What's wrong with champerty? | Opensource.com

What's wrong with champerty?

Posted 12 Nov 2009 by 

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Let's bring back barratry, maintenance, and champerty for patent lawsuits.  Combine that with a limitation on the assignment of patents and a lot of patent trolls would be out of business.

This is what barratry, maintenance and champerty meant in England in 1916:

"Common barratry is the offense of frequently exciting and stirring up suits and quarrels between his Majesty's subjects, either at law or otherwise. . . .  Maintenance is an offense that bears a near relationship to [barratry], being an officious intermeddling in a suit that no way belongs to one, by maintaining or assisting either party with money or otherwise to prosecute or defend it. This is an offense against public justice, as it keeps alive strife and contention and perverts the remedial process of the law into an engine of oppression. . . .  Champetry, campi-partitio, is a species of maintenance, and punished in the same manner, being a bargain with a plaintiff or defendant campum partire to divide the land or other matter sued between them, if they prevail at law, whereupon the champertor is to carry out the party's suit at his own expense."

2 William Blackstone, Commentaries on the Laws of England, 2311-16 (William Carey Jones ed. 1916).

These legal principles still exist today, for the same reasons:

"The doctrines of champerty and maintenance were developed at common law to prevent officious intermeddlers from stirring up strife and contention by vexatious and speculative litigation which would disturb the peace of society, lead to corrupt practices, and prevent the remedial process of the law."  Rancman v. Interim Settlement Funding Corp., 789 N.E.2d. 217, 219-220 (Ohio 2003). Doesn't this sound exactly like what patent trolls do, "stir up strife and contention by vexatious and speculative litigation"?  Patent trolls can "pervert the remedial process of the law into an engine of oppression" because they have no skin in the game, which is what the laws of barratry, maintenance and champetry were meant to prevent.

But patent trolls mostly own the patents they sue on, so there is no champerty.  But why should they get to own patents solely for the purpose of bringing lawsuits?  Trademark law dealt with a similar problem, a worry about trafficking in intent-to-use trademark applications, and solved it by forbidding the assignment of them "except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing." Why can't we limit the assignability of patents in a similar way, that they can only be assigned with the ongoing business?  If a patent is meant to further technological development, why do we allow them to be assigned to entities that aren't actually doing that?

I'll be the first to admit there are a lot of flaws with this theory.  But do patents have to be freely assignable? And why can't we prohibit a cause of action for patent infringement where there is no net gain to society?

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24 Comments

rtiller
Open Source Evangelist

I thought you were going in a different direction on champerty -- calling into question the relations of trolls and their attorneys. It's common for patent trolls to give their attorneys an interest in the lawsuit, which creates increased incentives for lawsuits and more lawsuits. That sounds a lot like champerty, but I haven't heard of anyone testing that idea.
Anyhow, there may be some answers to your question of why we shouldn't limit assignability of patents, but especially given the trademark example, it's a question worth asking. It sounds like a reasonable way to confine valid patents to legitimate uses.

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Steve Stites

Pam Chestek advocates using champerty against patent trolls. Another, more deserving, target for a champerty claim is SCO. Red Hat should consider accusing SCO of champerty in their lawsuit against SCO if that lawsuit ever gets revived.

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Steve Stites

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John Morrison

Patents and trademarks should be subjected to property taxation, much as real property is. This would help pay for the substantial cost the public bears for IP litigation. It also would discourage patent trollery.

Want to hogtie innovation? Go right ahead, but pay taxes whilst you lie in wait.

Another good idea is to have an "adverse possession" rule. A patent or trademark unenforced or unused for ten years goes public domain. Enough of this. It is tying America in knots and destroying its competitiveness. This country is in serious decline; we don't need to grease the skids with this stupid stuff.

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pchestek
Open Minded

Interesting thoughts. I agree that some of these practices are harming competitiveness, taking time, attention and money away from the business at hand. I'm all in favor of the exploration of different legal strategies that might help rein in this parasitic behavior.

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Andrew Cutler

It never ceases to amaze me how far we have come as a society, yet how retrogressive our development in the area of intellectual property and copyright (esp. enforcement) has become.

I wonder if in a few decades we will look back and wonder how we went so wrong...

