Tech Giants Ask E.U. for 'Patent Troll' Shield ; Plan for Unified Courts Raises Industry Fears of More Infringement Suits

Article excerpt

After spending hundreds of millions of dollars in the United States to defend against patent-infringement lawsuits, the companies worry that Europe could soon become a battleground for similar conflicts.

The technology industry is expanding its fight against patent trolls to Europe.

In the United States, technology companies like Google, Apple and Microsoft have spent years and hundreds of millions of dollars to defend patent-infringement lawsuits by companies that make a business of buying technology patents primarily so they can sue software companies and makers of products like smartphones. Now they worry that Europe could soon become a broad battleground for similar court conflicts.

In a letter to be sent to European officials on Thursday, 14 companies outlined their concerns about a coming change that will give most of Europe a unified patent court system for the first time. So far, the technology industry has generally supported this pan-European effort as a better way to protect intellectual property than the current thicket of country-by-country rules.

But in looking at the details of the new approach, scheduled to begin in 2015, the companies now fear that the new system could be vulnerable to what they call patent assertion entities, less politely known as patent trolls, which make a business of filing patent-infringement suits. Such companies say they play a valuable role in protecting innovators, but many corporations see the suits as frivolous and damaging. In the United States, the Federal Trade Commission has a patent-troll investigation under way.

In interviews, executives of some of the companies that sent the letter said one of their concerns was that court-shopping by patent trolls in some smaller European countries could turn parts of the Continent into the equivalent of the Eastern District of Texas. That federal court jurisdiction has become an American capital of patent litigation known for sympathetic juries and speedily moving cases.

In one notable case there, in 2010, a jury awarded an obscure company more than $600 million in a lawsuit against Apple related to its operating systems, although the award was eventually overturned by the trial judge, and by the United States Supreme Court this year. A host of companies also had to fend off a suit in East Texas filed by a company that claimed to have invented the "interactive Web."

"Unprincipled plaintiffs would be able to extract substantial royalties" through settlements or verdicts "from European and other companies based on low-quality and potentially invalid patents," the letter said.

The letter was signed by 14 corporations, including Apple, BlackBerry, Cisco, Google, Hewlett-Packard, Intel, Microsoft, Samsung and Yahoo. It was also signed by some big European companies -- like Adidas, Deutsche Telekom and Telecom Italia -- and was provided to The New York Times by the companies.

Top officials drafting the rules of the new court system said they were listening to the industry's concerns -- which is perhaps no surprise, since several people involved in the drafting process work for law practices or lobbying firms that count such companies as clients.

Some officials suggested that the concerns were overblown.

"I don't see it as a major problem at all," said Kevin Mooney, a British patent lawyer who is the chairman of a drafting committee that is advising a panel set up to oversee the creation of the court system. "We have one set of procedures for all these courts," he said. "It would be nonsense if we allowed one court, Romania, say, to become the Eastern District of Texas. …

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