Patent trolls cost companies thousands of dollars in unnecessary fees and Twitter’s legal counsel, Ben Lee has had enough.
In a guest post on Gigaom, Twitter’s legal counsel, Ben Lee details his frustration dealing with patent trolls, citing Twitter’s (expensive) policy to fight patent trolls with “all their might.” It seems to be working as they’ve yet to pay to settle a patent suit.
Still, even meritless lawsuits cost us money in attorney fees, and force our engineers to spend time with lawyers rather than improving our product. For example, we recently won a case regarding U.S. Patent No. 6,408,309, entitled “Method and System for Creating an Interactive Virtual Community of Famous People.” After a trial before a jury, we managed to prove that we didn’t infringe and that the asserted claims from the patent were invalid. This patent was “invented” by a patent lawyer, Dinesh Agarwal. According to his own testimony at trial, Mr. Agarwal had no computer science or programming background, and he thought up the whole idea while he was shopping for groceries.
He goes on to detail how patent trolls pay next-to-nothing to secure a patent and many (particularly those going after big companies like Twitter) pay nothing to bring a lawsuit as many law firms take these cases on contingency, but “an average patent lawsuit costs between $900,000 to $6,000,000 to defend.”
And although Twitter was able to recover $10k and change for the suit referenced above, the fee was apparently minor compared to the cost of Twitter’s defense.
Lee draws our attention to a bill introduced in Congress by Representatives Peter DeFazio and Jason Chaffetz.
DeFazio says, “This legislation would protect tech companies by forcing patent trolls to take financial responsibility for their frivolous lawsuits.”
He recognizes that “patent trolls often buy broad patents and then sue companies for allegedly infringing on the patents they’ve purchased. . . . [and] despite thin evidence to back their lawsuits, small companies are often forced to settle because going to court is prohibitively expensive.
The bill, dubbed the Saving High-tech Innovators from Egregious Legal Disputes (SHIELD) Act [PDF],would require NPEs to pay defendants’ legal costs if the suit is unsuccessful.