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Highmark case may redefine patent infringement law

| Wednesday, Jan. 1, 2014, 11:39 p.m.

Two cases pending before the Supreme Court could give federal trial judges more discretion in deciding when a company sued for patent infringement can recover their legal costs from the person or company that sued them, according to a Mt. Lebanon lawyer who is a national expert in intellectual property law.

In one of the Supreme Court cases, Highmark Inc. is asking the high court to reinstate a Texas federal trial judge's ruling that Allcare Health Management System Inc. of Fort Worth, Texas, made patent infringement claims in bad faith and should have to pay Highmark about $5.2 million in legal fees.

In the other case, a fitness equipment manufacturer wants the Supreme Court to give federal trial judges more flexibility in the criteria they use to award legal costs to defendants who defeat a patent infringement claim. The company is seeking $1.3 million in legal fees for successfully defending itself.

Mt. Lebanon attorney Robert Lindefjeld, chairman of the American Bar Association's Intellectual Property Law section, says a ruling for the appellants in both cases could have a significant impact on businesses.

“It will have the practical effect of reducing the number of patent infringement lawsuits,” he told the Tribune-Review.

For companies that frequently defend against such lawsuits, that would be good news. For small companies who have legitimate patent infringement claims against large companies, the rulings will raise the stakes if they decided to enforce their rights, he said.

“It cuts both ways,” Lindefjeld says.

The rise in patent lawsuits has caught Congress' attention. Congress passed the America Invents Act in 2011 in an attempt to curb frivolous patent claims.

In December, the House passed a measure that — if it becomes law — would make several changes, including making it easier for the winner to collect attorney fees in a lawsuit.

Lindefjeld says the ABA hasn't taken a position on the legislation yet. Personally, he says he thinks the law will make legitimate patent lawsuits more expensive in an attempt to weed out a relatively small number of frivolous lawsuits.

“The patent system is not on fire,” he says.

The Supreme Court cases, on the other hand, would make a more rational adjustment by leaving the awarding of attorney fees to trial judges familiar with the case, Lindefjeld says.

“The trial judge is right there, sees what is going on and can look the people in the eye,” he says.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.

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