Court Says It’s Ok to Call Patent Assertion Entities “Trolls”

Inventor David Barcelou claims he came up with the idea of connecting ATMs to the Internet, and protected his method of doing so under patents he received. He transferred his patent rights to Automated Transactions, LLC (ATL), a patent assertion entity, which began suing banks and credit unions that were allegedly using Barcelou’s patents. About 200 different companies paid ATL an average of $15,000 per company in licensing fees, but when the patents were examined in court the Federal Circuit invalidated several of them, and found that the defendants’ ATMs did not infringe. Revenue dropped precipitously at ATL. In response, it launched a defamation lawsuit, blaming critics, including the American Bankers Association, Credit Union National Association, Inc., Crain’s New York Business, plus several individuals and law firms, for its problems. Among other things, ATL objected to being called a “patent troll.” In a decision upholding a lower court dismissal of the defamation suit, the New Hampshire Supreme Court opined that when ATL’s critics call it a patent troll they are expressing their subjective opinions, and differences of opinion shouldn’t be settled with a defamation lawsuit. Some of ATL’s critics also used the terms “shakedown” and “extortion.” The Court ruled those were hyperbole and not actionable either.