Utah attorneys representing Overstock.com claim moral victory

Ever needed a new comforter, coffee pot, laptop, or even an engagement ring but haven’t felt like leaving the house? You’ve probably found your way to Overstock.com, one of the world’s largest discount online shopping retailers proffering goods in every category for every occasion. Well, Overstock.com recently issued a statement that claimed a moral victory over unethical “patent trolls” when the plaintiffs dropped their cases against the company, Legal News Line reports here. The company’s Utah attorneys were successful in getting the patent trolls to walk away without any settlement or money paid.

This type of litigation exists in an interesting intersection of legal rights, Utah attorneys like Gregory W. Schulz note. Technically filed as patent infringement lawsuits by “patent trolls,” cases like the ones against Overstock.com are often quickly settled and brushed away, but this Utah company wasn’t having it. “In abusive lawsuits, we spend our legal budget in defense, not on unjust settlements,” the senior vice president reported.

What would make these settlements “unjust,” and aren’t we interested in making sure intellectual property rights don’t get trampled? The answers to these questions lie in how we know what “patent trolls” are. Generally speaking, a non-practicing entity or “patent assertion entity” buys up groups of patents without an intent to market or develop a product. Then that entity targets businesses with lawsuits alleging infringement of the patents it has purchased. This isn’t the good fight of an inventor protecting the intellectual property rights of a lifetime of work—it’s highly unethical and takes advantage of most large companies’ desire to settle these suits quickly, winning these “patent trolls” gobs of money for doing, well, nothing.

The Utah attorneys representing Salt Lake City’s Overstock.com weren’t having it. The company’s executive vice chairman spoke about the “shortsightedness” of settling lawsuits “because it’s much cheaper than fighting” them, saying, “The best practice is never to settle frivolous troll suits at all.” So Overstock.com fought the plaintiffs: Eclipse IP LLC and Execware LLC had had enough of the Utah attorneys’ defensive maneuvers in court and walked away empty-handed.

But how does that help other businesses in the future? Business attorneys like Schulz believe that such moral victories give weight to legislation in Congress for patent litigation reform. Such reform bills stipulate that minimum disclosures be required in demand letters sent by trolls to businesses. Such minimum disclosures would expose “patent trolls” for deceptive demand letters and allow businesses to better separate out legitimate patent infringements, such as those outlined by inventors who have justifiably purchased the property rights to their work.

Currently there are some measures pending: the Transparency in Assertion of Patents Act (dealing with demand letters); the Innovation Act; and the Patent Transparency and Improvements Act. Each of the bills has garnered varying levels of support. And while it remains to be seen which, if any, will pass both House and Senate, attorneys like those representing Overstock.com comment that “there is hope that the era of abusive patent troll litigation is nearing its end.”