Patent Litigation Tips

Subscribe to Patent Litigation Tips via RSS

My colleague Daniel Farris and I co-wrote this post.  Daniel is a part of my retail patent litigation team with strong technical experience related to internet and computer-based technologies.

Thanks to the Federal Circuit’s recent In re Staats decision, a favored patent troll tactic has just been strengthened.  Retailers are all too familiar with the tendency of patent trolls to take extremely broad positions regarding the scope of their often old and out-dated patents.  One prime example of this is on display in SFA Systems v. Amazon.com, et al. (E.D. Tex.).  SFA is asserting two patents covering essentially the same technology.  The older of the two, U.S. Patent No. 6,067,525, was filed in 1995, and is described in the abstract as:

A salesforce automation system which integrates computerized intelligent automated salesperson support for multiple phases of the sales process. Various subsystems may be provided to facilitate the sales process which may include pre-sales lead generation, maximize time spent with the customer, effectively manage an order, ensure customer satisfaction, and retain the customer for future sales.

SFA has asserted this patent against retailers ranging from Talbots, Kate Spade, and New York & Co., to TigerDirect and Buy.com, and from Dick’s Sporting Goods and GNC to PetSmart and Dollar Tree Stores.  The basis of SFA’s claims is that these retailers all operate e-commerce websites that display related products to a consumer when he or she selects a product of interest (essentially, the “you might also like” or “people who bought X also bought Y” functionality).  In other words, SFA is asserting that a patent from 1995 that describes a system to assist salespeople in managing lead generation and customer contact, in fact, covers present day e-commerce techniques driven by relational databases and web application software.

Unfortunately, the overbroad allegations in SFA are not unique.  SFA is reading from a standard patent troll playbook, and the Federal Circuit’s In re Staats decision will only increase the level of uncertainty in determining the scope of a patent’s claims.  In re Staats deals with a seldom used procedure for correcting errors in an issued patent that is likely about to become more common.  The Patent Act allows patentees to file a reissue application related to a patent after issuance.  If the reissue application is filed within two years of the patent’s issuance, the patentee can potentially broaden the claims of the original patent.
Continue Reading Federal Circuit Opens the Door to Misuse of Reissue Procedure by Trolls

I wrote last week about some key implications of PWC’s excellent 2011 patent litigation study.  The study is so dense that it deserves more discussion.  Here are several of the key takeaways from the study. 

  • Big Dollars for Trolls.  Troll damages awards were nearly double those of practicing entities received by practicing entities.
  • NPE’s

…

dPatent troll litigation has received some excellent media exposure this summer.  First, Chicago’s Ira Glass and his This American Life team put together a phenomenal hour-long program dissecting the patent troll phenomenon – if you have not listened yet make the time, it is very well done.  More recently, Santa Clara University Professor Colleen…

Three Boston University professors – James Bessen, Jennifer Ford and Michael Meurer — are writing a provocative law review article using empirical data to quantify the cost of patent trolls. The cost of patent trolls is clear to every retailer that I speak with, but the results of the article are still shocking:

[Patent trolls]

…

Joint patent infringement has become a common defense for retailers and their vendors in patent litigations.  Particularly with internet and software technologies, the retailer or the vendor alone cannot perform all of the steps of a method or do not have all of the hardware required of the system.  Of course, joint infringement has been…

Indemnification is a key component of most retail patent litigation.  Whether the accused technology is internet-based or focused on a product, there is almost always an indemnitor somewhere in the supply chain.  And indemnification can be a $1M+ responsibility.  For what is often a seven-figure decision, many companies are surprisingly haphazard about indemnification.  Here are…