Pay-to-Play for Sovereign Immunity? A New Strategy Employed by Drug Patent Holders


By Seth Parent

In May the Supreme Court decided TC Heartland, requiring patent infringement claims be brought where the defendant either “resides” or has an “established place of business” (rather than in the notoriously patent-holder friendly Eastern District of Texas). This change has led patent-holding companies to search for new strategies to increase the efficiency of their business model, and in turn, their profits.

These patent-holding companies, or “patent trolls,” as they are often referred to, may have just unveiled one such strategy. Following news of Allergan’s announcement that it was transferring title of six different pharmaceutical patents to the St. Regis Mohawk Tribe in September, patent holding company SRC Labs has now elected to pursue a similar strategy. Not only did these deals transfer the patents to the St. Regis tribe, they also provided the tribe with several million dollars upfront in addition to several million per annum. Continue reading

Pirates v. Trolls: Justices Trying to Play a Balancing Act on the Standard for Patent Law Treble Damages

troll-pirateBy Don Wang

As my buddy Vijay reported last November, the Supreme Court granted certiorari for Halo Elecs, Inc. v. Pulse Elects., Inc.., which was consolidated with Stryker Corp. v. Zimmer, Inc., to address whether it should change the current standard for awarding treble damages in patent suits. On February 23, 2016, the high court conducted the oral argument, and the transcript is available here. Continue reading

Will Google’s Patent Purchase Promotion Foster Innovation?

patent By Cheryl Lee

Some believe the US patent system is being used to curb innovation, handicap inventors and drain corporate resources in lengthy litigation that cripples competition rather than being used to drive innovation. Many US legislators believe that patent ‘trolls,’ the non-practicing entities that purchase patents and pursue infringement litigation, threaten America’s economy and ability to innovate. In response to the patent trolls, Representative Bob Goodlatte (R-VA), along with 27 cosponsors, introduced the anti-troll legislation, H.R. 9 – Innovation Act in February, 2015.

However, the US Congress is not the only entity that wishes to solve the problems within the patent system. On April 27, 2015, Google announced the ‘Patent Purchase Promotion,’ an experimental marketplace inviting owners to directly sell their patents. Google stated that bad things such as lawsuits and wasted efforts happen when smaller participants sometimes end up working with patent trolls. Therefore, the Patent Purchase Promotion is Google’s attempt to “remove friction from the patent market” and “help improve the patent landscape and make the patent system work better for everyone.” The Patent Opportunity Submission Portal opened from May 8 – 22, 2015 for patent holders to submit information to Google about the patents they wanted to sell and at what price. Continue reading

Loser Pays: US Supreme Court Gives District Courts Greater Discretion to Award Attorney’s Fees in Frivolous Patent Suits

ImageBy Peter Montine

The United States Supreme Court has made it easier for district courts to award attorney’s fees in frivolous patent infringement cases. In two different cases, the Court held that the decision to award attorney’s fees to the prevailing party was within a court’s general discretion, and that a review of such a decision was analyzed under an “abuse of discretion” standard.

In the first case, Octane Fitness, LLC v. Icon Health & Fitness, Inc., Octane had been sued by ICON for infringing on ICON’s patent for adjustable elliptical machines. Octane succeeded on a summary judgment motion in district court to dismiss the suit. However, when Octane moved for attorney’s fees, the court denied the motion, following the standard set forth in Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc. That standard requires that a court find the claim to be either (1) objectively baseless or (2) brought in subjective bad faith. Finding neither of these things to be true, the court dismissed the motion for attorney’s fees. Octane appealed, but the Federal Circuit, which issued the Brooks standard, upheld the district court’s decision. Continue reading