The debate over patent trolls is dividing the IP bar.
In one of the most overt examples of choosing sides, litigation firm Howrey provocatively proclaims in a new brochure for clients that it absolutely won’t represent trolls � and criticizes firms that do.
“As a firm policy, Howrey does not litigate for ‘patent trolls,’” the page blares underneath a picture of a crossed-out cartoon troll. “Why support firms that are helping perpetuate this scourge on legitimate businesses everywhere?”
Companies that hold patents for the sole purpose of licensing � and suing � have raised the ire of big business and been derogatorily labeled as trolls. Historically, big law firms shied away from representing patent holding companies � which often sue entire industries with a single set of patents � because of the potential conflict with important clients.
But as these IP outfits have become financially successful, some big defense firms have taken on cases. Firms such as Fish & Richardson and Cooley Godward Kronish represent some of the more high-profile patent holding companies. Fish works for Rembrandt Technologies and Cooley represents Acacia Technologies Group.
Howrey used to represent some IP holding companies but decided late last year that it was time to pick sides, said Henry Bunsow, an IP veteran who heads the firm’s Northern California offices.
“It became apparent that we were going to be running into some conflicts down the road,” Bunsow said. “We decided it was madness to work both sides of the street.”
Howrey isn’t the only firm to swear off patent holding companies � although few broadcast it in the same way. Charlene Morrow, head of IP litigation at Fenwick & West, said her firm steered away from representing such companies a few years ago. Large technology clients, she said, had begun to note that they’d prefer that Fenwick didn’t help holding companies do their business.
Other big firms say it’s not a problem to do a few well-chosen cases for holding companies. Michael Rhodes, the head of Cooley’s litigation department, said his firm takes the occasional case, but only if there isn’t a conflict with a company or industry that Cooley represents.
Rhodes said that’s what happened when the firm decided to represent an Acacia subsidiary that is suing more than a dozen blue-chip tech companies, from Dell to Hewlett-Packard, in the Eastern District of Texas, for allegedly infringing patents related to controlling printers remotely ( International Printer Corp. v. Brother International Corp et al, 07-0036).
Even though the head of Cooley’s IP practice told The Recorder in 2006 that he wanted to do work for IP holding companies, Rhodes said Monday it’s actually a rare exception and not the rule.
“More often than not the answer will probably be ‘no’ in the area of patent holding companies,” he said.
At Morrison & Foerster, IP veteran Harold McElhinny said that, given his firm’s clients, it would be difficult to represent someone suing an entire industry without a conflict arising. But the firm judges opportunities on a case-by-case basis, McElhinny said. For example, MoFo is currently working in the Eastern District of Texas representing an inventor suing a laundry list of car companies � from Nissan to Porsche � over a patent for monitoring tires electronically ( MHL TEK, LLC v. Nissan Motor Co et al, 07-00289).
“We expect clients to hire us because of our expertise,” McElhinny said. “We haven’t found it necessary to take any pledges.”
Cooley’s Rhodes said he didn’t think Howrey’s brochure would help the firm get any clients. “Clients want to know what your experience is, what your trial record is,” Rhodes said. “I’m not sure that it adds anything to demonize a whole class of litigants.”
A big problem for a firm trying to draw a line in the sand is that a patent troll is often in the eye of the beholder.
Some large companies, like IBM and Qualcomm, have aggressive licensing programs, which throws some water on the perception that it’s just the province of shadowy shell corporations. In other cases, inventors have legitimate claims against a number of large companies.
Read our latest coverage of patent law and intellectual property issues, from Silicon Valley to the U.S. Supreme Court.
“To some extent, the definition of troll can be ambiguous,” said Neil Smith, an IP lawyer at Sheppard, Mullin, Richter & Hampton in San Francisco. “Licensing is a legitimate use of your patents � if you’re licensing, does that mean you’re a troll, or does that mean you’re not a troll?”
In dividing the IP universe, Howrey defines a patent troll as “an individual or company whose sole business is acquiring patents for the purpose of forcing legitimate companies to take licenses or otherwise pay money � usually through threat of litigation.”
Or as Bunsow puts it: “The bottom-line definition of a patent troll is, ‘out to make a fast buck.’”
Howrey has and does represent some companies that some have labeled as trolls, like Los Altos-based Rambus. Even though the memory chip company gets most of its revenue from licensing and isn’t afraid to sue for infringement, Bunsow said he groups it in with research institutions, like universities, instead of trolls, because it researches and develops its own IP.
Another Howrey client, Canadian semiconductor and wireless licensing company MOSAID, has started to branch out beyond its own IP and buy patents much like a patent holding company. Bunsow said Howrey isn’t litigating with the company’s newly bought patents.
“We’ll continue to do what we’re doing for them at this point,” Bunsow said.
While several IP lawyers chided Howrey for its in-your-face marketing, most acknowledged that the issue is being actively debated by the in-house crowd. Some companies ask up front if your firm does work for patent trolls, they say.
Scott Coonan, director of IP litigation and licensing at Juniper Networks, said he wouldn’t be pleased if his outside counsel worked for a troll he might meet in court. He said he trusts his outside lawyers at Irell & Manella and Kaye Scholer not to.
“I certainly wouldn’t [be happy] if it’s a party that could potentially have an assertion against Juniper,” Coonan said. “I think my firms are sensitized to that”
Jay Monahan, who headed IP at eBay before recently moving to startup Vuze Inc., said that he wouldn’t rule out using a firm just because they’d litigated on behalf of what some might call a patent troll.
“I don’t think it’s so black and white for me � I think some plaintiffs experience can be helpful,” said Monahan, who was notoriously tough about fighting plaintiffs at his former job.
For its part, Howrey has safeguarded its new marketing effort from potential litigants. It claims to have a service mark for the term “troll busters,” which refers to its IP lawyers. But it may not be safe. Troll Busters, a group of Washington state lawyers who work to invalidate patents that holding companies are trying to enforce, says it got the mark first.
“I will call up one of the attorneys listed as a ‘troll buster’ for Howrey, and we’ll settle this matter,” said Jeffrey Oster, one of the attorneys. “The only difference [between the marks] is I have a much cuter troll.”