruth Taylor, saying she was infringing Garofalo’s US Patent No. 8,209,618. Garfum claimed the patent was infringed by the photo contests Taylor runs on her website, Bytephoto. Garfum demanded Taylor pay $50,000 for the infringement, later reduced to $5,000 and then just $2,500. Instead, Ms. Taylor took the lawsuit to the Electronic Frontier Foundation, which agreed to represent her for free. EFF filed a motion to dismiss Garfum’s claim, noting the patent was invalid under Alice. Garfum promptly dismissed its lawsuit. As you can see, the classic extortionist tactics.

But EFF didn’t let Garfum get away with it. EFF moved for attorneys’ fee, even though the lawsuit was technically dismissed. And EFF won. Chief Judge Jerome Simandle held Garfum had “repeatedly offered insupportable arguments on behalf of an obviously weak patent, including wholly conclusory declarations to supports its position.” And that “Ranking things in categories… was well known before the Internet.”  Judge Simandle found the case therefore qualified to an award of attorneys’ fees to the victim. And awarded Ms. Taylor and EFF about $30,000.

A single award of $30,000 against an extorting patent troll isn’t a bank account breaker in itself. But it sends an important signal that the shakedown isn’t free any more. If the courts spank the bogus claims, and award the victims the cost of litigating in response to the shakedown, the patent trolls just may  crawl back under whatever rocks they crawled out from under.

Call it an encouraging development.

Advertisements