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Tom M

Wouldn't bodies like EFF be guilty of Maintenance when they support people being harassed by lawsuits?

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Neeneko

That would be my concern too.

While this might be a useful way to fight trolls, it could easily be converted into a blank check for stopping critics of well funded organizations.

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Wayne

is, indeed, sauce for the gander.

Not to defend SCO's and other patent trolls activities, but it sounds like it. If the EFF became the primary attorney of record, maybe that would diffuse the situation. I don't know that even 'loser pays' options would help, there's currently an issue where EFF sued RIAA, RIAA backed down or lost the case, EFF is now trying to collect some $400k from them with little result. That's the problem with suing attorneys: they can keep a suit going far longer than non-attorneys can for very little cost.

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Bruce

Heck, bring them back for most civil actions as well. The fear of troll-like lawsuits has driven most institutions in the U.S. into some very strange and non-flexible policies. Everything from school dress codes to copyright law to airport security could benefit from laws that make it harder to bring suit.

The downside is that it would make it much harder for anyone but the most wealthy to take on a large business when that business was in the wrong. So maintenance and/or champerty might be off the table for some situations.

I'd love to see Monster cable brought up on a barratry charge, though.

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Unidentified

I'd be careful about typing that M-word in public. They might track you down and sue for use of a registered trademark...

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Unidentified

I'd be careful about typing that M-word in public. They might track you down and sue for use of a registered trademark...

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Edward

"Maintenance" sounds a lot like "contribute to someones legal defense fund, go to jail yourself." and I don't like that idea. It also would tip the law in favor of big corporations because they could afford a suit but and couldn't afford one and couldn't get help paying the bills.

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pchestek
Open Minded

How about a "loser pays" system, would that work? The common criticism of that system is that it also as an obstacle for an underfunded plaintiff. But it seems to be pretty successful in other countries.

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Jim Schneider

There are serious problems with "Loser Pays".

First, it has a chilling effect on parties of limited means who have a legitimate cause of action. If I'm hit by a bus, for instance, I'm going to be much less likely to sue the bus company if I know I'm going to have to pay their legal fees should I lose. The law is complex and technical, and the requirements of courts are arcane and exacting - it's possible to lose a seemingly airtight case because of paperwork errors.

Second, it removes market forces from pricing for litigation services. If legal fees become a judgment against the loser, there's going to be enormous incentives to inflate those fees. You can see this right now in the US in cases under the Fair Debt Collection Practices Act - typically, awards for legal fees dwarf the awards for damages under the Act. And losing plaintiffs more often than not wind up paying enormous sums for the legal fees of the abusive debt collectors they are suing.

Third, it has virtually no effect on litigants who pursue several lawsuits. If I'm a patent troll, and I win 50% of my cases, I'm going to wind up paying roughly the same amount in legal fees under a loser pays system as I'm paying already.

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Unidentified

* Lawyers wins class action lawsuit
* Lawyers collects millions in fees
* "Class" gets coupons for $10 off their next purchase.

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srstites
Newbie

I wholeheartedly agree with your description of the problem with class action lawsuits, the lawyers settle to their advantage rather than to the class members' advantage. Instead of using champerty I think that we should give judges the power to rule on whether a negotiated settlement in a class action is actually in the plaintiff class' best interests.

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Steve Stites

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tcolindodd
Open Source Champion

There's even more of this debate here:

http://yro.slashdot.org/article.pl?sid=10/01/27/0041242

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Robert Scott

Litigation seems all too often a core part of some business plans these days, and patent trolls are among the worst. So if/when these constructs are brought into the fray, I would recommend limiting their initial use to prevent their own abuse.

I have no issue with genuine patent infringement lawsuits. Inventors should have the right to benefit from their creations. However, the debates need to shift toward limiting the amount of time for patents, trademarks, and copyrights. We need to demand the removal of "Disney" laws.

I like the concept mentioned earlier of adverse-possession. Perhaps it should be employed for trademarks and patents. If you or a company no longer build widgets and have not done so for 5+ years, then I would think it reasonable that you might have diminished rights in ownership to widget designs.

