[rarw]

As a lawyer I'm always concerned about changes designed to make it harder to sue someone. You almost always end up with unintended consequences. Take for example the heightened pleading standard. This standard has been used with other case types in which the allegations are considered dangerous to one's reputation, like fraud or discrimination. In many situations, people with legitimate claims have been unable to overcome the heightened pleading standard, not because their claim is weak, but because the evidence required to plead the claim is difficult to come by.

Many of the changes suggested by the article can already be accomplished using existing procedural devices. The only provision I see as having any teeth is the one that deals with fee shifting. Fee shifting provisons are a big deal as recoving attorneys fees is very rare in the American legal system. Generally fee shifting provisions allow the winner to collect legal fees even if nominal damages (e.g. $1) are awarded. This greatly increases the risk of trolling since any loss, no matter how small, could equal hundreds or thousands (probably millions) of dollars in legal fees owed to the other side.

[gbhn]

Being careful in reforms is good, but I think the heightened pleading concern is not that big an issue here. The plaintiff is looking at their own patent and saying "this thing you did violated this part." If they don't know enough to say that, they shouldn't be in court -- either the patent is so vague they can't figure out which piece of it you violated, or how you did so, or they know, but don't want to say because uncertainty is a much stronger extortion position. Either way, getting rid of this is a good step, and an appropriate one to the subject matter.

[GeneralMayhem]

> not because their claim is weak, but because the evidence required to plead the claim is difficult to come by

Could you provide an example? As a layman, I'm having trouble imagining how you could have a strong case without basic information such as what exactly the tort was.

[rayiner]

Winning a civil litigation requires proving by a preponderance of the evidence that someone wronged you. The problem arises that in many cases, the defendant holds the cards when it comes to evidence showing wrongdoing.

The examples are replete. Consider the recent financial scandals. You may sincerely believe that you were defrauded by a bank, but to prove fraud you need to show fraudulent intent. I.e. you need e-mails between the banks' employees saying "hey, we're going to screw this guy over." Well you can't get those e-mails until you initiate litigation, and under loser pays you're on the hook if, e.g., the bankers were smart and did their scheming by passing paper notes.

Or say you have a products liability litigation. You think a car company skimped on some part knowing it would compromise safety. Who has the internal testing data that might prove that claim?

Or say you have an environmental litigation. You think someone is dumping pollutants in your river and making people sick. Who has the internal logs that might prove that?

One of the purposes of litigation is investigation--getting evidence that may prove or disprove your claim. In the American framework, if someone has a good faith belief that someone did something wrong, and can allege at least something raising that above bare conjecture, they are entitled to litigate to uncover sufficient facts to make their claim.

[GeneralMayhem]

I'm not saying that those are just situations, but in all the examples you listed, the plaintiff didn't have a strong case anyway, so filtering them out at the claims stage wouldn't change anything.

[rayiner]

People do win those cases. Those smoking gun emails and internal tests do exist, and plaintiffs get them in discovery. BP didn't agree to pay out twenty billion to shield itself from litigation in the deepwater horizon disaster because they thought nobody would ever win those cases.

But if you filter those suits out at the pleading stage, those plaintiffs never get discovery, which takes their odds from low to nil.

[walid]

You're missing the point. Patents are the scope of these laws, not general legal practice.

[rayiner]

Right, but in the above few posts we're talking about how heightened pleading standards can get you into trouble.

And as a general point, special cases for special areas of law are hacks. The problem with patents isn't the pleading standards. It's not the lack of loser pays. It's that patents are very amorphous, poorly defined property rights. Imagine how much litigation there would be if your property right in your yard couldn't be simply and unambiguously determined just by looking or simple surveying. That's basically the problem with patents.

[rarw]

It actually happens all the time. The heightened pleading standard comes from two cases - Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) and Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009). As the Twombly court described it - The "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true." What this ends up requiring is that the plaintiff state specific factual allegations as to what the defendant is actually doing wrong. This sounds like a pretty good idea but in many cases is much more difficult than you'd think. Usually the difficultly arises because the information that supports your complaint, i.e. what the defendant is doing wrong, is totally within their control. You, as a plaintiff bringing an action, do not have access to this information until discovery starts, which is only after the complaint and an answer have been filed.

Think of it this way. You have a patent. You're pretty sure, but not positive, someone is infringing on it. Without the ability to inspect the supposed infringer's facilities, how do you plead with particularity factual allegations sufficient to support an infringment claim? If the infringment is blatent, sure this is easy. But in more nuanced cases (I can't think of a technical exmaple) it is possible to end up in a siuation where actual infringment is occuring but because of an inability to access the right information there is not enough available to sufficiently plead a claim.

[walid]

> What this ends up requiring is that the plaintiff state specific factual allegations as to what the defendant is actually doing wrong.

