IP: Whack a troll

Federal Circuit affirms sanctions for frivolous patent licensing campaign.

In a true man-bites-dog moment, on July 29, 2011, the Federal Circuit affirmed stiff sanctions against a patent troll for, well, being a patent troll and engaging in the very patent terrorism that some commentators say the court’s own jurisprudence—unintentionally, of course—has enabled for decades.

We all know the drill. A patent holding company buys a patent portfolio claiming, say, a new-and-improved coffee cup, and you become one of countless companies sued for infringement. Trouble is, you don’t make or sell coffee cups. You make and sell swimming pools. No matter. The patents recite a “fluid containing receptacle with hydrophobic side walls and a top opening,” and that’s, as they say, close enough for government work. You want to fight, but the plaintiff offers a quick deal in the high five or low six digits, but only while supplies last. (Limit two per household, please.)

In Eon-Net LP v. Flagstar Bancorp, the Federal Circuit held that the proverbial coffee cup was just a coffee cup, and then whacked the patent troll plaintiff with stiff sanctions for suing the proverbial swimming pool manufacturer who, surprisingly, decided to fight. The patent described a method of inputting information from a “document” or “file” into a computer program where the information originated from hardcopy documents. The defendant’s ecommerce website certainly processed information, but none of the information originated from hardcopy documents. No matter. The troll still sued, and asked somewhere between $25,000 and $75,000 to settle.

Only the defendant—what’s the expression?—defended! And that spelled trouble for the troll, which the district court whacked with more than $600,000 in sanctions, and which the Federal Circuit affirmed.


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Jeffrey Dean

Jeffrey Dean is a partner of Marshall, Gerstein & Borun LLP, and concentrates on the defense of patent infringement claims on behalf of corporations....

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