In the American legal system, the popular notion is that the courts should be equitable and fair to all parties, both plaintiffs and defendants, regardless of the issue at stake. This is reflected in our system’s handling of lawsuit legal fees, which typically keeps the costs of engaging in litigation with the party who contracted those costs during the legal process. Only in the most special of circumstances does the losing litigant have to pay the attorneys fees of the prevailing party in the United States. This has long been believed to be the best way to make sure that even those of modest means have meaningful access to seek redress in Court for wrongs suffered.
The American concept that each party should ordinarily pay for legal representation regardless of whether they win or lose has developed in sharp and direct contrast to legal fee rules in other countries. The two contrasting regimes are named for the two countries that most clearly represent these differing views: the United States and England. In recent days, the United States Congress, urged on by certain high-tech corporations, has considered legislation that would create new rules regarding fee shifting for patent lawsuits as a way to discourage so-called “patent trolls” from engaging in litigation. Unfortunately, the legislative proposals currently being considered are not at all narrowly tailored to address the patent troll problem, even assuming there is a patent troll problem, which the objectively available data calls into question in the first place.
Certainly, there is abusive litigation that occurs in the patent world. This abusive litigation does not, however, signal a problem with the patent system. Rather, the abusive litigation tactics leverage judicial inefficiencies to force litigants into paying exceptionally paltry sums rather than pay to fight a patent litigation that on average could cost $2 million to see through to the end. Those sending demand letters for $500 or $1,000 to small entities should be stopped. Those that sue large entities without care of whether there is infringement and settle for $25,000 or $35,000 should be stopped.