An Inventor’s Glossary

Tuesday, Jan 5th, 2016

The patent debate is filled with articles, news and opinions that often include intricate, technical and potentially unfamiliar words. Save the Inventor thinks it’s time to clear up the confusion. With the inventor’s glossary, we’ll help you cut through the rhetoric and get to the facts surrounding the issue.

This week Save the Inventor defines customer stay and joinder provision.


Customer Stay Provision

Definition
The customer stay provision, which is found in pending patent legislation, directs courts to stay[1] judicial proceedings against vendors, manufacturers, and end-users of a product when a retailer or manufacturer in the distribution chain of the product is a party in the infringement suit.
[1] Stay is a suspension of a case or a suspension of a particular proceeding within a case.

What this means for inventors
Proponents of the customer stay provision claim it is necessary to help protect the innocent end-users of allegedly infringing products from litigation. However, the language used in pending patent legislation is too broad and flawed.

As the provision stands, large companies that use inventor’s intellectual property illegally and infringe on their patent would be unfairly protected from patent infringement lawsuits because inventors would have to sue the manufacturers first. While an inventor has to chase down multiple overseas manufacturers (think time and cost) before they can directly pursue the company selling the alleged infringing product, that company gains a foothold in the marketplace and continues profiting from the inventor’s patented innovation. As currently written, the customer stay provision would inoculate big, corporate infringers while leaving small inventors with an expensive and protracted path for defending their intellectual property.


Joinder Provision

Definition
The joinder[1] provision, allows the district court to join an “interested” third party to a lawsuit and make that third party liable if there is a problem with the collection of attorneys' fees by the losing party after the end of the case. The joinder provision is aimed at companies that “hide behind” so-called “patent trolls," which often have no assets other than the asserted patents.
[1] Joinder is the joining of two or more legal issues together.

What this means for inventors
At the end of a patent litigation case, the court grants all legal fees to the losing party, which may be insurmountable. With the joinder provision, if the losing party cannot pay the fees, the winning party may drag an “interested party” into the case to pay the fees; for example, a university who licensed technology for a particular product or investors.

Although this provision has been promoted as a way to curb abusive litigation, in practice, it will have little impact on its intended target. In fact, the joinder provision could prevent the enforcement of legitimate patent rights while letting abusers walk away from their obligations.

As currently written pending legislation, the joinder provision includes a loophole that would allow companies that back so-called “patent trolls” to avoid joinder and any responsibility for a fee award by renouncing ownership or direct financial interest in the losing party. Unfortunately, the same approach would not be possible for universities, researchers, and companies that back start-ups.

If proposed legislation passes with this provision, “interested parties” would be less likely to invest in small inventors or license patents due to the risk of being pulled into costly patent litigation cases.

For More Information on customer stay:

For More Information on joinder provision:

Stay tuned for our next glossary post and in the meantime visit SavetheInventor.com/gethtefacts to learn more.