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Over the last several decades, trial lawyers have found increasingly “creative” ways to use the legal system to enable themselves to cart off huge portions of legal settlements for themselves. Some of these high profile abuses made headline news, such as the class action exploitations of the 1990s. But actually being required to take a case to court does come with expense, and wanting to enhance their riches trial lawyers have found some new legal system weaknesses to exploit for less out of pocket expense.
Partnered with patent trolls (Few of the current definitions or usages of the term are helpful as many of them disparage some otherwise enterprising individuals or companies. That said, there are bad actors who bring, or threaten to bring, abusive, frivolous litigation that is designed to leach onto innovation and drain its value), trial lawyers, in those cases where the trial lawyer is not also the troll, are exploiting weaknesses in the patent system to enrich themselves while draining away value from creators and inventors.
The typical operation begins with an abusive demand letter, that is a written demand for the target to pay royalties for presumably violating a patent. Often such demands are frivolous, such as with the recent shake down letter objecting to restaurant menus being posted online, but the demand for cash is very real as is the threatening language. This process requires little in the way of cost or work, just a moment to change the name and address and drop the form letter in the mail. Because the demand is often kept relatively low, settlement is often thought a better financial option, especially for small businesses and sole proprietorships. The intent is the shakedown, not justice. To have a strong patent system that protects intellectual property, means that these abuses must be made to stop.
As Carry Lukas with the Independent Womens Forum has written, “This isn’t how things are supposed to work. And it isn’t just multibillion dollar companies that are harmed by legal abuses, but small businesses that are the least likely to be able to afford the payments much less a protracted legal battle. In fact, we all end up facing higher prices as a result of this economic drain on legitimate companies.
We need legislation to prevent this obvious abuse of the legal system. The good news is that there are proposals out there to make changes, such as requiring that lawsuits are filed in districts with some relationship to the issue at hand. That-along with other reforms to require that patent trolls are truthful in their communications with businesses and to facilitate the dismissal of frivolous cases-would be a much needed dose of common sense to our legal system. It would also take pressure off of legitimate companies and entrepreneurs trying to build businesses and create jobs, could bring down prices a bit for the rest of us, and make our system more just.”
Trial lawyers have chipped away at various pieces of our country in the past. Now, they are after innovation. The threat is real, especially when a troll is at their side.