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District Court Undoes Fee Award Against Patent Bully

DEEPLINKS BLOG
December 22, 2016

A district court judge has issued a disappointing ruling reversing an earlier decision to require an abusive patent litigant to pay an EFF client’s attorney’s fees. Judge Jerome Simandle of the District Court of New Jersey held that, even thought the patent was invalid, the relevant law was too uncertain to find the case exceptional and award fees.

This case began in late 2014 when Garfum.com Corporation sued a small photography website called Bytephoto.com for patent infringement. Garfum claimed to own the idea of having a ‘vote for the best’ competition, but on the Internet. The case had a lot of problems. For one thing, Garfum had filed for its patent in 2007 but Bytephoto had been running online photo competitions since 2003. Also, its absurd patent, U.S. Patent No. 8,209,618, was plainly invalid under the Supreme Court’s decision in Alice v. CLS Bank, which holds that abstract ideas do not become patent eligible simply by being implemented on a generic computer or on the Internet.

EFF took the case on behalf of the owners of Bytephoto, Ruth and Steve Taylor, and filed a motion asking for the patent’s claims to be found invalid under the Alice standard. The day after the court scheduled a hearing on that motion, Garfum voluntarily dismissed its lawsuit. We then filed a motion for attorney’s fees. The court awarded fees finding that Garfum should have known from the outset that its case had no merit.

However, shortly after the court’s decision on fees, Garfum received a second patent from the Patent Office with claims almost identical to those Garfum had asserted against Bytephoto. Garfum then filed a motion to reconsider the district court’s fee ruling, arguing that the Patent Office’s decision to issue this new patent showed Garfum had not been unreasonable. On December 16, the district court agreed with Garfum. In reaching this decision, the judge noted that the case law interpreting Alice is uncertain. While we agree that, in some cases, it may be challenging to apply Alice, we respectfully disagree that this was such a case. Garfum’s patent itself repeatedly states that it applies merely conventional computer technology. In our view, the claims are clearly ineligible under Alice and Garfum should have known that when it filed its case.

Judge Simandle also relied heavily on the Patent Office’s decision to issue yet another silly patent. He noted that the law, which presumes patents valid and requires proof of invalidity by clear and convincing evidence, suggests that the Patent Office is entitled to some level of deference. That is a correct statement of the law. Unfortunately, sometimes the law is disconnected from reality. In this case, given the quality of the patent, we think the Patent Office has not earned any deference.

Garfum’s second patent, issued in April 2016, serves only as a monument to how deeply broken our patent system still is. Despite a federal judge having already found almost identical claims ineligible under Alice v. CLS Bank, the examiner didn’t even discuss the issue. Just as bad, even a cursory online search would have revealed that the claims are obvious. Websites, including our client’s website, were running “vote for your favorite” or “people’s choice” photo competitions many years before Garfum filed for its patents. Unless the Patent Office significantly improves, we will continue to be flooded with abysmal patents like these that have no value except as litigation weapons for trolls.

While this revised fee ruling is disappointing, our client’s choice to fight back had a positive impact. Importantly, the court did not change its view that Garfum’s first patent is invalid (and this reasoning should also apply to its second patent whose claims are almost identical). So Garfum’s litigation campaign has been stopped in its tracks. The firm that represented Garfum had filed hundreds of patent troll cases for other clients around the country. That firm now appears to have collapsed after enough targets stood up to defend themselves.

Although this latest ruling may embolden other litigants with weak patents, we will continue to work to reduce the harm caused by patent litigation abuse. We thank Ruth and Steve for their courage in standing up to this bully.

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