The recent CSIRO v. Buffalo Technology, Inc. case just might have been the trump card for which a traditional patent troll was waiting so that it could finally visit the promised land of a permanent injunction. 2007 U.S. Dist. LEXIS 43832 (E.D. Tex. Jun. 15, 2007). Unfortunately for the trolls, however, the impact of this opinion will not be as far reaching and applicable to their business model as they might hope.
The commercial value of a patent derives from the fact that it confers upon its owner a legally enforceable exclusionary right, i.e., the right to exclude others from operating within the product or process space defined by the patent claims. A patent that current and prospective infringers know will never be asserted against them has zero economic value. Thus, a patent implicitly carries with it the potentiality, i.e., the threat, of assertion, and the value of the patent ultimately reflects the collective commercial risk that potential infringement litigation targets assign to that threat. On the other hand, patent assertion as a monetization model implies something more. Typically, the assertion entity has no other business and thus is not vulnerable to counterclaims for infringement of its targets' patents. It says to the target, 'We have a patent that covers what you are doing. Pay us a royalty or we will sue you.' The assertion model is essentially a zero-sum game, and the pejorative moniker 'patent trolls' has come into vogue as a way to describe those who exploit this model, although there is considerable controversy surrounding what attributes distinguish a troll from a legitimate patent enforcer. The value proposition for the troll's target is either to pay for a nonexclusive license (or covenant not to sue), or to contest infringement and/or validity of the patent in court and risk a damages award in the form of a reasonable royalty (which may be trebled for willful infringement) — or worse, the possibility of an injunction.
A recent case of interest.
Everything in this issue in an easy-to-read format.
In Rosario v. Diagonal Realty, LLC (infra), the Court of Appeals addressed an issue that has perplexed New York courts since Congress amended the section 8 housing program almost ten years ago: Can a landlord terminate its participation in the program at the expiration of a rent-stabilized lease? The Court of Appeals held that the rent stabilization code prohibits termination, and that federal law does not pre-empt the code.
Recent rulings of interest to you and your practice.
Is there a trend in child support modification matters? The cases we looked at in last month's newsletter granting an upward modification of child support appear clearly to be the exceptional ones.