I'm not a lawyer but in the case of patent infringement I expect the plaintiff to be able to show said infringement. It is a technical matter that can be deduced from the product by studying its functionality. The defendant practically cannot hide infringement.

[GeneralMayhem]

Fabrication processes can be patented. I can imagine examples that would be hard to definitively prove based on the final output three stages farther down the assembly line.

[walid]

True, but that is the same reasoning that the law goes by when it is required to prove guilt rather than proving innocence. The legal system many times lets the bad guy walk to make sure that an innocent is not accidentally convicted or over burden by having to show innocence. Just because something criminal can happen shouldn't be enough to warrant a lawsuit. There should be proof of criminality, infringement, whatever. Otherwise the law will simply be used as a harassment tool as is being done with patents.

[rarw]

Sure in some cases. Don't forget that patents cover a diverse array of innovations. What exactly is being infringed upon is not always that obvious.

[ScottBurson]

The draft does contain the words "unless the information is not reasonable [sic] accessible".

There is a balance to be struck here, I agree, but in one example [0] it cost a troll an estimated $450 to file a completely baseless lawsuit which would have cost the defendant almost $200k to have dismissed ("would have", but didn't, only because the attorney worked pro bono). That doesn't seem to me to indicate that the balance is currently struck at about the right place.

It seems to me that before the court allows the dogs of discovery to be loosed upon the defendant, it is more than fair to require the plaintiff to be specific about what claims it is alleging infringment of and what the defendant is doing that constitutes infringement.

[0] http://www.techdirt.com/articles/20130814/02270724171/massiv...

[rarw]

Just wanted to note that there are frivolous litigation rules that allow for sanctions against the party bringing a bogus suit and allow the target of the suit to recover attorneys fees. It would be standard practice to include within the motion to dismiss a section also moving for these remedies. Thus it is likley that the cost to fight back against the troll would not have been 200k - with or without the pro bono.

[lostinpoetics]

> In many situations, people with legitimate claims have been unable to overcome the heightened pleading standard, not because their claim is weak, but because the evidence required to plead the claim is difficult to come by.

the "unless the information is not reasonable [sic] accessible" really takes a lot of the teeth out of this though

[hotpockets]

Will fee shifting make it too risky for small companies to protect their IP?

[chum]

Some have proposed a sort of patent "small claims" court to address these issues:

http://www.uspto.gov/ip/global/patents/comments/patent_small...

[rarw]

Probably not. Enforcing a patent is expensive (as most litigation is). If this law penalized trolls who filed worthless claims but rewarded those who were legitimately being infringed on then if anything it would make it less risky.

[hotpockets]

It sounds like the "expected" return on litigation may be positive for small legitimate startups, so that over the long run, it might be expected to work our well for small startups. However, each individual small company may not want to risk their survival on hard-to-predict judicial idiosyncrasies.

[rarw]

Sure, there are always risks with litigation but in general it is not as unpredictable as outsiders think.

[EGreg]

Could you provide some examples? I too would like to understand how a company can find it hard to find out which of their patents, for example, is being infringed -- and still have a legitimate case.

[unavoidable]

This is actually very common in industry, especially with respect to manufacturing processes. For example, let's say you have a (presumably valid) patent on an improved manufacturing method for a drug. Maybe it's a really efficient way to mix things into pill form, giving you a cost advantage in the market. But you don't have a patent on the actual drug. If someone else makes the drug using your process, how would you actually find out?

There may be a number of ways to make a product, but only one of the ways of making it is infringing. It's not like companies go around telling people the secrets of their manufacturing plant. Many manufacturing plants, especially in pharma and also in tech, have high security.

And even if you could find out (let's say by corporate espionage) - that evidence may not always be admissible (or reliable) in court.

[walid]

I think you're getting it wrong. This doesn't make "Heightened Pleading" difficult. The whole idea is to say the defendant is infringing on such and such in their manufacturing process. It seems to me that this is the extent of Heightened Pleading.

[EGreg]

In your example, if you have a presumably valid patent and you file a patent suit, then you can readily name the patent that is being infringed.

The opposite is the famous example of lawyers from IBM basically extorting money saying "do you want us to go back to Armonk and find some patents which you DO infringe?" The implication is "pay us now and we won't make life harder for you using the legal system, because we think we can". That is not justice, nor is it in anybody's interest except the holders of many patents.

[rarw]

That's not really how things work. Not only is that sanctionable but extremely unethical and would result in diciplinary action if reported.

[EGreg]

How would they prove that this "threat" took place unless they recorded every conversation?

The fact is that this extreme example is just an example. Lots of companies just send a bunch of intimidating letters to people and hope it sticks - because it's free!

Eg http://www.audioholics.com/news/blue-jeans-strikes-back

[barry-cotter]

I'm sorry but defending the ethics of lawyers outside of a majority legal environment is a losing move.