I also hope that some company will bravely lead the pack and outright ban the practice of patent/trademark/copyright trolling as a commercial enterprise. Attorneys should be limited to hourly wages and standard fees rather than % of awards. In order for true reform to take place, you have to remove the incentives against change for both litigants and litigators.

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pchestek
Open Minded

I believe some countries have laws that provide for a mandatory patent license if a patent isn't being practiced. I think the difficulty with it is the ambiguity of a lot of the patents - how do you ever know you need a license until after the lawsuit is over? I suspect a lot of patent attorneys would tell you that they've seen patent lawsuits over patents they never would have spotted as a problem in a search, because the patent owner finds a less obvious theory of infringement.

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Arthur

As I read the Constitution of the United States, it seems neither vague nor ambiguous on the point of who should be granted protection for copyrights or patents: Authors and Inventors. Not their heirs or assigns; authors and inventors. Period.

Unfortunately, the U.S. Supreme Court decided 150 years ago to throw out the Constitution and open the protection to non- innovators. Decisions since have moved us ever closer to patents and copyrights as common property. As a result we now have 150 years of precedent sanctifying this abuse of the concept protection as an incentive for innovation.

It is as though the founding fathers realized what we are today just re-discovering: that when the incentive of exclusivity for innovation is extended to non- innovators, it ceases to be an incentive, and becomes instead a deterrent.

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Robert Scott

While I agree with these sentiments, I do believe that an heir should be able to enjoy the fruits of creative efforts by their progenitor. That having been said, it makes sense to keep things simple: set a standard maximum amount of time before something goes into the public domain (be it copyright, patent, trademark, etc.)
and so be it. If a 90 year old man invents a cure for diabetes and then dies himself, I have no problem passing along his rights and interests to his heirs, but I want those rights to be firmly terminated at a set date. US copyright and patent law allows too long a time for protection, and I think more creativity would be the result of allowing more people to inccorporate other people's inventions at an earlier stage.

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Ersun Warncke

What is the constitution? I have never heard of that before :) You do have to wonder how it is possible to construct such explicit language on who can be issued copyrights/patents into such a broad license. I suppose you can wonder in the same thought as to how it is possible to construct a corporation into a citizen with the rights of a person, while at the same time saying that real people are "illegal" and thus have no rights, but I digress. On the subject of champetry: I have read reports of hedge funds investing in law suits in exchange for a cut of the proceeds. Maybe in a few more years there will be a law suit derivatives market, and an exchange for law suit shares. Don't question it, it is just the free market at work.

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Unidentified

This is really great article. It shows that the original founders saw the possible abuses of patent law way back when. One of the core problems with Patents is just how easy they are to get and broad they can be. I think this is because the law is trying to make a copyright decision about a subject it knows little or nothing about technically. For example, I know a company that was awarded a patent on 'Call-Intercept' on mobile phones. In legaleeze being able to intercept specially called numbers seems like a new novel application, but technically; one just subscribes to the outbound call events and compare the number dialed with a list. You can probably guess that if you have a match you just hangup the call and do something else. So, this just to illustrate how a novel idea translates into very generally available calls to the OS. Being able to legally stop other programmers from hanging up a phone call based on a list of numbers seems far reaching, but this patent makes that assumption.
I like how open source views the code itself is always its own patent, you don't need to publish and get a copyright stop someone from using your original work of authorship as their own.
But what is really needed s a side-door into the patent office where any patent could be challenged on technical merit. Where the challenger simply needed to prove that your patent didn't involve the creation of any new technology and was just an application of broad generally available functions to remove the patent. Of course, all authors and companies retain authorship copyright but the patent is often ridiculous.

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Unidentified

.. by giving the inventor the protection, not the public. They do so by protecting the inventor's investment in time, money, etc. The promotion of innovation is in the protection, not in the removal of it.

(Or, one might say that removing the protection furthers innovation by giving inventors a reason to keep inventing stuff after their patents expire.)

But the patent is not "for" the public, it is "for" the inventor.

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Pam, formerly Manager, Senior Intellectual Property Counsel for Red Hat, is now the principal of Chestek Legal in Raleigh, North Carolina. She works with creative communities, giving practical legal advice on branding, marketing, and protecting and sharing content. Pam has authored several scholarly articles, has a legal blog at

Should I use a permissive license? Copyleft? Or something in the middle?