Are State 'Anti-Troll' Laws Constitutional? The Federal Circuit Avoids the Question (For Now)

"On Thursday, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued its opinion in Micron Technology v. Longhorn IP. As reported here, the CAFC held that it lacked jurisdiction to hear Longhorn's appeal from a district court order that required Longhorn to post an $8 million bond to proceed with a patent infringement case. In imposing the bond, the district court had relied on Idaho's "anti-troll" statute, which"

"The problem for Longhorn was that, typically, only final, case-ending judgments are appealable; the district court order imposing the bond was indisputably not that. So, Longhorn argued to the Federal Circuit that the bond order had a similar effect-that, as practical matter, Longhorn couldn't move forward with its infringement case because of the large bond the district court had required."

"At oral argument (which I previewed for IPWatchdog here), both Judge Lourie and Judge Stoll pointed out that there was no proof in the record that Longhorn could not, in fact, afford the bond. And Judge Lourie's opinion for the court mentioned that lack of proof several times. See, e.g., slip op. at 7 ("There is no record evidence suggesting that [Longhorn] cannot continue the litigation due to the imposition of the bond.")"

The Federal Circuit held that it lacked jurisdiction to hear Longhorn's appeal of a district court order requiring an $8 million bond. The district court imposed the bond under Idaho's anti-troll statute, which outlaws bad-faith assertions of patent infringement and mandates a bond equal to the opponent's estimated litigation costs and damages when a reasonable likelihood of bad faith exists. Longhorn argued that the bond effectively prevented continuation of its infringement case. Judges Lourie and Stoll observed there was no record evidence that Longhorn could not afford the bond. Judge Lourie's opinion emphasized that lack of proof and indicates mandamus may be the only available mechanism to challenge such bond orders.

Read at IPWatchdog.com | Patents & Intellectual Property Law