If trolls don’t face consequences for asserting invalid software patents, then they will continue to shake down productive companies. That is why EFF has filed an amicus brief [PDF] urging the court to uphold fee awards against patent trolls (and their lawyers) when they assert software patents that are clearly invalid under the Supreme Court’s decision in Alice v. CLS Bank (which held that an abstract idea is not eligible for a patent simply because it has been implemented on a generic computer). Our brief explains that the most abusive patent trolling tends to come from trolls that own abstract software patents.
This case began when a patent troll called AlphaCap Ventures sued Gust, a company that connects startups with investors around the world. Claiming its patent covered various forms of online equity financing, AlphaCap Ventures filed suit against ten different crowdfunding platforms. Most of the defendants settled quickly. (In many patent troll suits, even when the patent is very weak, the high cost of litigation pressures defendants to settle.) But Gust fought back. Faced with a defendant willing to actually challenge its patent, AlphaCap Ventures eventually dismissed its claim. The district court ruled that AlphaCap Ventures’ attorneys had litigated unreasonably and ordered them to pay Gust’s attorneys’ fees. The lawyers then appealed.