Shakedown operation [LWN.net]

Shakedown operation

Posted May 28, 2006 17:07 UTC (Sun) by man_ls (subscriber, #15091)
Parent article: U.S. PTO smashes JPEG patent (Linux-Watch)

Where does this bit of news leave Sony and the others that already paid? Can they sue and get back the amounts they paid? It would be a good lesson for patent extortion shops, and maybe lower the value of patents everywhere.

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IANAL, but ...

Posted May 30, 2006 4:10 UTC (Tue) by JoeBuck (subscriber, #2330) [Link]

... I think that the answer is "no". If an outfit threatens to sue you, and you settle, you settle for an amount that is less that the shakedown outfit would get if they went to court and won a full victory. There's always a chance that you pay someone off, when it turns out that the troll has no case.

So I'm fairly sure that Sony and anyone else is simply out the money. On the other hand, there is another class of shakedown artists, lawyers who sue corporate boards of directors any time a bad decision is made that causes the stock to drop. So, I suppose someone could sue Sony in the name of the stockholders for wasting money. But don't hold your breath.

IANAL, but ...

Posted May 30, 2006 10:47 UTC (Tue) by pmilne (guest, #34533) [Link]

There may be circumstances where a person who paid royalties could claim them back when a patent is knocked off its pedestal, especially in cases where the person receiving the royalties knew or should have known that there was material prior art that was not noted with the application. Even if a licence agreement clause precluded this, unconscionable conduct by the licensor may void such a clause.

A patent troll who purchased such a patent and who unaware of such a situation could however possibly retain payments up to such time that he was made aware or became aware of the problem with the patent.

The legal aspects with respect to this are pretty complex but if the stakes are big some disgruntled licensee will no doubt try it on.