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Big tech lawyers are gaining momentum. A Delaware judge recently filed a lengthy memo in support of Big Tech’s years-long efforts to trample America’s justice system and kill smaller entrepreneurs.
Delaware U.S. District Court Chief Justice Colm Connolly chewed through hooks, lines, and sinkers about the ludicrous argument that the biggest and richest tech companies have been peddling for decades.
Connolly attacks the practice of “third-party litigation financing.” This source of funding will allow lenders and investors to help take litigation on behalf of patent owners seeking to hold Big Tech liable for infringement.
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Last April, Connolly issued a standing order requiring litigants to disclose third-party funding. But who is funding the lawsuit has absolutely nothing to do with whether infringement has occurred. This disclosure request is at best a distraction and a sideshow, exactly what the shady tech giant defendants want.
Nevertheless, Connolly doubled the April order in a late November memo. This is a self-justifying 78-page screed, arguing that his “intrinsic power”, as opposed to federal statutory authority, justifies his disclosure request.
Judges are choosing to ignore the fact that third-party funding is a normal part of our legal system. It’s the only way.
Lawsuits are time-consuming and expensive, and most individuals and small businesses don’t have the millions of dollars needed to fight Big Tech (Google, its sister companies YouTube, and Apple). As such, external funding, sometimes in conjunction with attorney contingency fee arrangements, has become very common. Little justice would be served if only the richest people and corporations could go to court.But that’s exactly what Big Tech wants.
To that end, Big Tech and its allies have launched a ferocious campaign against third-party funding. For example, the U.S. Chamber of Commerce argued in his November report that “foreign governments can fund lawsuits to advance their strategic interests against the United States.”
The Chamber of Commerce did not provide evidence that a foreign government actually used the U.S. court system in this manner.
The best way to check the rise of China and other geopolitical rivals is to beat them. But if America’s largest and most established tech companies succeed in using the courts to bring down the small entrepreneurs responsible for most of America’s recent breakthroughs, it won’t be possible. will be
Ironically, today’s big companies would not have been successful in their early days without strong intellectual property (IP) protection.
Strong intellectual property laws are the foundation of the US economy. If one company steals another company’s intellectual property, the latter has the right to sue. But as once-innovative companies grew to scale, they hired lobbyists and lawyers to push for selfish legal reforms and court outcomes.
These rogue and legal ploys are successful in turning in favor of robbers and greedy corporations.
In the early 2000s, a jury found that eBay violated a patent held by MercExchange. In 2006, the Supreme Court ruled “no” on the question of whether to grant a ban. This sent the message that at least he was not considering one means of punishing patent thieves.
Big Tech scored another coup when a 2011 law created a new examination process within the executive branch, making it quicker and cheaper for plaintiffs to challenge the validity of existing patents.
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Around the same time, big tech companies adopted a strategy known as “efficient compromise.” They appropriate another company’s invention, wait for litigation, then fight in court, relying on their typically huge advantage in resources to torment small patent holders.
Litigation is time consuming and expensive, and most individuals and small businesses do not have the millions of dollars needed to fight Big Tech. Together, they have become very common. Little justice would be served if only the richest people and corporations could go to court.But that’s exactly what Big Tech wants.
As part of this process, they use their examination process to open a second front to challenge the validity of patents owned by companies that have already claimed infringement. For years, review boards have allowed one challenge after another to the same patent. Even if the board ultimately endorses the patent as valid, the process is designed to favor the rich.
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A small inventor who sees his patented technology stolen won’t stand a chance in court if he runs out of cash. Hence the recent increase in litigation funding in IP cases.
Don’t be surprised to see giants trying to catch up with younger, rickety innovators. But it’s sad that a federal judge would rather play for his team than fight for fairness.