Supreme Court decision could force patent trolls to have skin in the game

It has long been a patent troll strategy to carpet bomb little companies with lawsuits. The cost of defending against the suit is much larger than the money at stake, so the little companies invariably cave. A key to this strategy is the fact that there is little cost to the patent troll if they lose a case. Currently, if the patent troll does lose a case, they just walk away, they have no obligation to pay the winner’s attorneys fees, which can be substantial.

This may be about to change.

The Supreme Court announced this month that it would hear two appeals of decisions by the federal appeals court that oversees all patent cases. In each case, the company that was sued for patent infringement won on the merits but did not prevail in having its legal fees paid by the losing party.

The court will decide whether to make it much easier for victors in patent suits to force their opponents to pay their legal fees. If it does so — and patent watchers generally assume that the court would not have agreed to hear the appeals if at least some justices were not sympathetic to the companies being sued — that could make it much more expensive to file a frivolous suit, and perhaps scare patent holders away from filing meritorious suits. Losing such a suit could conceivably bankrupt a small company if it was forced to pay the other side’s legal bills, which can run into the millions of dollars.

This could have huge implications. At the very least, it would force a patent troll to think twice before filing an industry-wide suit. If they lose, they risk everything.