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Patent troll must pay victims’ legal bills in early test of new Supreme Court fee-shifting rules

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A federal judge on Friday ordered a notorious patent troll to pay the legal costs of a start-up after the troll lost an ” obviously baseless” lawsuit over a questionable “matchmaking” patent.

The ruling appears to be the first time that a court has applied new “loser pays” criteria issued by the Supreme Court in April, which makes it easier for companies to recover fees from trolls.

The case involved FindTheBest, a shopping startup that helps consumers find products on the internet. The troll, which has also sued more than 20 other companies, had claimed FindTheBest infringed on a patent for “matchmaking,” a concept that U.S. District District Judge Denise Cote said in an earlier ruling has been around for “millennia.”

Despite the fact that FindTheBest obviously did not infringe the patent, the troll issued a series of threats and, in a surreal turn, accused the startup’s lawyers of committing a hate crime by calling the troll a “patent troll.” The troll also sought a gag order forbidding FindTheBest from mentioning its settlement offers.

In ordering the troll to pay FindTheBest’s legal fees, Judge Cote also offered a succinct description of the troll and its business model:

[The troll] Lumen’s motivation in this litigation was to extract a nuisance settlement from FTB on the theory that FTB would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation.

In fighting the case, FindTheBest reportedly expended around $200,000 in fees, which is considerably more than the pay-off the troll had earlier demanded to go away. The amount also doesn’t take account of the many hours that FindTheBest’s CEO Kevin O’Connor and his staff had to expend to tangle with the troll.

The fee award is groundbreaking, but it still amounts to a minor consolation prize for those who argue the entire patent system should be reformed. Last month, the reformers suffered a major defeat when Senate Democrats, under pressure from trolls and trial lawyers, pulled the plug on a key bill.

Here’s a copy of Judge Cote’s fee ruling, which is worth reading in its entirety to get a flavor of the trolls and their business model:

FTB Fee Order

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One Response to “Patent troll must pay victims’ legal bills in early test of new Supreme Court fee-shifting rules”

  1. tommariner

    A double edged sword — you know every time a gigantic legal team successfully wreaks havoc on an innovative organization, they will demand (and probably get) even more damage when the “losing” organization is charged for IPO-sized legal bills at a gazillion bucks an hour.

    I have less difficulty with even larger firms who actually developed and use the patented property — they are much more likely to offer licensing terms (with payments or cross license).

    The balance of our patent system has shifted from what the Constitution asks — limited time protection in turn for telling everybody what was invented, to a legal game where the interpreters of the rules count rather than those who innovate.