Score one for the trolls

by: Henry Meier

The Supreme Court feels your pain when it comes to those increasingly ubiquitous demand letters sent to your credit union by Patent Trolls out to shakedown your credit union for using technology which allegedly  violates an obscure paten but there is not much it  can do about it.  That’s the takeaway from a case decided yesterday by the Supreme Court.  The Court is clearly frustrated with the state of patent law.  Hopefully Congress shares its frustration.

Let’s say you buy a cutting edge ATM.  If a patent holder feels that the ATM maker is using technology for which they have a patent your ATM maker could be sued not only for using the patented technology without permission but also  for inducing third party’s-like your credit union-to violate the patent  by buying the ATM.

The Issue  debated in Commil USA, LLC v. Cisco Sys., Inc., No. 13-896, 2015 WL 2456617,  (U.S. May 26, 2015)( http://www.supremecourt.gov/opinions/14pdf/13-896_l53m.pdf)  was whether a company could defend itself against inducement claims by proving that it had a good faith belief that it was not violating a patent.  The Court said no.  This means that, so long as my fictitious  ATM maker was using technology that violated a patent,  it  violated the law by inducing your credit union to buy its ATM regardless of how earnestly it believed it  was doing nothing wrong.

continue reading »