Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters • Hacker News Board

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#21

Post by derekp7 » Fri, Apr 10, 2015, 9:39 PM UTC

When a patent gets overturned, can those who already paid license royalties typically sue the patent holder to get their money back? (I know that the entity can file bankruptcy, so the chance of getting money is slim). Or do the license agreements typically include a clause that money is not refundable if the patent is invalidated?

Or, even worse, do license agreements typically include language that says the licensee agrees to continue to pay royalties even if the patent is later found to be invalid? I can see someone being strong armed into signing an agreement like that.

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#22

Post by danray » Fri, Apr 10, 2015, 9:46 PM UTC

derekp7 wrote: post #21

When a patent gets overturned, can those who already paid license royalties typically sue the patent holder to get their money back? (I know that the entity can file bankruptcy, so the chance of getting money is slim). Or do the license agreements typically include a clause that money is not refundable if the patent is invalidated? Or, even worse, do license agreements typically include language that says the license…

A good license would probably say royalties are nonrefundable, and this makes sense -- if you threaten to sue me for $1 million and I settle for $25K, I've essentially paid to make the suit go away. So long as you don't sue me, I've got the benefit I bargained for. If it later turns out that the suit wouldn't have been valid, great, but it doesn't matter to me since I've already bought peace.

To your other question, though, no, a license that tried to force continued payments despite invalidation would be very atypical. In fact, to do so is currently per se unenforceable. (Note, though, that the Supreme Court might allow for some gray area in this rule in the coming months).

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#23

Post by spacemanmatt » Fri, Apr 10, 2015, 9:46 PM UTC

raverbashing wrote: post #15

gesman wrote: post #7

...invalidated by USPTO though.

That's like saying "a judge acquitted him" without considering the efforts of the defence.

Does it matter if you get the right legal result?

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#24

Post by matt4077 » Fri, Apr 10, 2015, 9:56 PM UTC

derekp7 wrote: post #21

When a patent gets overturned, can those who already paid license royalties typically sue the patent holder to get their money back? (I know that the entity can file bankruptcy, so the chance of getting money is slim). Or do the license agreements typically include a clause that money is not refundable if the patent is invalidated? Or, even worse, do license agreements typically include language that says the license…

It's only tangentially related, but it's a good story:

Apparently at some point an American producer licensed the patent for a mouthwash for a percentage of sale – I think it was Listerine, but can't find this story on Wikipedia right now. A decade or two later, the patent ran out. Anybody could now copy the formula without royalties. Except: the original licensor sued his american licensee for continued royalty payments. They won, because the initial contract never specified an end to the arrangement when the patent expired.

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#25

Post by tytso » Fri, Apr 10, 2015, 9:59 PM UTC

jkestner wrote: post #17

Chirael wrote: post #13

Nice work, EFF! Our membership dues at work :)

It is refreshing to get this direct of an effect for my money. This must be how lobbyists feel.

Or perhaps more accurately, this must be how 1 percenters who pay $$$ to lobbyists to influence/purchase politicians feel....

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#26

Post by CPLX » Fri, Apr 10, 2015, 10:00 PM UTC

danray wrote: post #22

derekp7 wrote: post #21

When a patent gets overturned, can those who already paid license royalties typically sue the patent holder to get their money back? (I know that the entity can file bankruptcy, so the chance of getting money is slim). Or do the license agreements typically include a clause that money is not refundable if the patent is invalidated? Or, even worse, do license agreements typically include language that says the license…

A good license would probably say royalties are nonrefundable, and this makes sense -- if you threaten to sue me for $1 million and I settle for $25K, I've essentially paid to make the suit go away. So long as you don't sue me, I've got the benefit I bargained for. If it later turns out that the suit wouldn't have been valid, great, but it doesn't matter to me since I've already bought peace. To your other question,…

I am not sure if you're correct. In the This American Life episode on patents they interview someone discussing this precise issue, who is still on the hook for licensing fees despite someone else subsequently winning a patent action against the counterparty.

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#27

Post by rosser » Fri, Apr 10, 2015, 10:04 PM UTC

gesman wrote: post #7

...invalidated by USPTO though.

Uh, who else is supposed to invalidate them?

I mean, if I could, I can think of a few I'd go after before finishing this very sentence. Unfortunately, it turns out, I don't have that authority.

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#28

Post by billyvg » Fri, Apr 10, 2015, 10:05 PM UTC

sbov wrote: post #18

Any figures on how much this invalid patent costed people?

We'll probably never know, most people that settle with patent trolls have confidentiality agreements

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#29

Post by jacquesm » Fri, Apr 10, 2015, 10:09 PM UTC

Excellent. Now we could use another one to get rid of all those stupid streaming patents that are abused time and again.

Re: Ruling from USPTO Invalidates All Claims Used to Threaten Podcasters

#30

Post by Dylan16807 » Fri, Apr 10, 2015, 10:19 PM UTC

CPLX wrote: post #26

danray wrote: post #22

Earlier quoted context omitted.

A good license would probably say royalties are nonrefundable, and this makes sense -- if you threaten to sue me for $1 million and I settle for $25K, I've essentially paid to make the suit go away. So long as you don't sue me, I've got the benefit I bargained for. If it later turns out that the suit wouldn't have been valid, great, but it doesn't matter to me since I've already bought peace. To your other question,…

I am not sure if you're correct. In the This American Life episode on patents they interview someone discussing this precise issue, who is still on the hook for licensing fees despite someone else subsequently winning a patent action against the counterparty.

But what are they going to sue based on? If you have a contract of fees for patent use, and it becomes fees for nothing, it's no longer a contract, by definition.

If the only remaining thing is a fee to not sue for something they objectively have no rights to, that doesn't sounds like a proper exchange to me. But of course I'm not a lawyer.

Did the other person win a case about their use, or did they actually get the patent thrown out? Could make a big difference when it comes to others.