Form 18 Is Dead. What’s Next for Patent Trolls?
Deeplinks 2015-12-22
Summary:
The Trolls’ Favorite Template Has Been Retired, but Don’t Get Too Excited
It’s easy to file a patent complaint. All a patent owner has to do is say that they own a patent and that the defendant infringed it. The patent holder doesn’t even need to identify which product of the defendant’s they believe infringes the patent, or specify which claims of the patent they’re asserting. It’s an absurdly simple process, and unscrupulous patent tolls routinely take advantage of that fact.
That might have changed this week—the Judicial Conference of the United States has instituted a rule change that includes eliminating the form that’s been used for patent complaints for decades. We hope that the change makes it harder for patent trolls to hit defendants with information-free complaints, but we’re not breaking out the Champagne yet.
One Weird Trick for Forcing Defendants to Settle
This story starts in 2007 with the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly. In that case, the Supreme Court raised the standard for pleading in civil trials, suggesting that fuzzy complaints give the plaintiff an unfair advantage. Justice David Souter wrote, “[T]he threat of discovery expense will push cost-conscious defendants to settle even anemic cases” before litigants get to the discovery process (when litigants turn over evidence to each other). Souter laid out a standard that complaints should carry “enough facts to state a claim to relief that is plausible on its face.”
The ruling sent reverberations around the legal world: judges began requiring more information when plaintiffs filed a suit, and dismissing cases where they thought those details were lacking (more on that in a minute). But the Federal Circuit—the court that hears patent appeals—decided not to apply it at all to allegations of patent infringement.
Here’s where it gets weird. The reason why the Federal Circuit excepted patent cases from Twombly is because of Form 18. It sounds like something out of a Joseph Heller novel, but Form 18 was a template for patent complaints included as part of an appendix to the Federal Rules of Civil Procedure. The form was written in 1938 and hasn’t changed much since. It’s barely over a page long, with a space for the plaintiff to enter the patent or patents that it thinks the defendant has infringed, and another for the type of product the defendant offers that allegedly uses the plaintiff’s invention. That’s the whole form. As Charles Duan put it, “A patent owner can simply name defendants and a few patent numbers on the complaint, and that is enough to get in the courtroom door.”
Thanks in part to Form 18, patent trolls have been able to use bare bones complaints to file cases cheaply and then place expensive discovery burdens on defendants. A company facing a thin complaint has to go through discovery just to find out what it is being sued for. And since patent trolls tend to be shell companies with few documents and witnesses, the discovery process can be far more expensive for defendants than for plaintiffs. That creates intense pressure to settle even frivolous suits.
In K-Tech Telecommunications v. Time Warner (2013), the Federal Circuit ruled that Form 18’s minimal requirements were still adequate after Twombly. It held that “to the extent that any conflict exists between Twombly (and its progeny) and the Forms regarding pleadings requirements, the Forms control.” Only in the baffling world of patent litigation does a Microsoft Word template get precedence over a Supreme Court ruling.
How Much Evidence Is Enough? It Depends Who’s Playing.
Since K-Tech, a notable imbalance has emerged in the way courts consider different kinds of cases. While the higher pleading standards in Twombly have been mostly ignored in patent litigation, they’re arguably overused in civil liberties cases.
Just a few weeks ago, a court threw out a suit that Wikimedia and severa
Link:
https://www.eff.org/deeplinks/2015/12/form-18-dead-whats-next-patent-trollsFrom feeds:
Fair Use Tracker » DeeplinksCLS / ROC » Deeplinks