Hypercom Corp. v. Omron Corp. 2007 U.S. Dist. LEXIS 12533 District of Arizona, decided Feb. 22, 2007 Judge Rosenblatt Download PDF of case. Omron Corp. apparently asserted some patent infringement claims against Hypercom and other companies through Verve L.L.C. (a Ã¢â?¬Å?patent holding companyÃ¢â?¬Â? that does not make or sell any products). Hypercom is claiming this was done in bad faith, without probable cause, and solely to extort large sums of money in the form of settlements. Hypercom is claiming that Omron conspired with Verve when Verve filed lawsuits against Hypercom for patent infringement. One patent infringement suit filed by Verve against Hypercom was concluded to be Ã¢â?¬Å?objectively baseless.Ã¢â?¬Â? See Verve v. Hypercom, 2006 U.S. Dist. LEXIS 58398. Hypercom has sued a company (Omron, which markets and sells electronic devices) because a patent troll may have tried to extort money from it. This is happening under Arizona state law for malicious prosecution. There is an interesting preemption issue here, with a bonus of an apparent circuit split:
To support its position, Omron cites to the Federal Circuit case, Abbott Laboratories v. Brennan, 952 F.2d 1346 (Fed. Cir. 1992). Omron argues that the Abbott Laboratories case stands for the proposition that federal patent law preempts common law torts which consist of nothing more than misconduct in administrative patent proceedings. This Court, however, will apply the law of the Ninth Circuit which is in direct opposition. According to this circuit, federal law does not preempt Hypercom’s state law claims. In U.S. Aluminum Corp. v. Alumax, Inc., 831 F.2d 878, 881 (9th Cir. 1987), the Ninth Circuit Court of Appeals recognized that although conflict is possible between state malicious prosecution laws and federal patent laws, the policies underlying each are not inherently antithetical. Patents do not create an exemption from state malicious prosecution laws.”
This opinion denied OmronÃ¢â?¬â?¢s motions for summary judgment. It remains to be seen whether this patent troll will have to pay for alleged misbehavior. Be sure to check Tech LawForumÃ¢â?¬â?¢s video content for an upcoming video where Professor Ted Hagelin comes to the defense of patent trolls. Download a pdf of an abstract to HagelinÃ¢â?¬â?¢s paper entitled Ã¢â?¬Å?The Patent Troll Non-ProblemÃ¢â?¬Â? here.