Thursday, September 8, 2011

Will the term “patent troll” really be allowed in court?

Probably not. In yesterday’s edition of the Docket Report, the lead story focused on a motion to strike the phrase “patent troll” from plaintiff’s complaint in Highland Plastics, Inc. v. Sorensen Research & Development Trust, 2-11-cv-02246 (CACD August 17, 2011, Order) (Otero, J.). In denying the motion, the court explained that the ”term [is] commonly used and understood in patent litigation and is not so pejorative as to make its use improper.”

That may be true in the context of striking a pleading, but is it true overall? How about at trial?

These are the types of questions Docket Navigator was designed to answer. How have judges ruled on specific types of motions, based on specific types of arguments and evidence? Are certain arguments or positions more likely to succeed at one point in the litigation than another? Making the right call can save your client’s resources and result in success on the merits. The wrong call can lead to the opposite consequences. Here’s how Docket Navigator can help. Check out this video to see how we did the search.

First, we searched Docket Navigator for (i) orders on motions to strike pleadings (or portions thereof) where (ii) the basis for the motion was FRCP 12(f). (Rule 12(f) empowers a court to strike “redundant, immaterial, impertinent, or scandalous matter.”) Not counting the Highland Plastics case discussed above, our search returned seven results. Six of the seven were denied. The seventh was a sua sponte order prompted by a pleading that was “extraordinarily turgid (almost as though its counsel was seeking to make the pleading itself the subject of a patent application).” In addition to the statements in the Highland Plastics case (use of the term “patent troll” and allegations that defendant “ranks sixth as the most patent litigious entity”), courts have declined to strike pleadings that contain:

- “Confidential communications” allegedly covered by FRE 408;
- “[C]haracterizations of [plaintiff's] subsidiaries as patent litigation vehicles”;
- “[P]re-filing communications” between the parties;
- Allegations that “plaintiff’s founder/president had founded defendant’s predecessor, invented defendant’s patents-at-issue, and signed a non-disclosure agreement when he resigned from that company”;
- Allegations of “alter ego liability, the Defendants’ learning of [plaintiff] and its patented technology, as well as [plaintiff's] allegations of Defendants’ attempt to ‘kill’ [it]“; and
- References to “three undisclosed items” that had previously been deemed insufficient to support an inequitable conduct claim.

From these rulings we can conclude that FRCP 12(f) sets a very high bar for striking pleadings or portions of pleadings. In fact, one might conclude that the only material egregious enough to clear the bar would also prompt a sua sponte order. At least that has been the track record so far.

Second, we changed our search criteria to focus on motions in limine instead of motions to strike. Specifically, we searched Docket Navigator for (i) orders on motions in limine directed to statements by counsel, where (ii) the order contains the term “troll.” Once again, we received seven results. But this time, the motions were uniformly granted. Indeed, in six of the seven motions, the parties stipulated that the term could not be used at trial. We did not discover a single case where a court deemed it proper to use the term “patent troll” at trial.

The message here seems clear: context is everything. Challenging the use of “patent troll” and other potentially derogatory terms at the pleading stage has nearly always failed. But challenging those same statements in a motion in limine has uniformly succeeded. So, while the term might stay part of the pleadings it is unlikely to be used at trial.

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