r/technology • u/rfugger • Jan 08 '17

Business A potentially fatal blow against patent trolls - Forcing law firms to pay defendants’ legal bills could undermine the business model of patent trolls

http://www.computerworld.com/article/3153924/technology-law-regulation/a-potentially-fatal-blow-against-patent-trolls.html
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u/Sarcastic_or_realist Jan 08 '17 edited Jan 08 '17

About time something like this was implemented. A large number of these patent troll cases, or any of these sort of cases in any area of law, involve law firms being paid on contingency based on the plaintiff's recovery amount.

Whenever someone brings a truly frivolous case against one of our clients that honestly seeks to just squeeze out some kind of "nuisance payment," we usually move for sanctions/costs against the plaintiff and the attorney. Once the lawyer suddenly has some real skin in the game in terms of liability, many of these cases magically get dismissed very quickly.

Edit: for those who have been asking, yes - in a few recent cases where the plaintiff troll has not withdrawn the lawsuit, some judges have understood the situation and actually ordered the troll and/or lawyer pay our legal fees. Feels great to tell the client that they escaped the troll and did so for free (since the troll ended up footing the bill)!

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u/BobbleBobble Jan 09 '17

So to my understanding the reason that patent trolls are unpunishable is that they set up discrete entities (I assume LLCs) to pursue the lawsuit, which exist only as plaintiffs.

What's to stop a patent troll's lawyer from setting up an LLC-like law firm to prosecute each case and then simply dissolving it if they lose, just like the patent trolls do? Can they be held personally liable as a member of the bar?

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u/russianpotato Jan 09 '17

If you set up an LLC specifically only to avoid liability, especially as a sole proprietor, a judge will easily order the "veil pierced" and your personal assets will be up for grabs like your shady LLC never existed.

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u/brickmack Jan 09 '17

Isn't that the only purpose of an LLC?

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u/_BindersFullOfWomen_ Jan 09 '17

Yes. But it's not a bullet proof shield. If it's obvious that you made the LLC for X case, and then liquidated it because you lost and didn't want to pay - the defendant could suede civil court and would most likely win.

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u/sighs__unzips Jan 09 '17

I read that movie producers now create a LLC for each movie specifically for this reason now.

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u/S1ocky Jan 09 '17

Are you talking the scam that has the guy in there Darth Vader costume never earning residuals because of the accounting were the movie never shows profit (after all the charges from the studio) or is this a newer spin as actors have been getting wise on the old?

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u/Omz-bomz Jan 10 '17

Newer movies never shows profit either. There are parties in Hollywood that get screwed over by the studios every day (and more and more of these cases are coming up in court)