A Haven for Patent Pirates
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Although Tyler credits Ward and other Marshall judges with a solid knowledge of patent law and an extreme devotion to efficiency, he believes Marshall’s reputation as a “rocket docket” for patent cases only expands the advantage most plaintiffs already enjoy in such suits. Indeed, patent plaintiffs whose cases go to trial in Marshall win 88 percent of the time, according to research firm Legalmetric, compared with 68 percent nationwide.
The general rule in patent law is that defendants can’t file a motion to dismiss until a “Markman hearing,” a post-dotcom procedure during which a plaintiff finally reveals to a judge the exact nature of the infringed claim.
Local rules in Marshall, meanwhile, ensure a brisk pre-trial process, meaning that in the 30 to 60 days it takes to reach the Markman milestone, plaintiff’s attorneys have ample time to comb through a defendant’s paperwork, e-mail, and source code, and turn the broadly written language of a U.S. Patent Office filing into the scalpel-sharp language a jury will understand.
The final result is a high-stakes version of some gambling card game: Given a choice between a $200,000 settlement and a $2.8 million trial – which is the mean cost to a defendant of litigating patent cases in Texas involving between $1 million and $25 million in damages, according the American Intellectual Property Law Association – most defendants choose to fold early and cut their losses.
“Once you’re named as a patent infringer, you’re there until you settle, get a summary judgment, or go to trial,” says Tyler. “If you combine that with an accelerated docket, it just raises the pressure on defendants.”
Such pressure leads to a new class of plaintiffs that Tyler and other attorneys label “patent pirates.” Essentially shell companies, they do little more than purchase patents with the purpose of squeezing quick settlements out of major technology companies whose technologies may overlap with the patented feature.
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