CONCORD, Calif.–Calling somebody a “patent troll”–which credit unions and their trade groups have done–might be insulting but it’s not defamatory, according to this state’s Supreme Court. The reason? There’s no exact definition of the term.
The case included as evidence a PowerPoint slide that was part of a CUNA presentation.
At issue is a case involving David Barcelou and his firm Automatic Transaction LLC. Barcelou, which has patents related to performing “automated transactions” online, which came out of his development in the 1990s of race-car simulators and subsequent effort to create automated tournaments online that would award the winner an immediate prize, according to the Valley News.
Barcelou created a prototype of this in 1994 and expanded it to dispense cash.
“In 2005, he was awarded a patent covering this technology and soon after started seeking licensing fees from places with ATM machines that give out cash, starting with the 7-Eleven chain and moving on to banks,” Valley News reported. “He sent out many letters alleging patent violations to scores of banks and demanding quick payment.”
Banks and credit unions around the country have been among those receiving letters and threats of lawsuits around patents allegedly held by various individuals and companies, including small pieces of software code included in various solutions.
‘Shakedown’ and ‘Ripoff’
Banks and credit unions have objected to the lawsuits, calling them not just a “shakedown” and a “rip-off,” but also alleging the plaintiffs are “patent trolls” who file the suits against deep pocket defendants who are likely to settle rather than go through more costly litigation.
In 2016 Barcelou filed suit in Sullivan County Superior Court against dozens of people and groups, including the American Bankers Association, CUNA and individual banks. “Instead of matching (his) fair play by contesting the patent portfolio in appropriate forums, (they) launched a malicious, defamatory smear campaign in the public,” the suit argued, asking for monetary damages, the Valley News reported.
“It’s outright blackmail and we’re not going to be a party to it,” said Steve Christy, president of Mascoma Savings Bank, one of 97 banks and credit unions that challenged Barcelou’s claims, said at the time, the Valley News stated.
Slide from CUNA Presentation is Highlighted
“Barcelou’s initial defamation lawsuit in Sullivan County Superior Court, filed against dozens of people and groups, included a PowerPoint presentation by a counsel for the Credit Union National Association titled ‘Hot Topics In Litigation’ that included a cartoon of a club-carrying troll while discussing Barcelou’s case,” the lawsuit sated.
A representative of the AGA also told a House subcommittee that Barcelou was a “patent troll,” whose demands cost “nothing more than the price of a postage stamp and the paper the claim is written on.”
In March 2018, Judge Brian Tucker threw out Barcelou’s lawsuit in a summary judgement that said the phrase “patent troll” and other rhetorical characterizations are not the type of factual statements that can be the basis of a defamation claim. The comments, Judge Tucker wrote, are “of the ‘loose, figurative, or hyperbolic’ sort that is not actionable for defamation,” according to the report.
Barcelou appealed the state Supreme Court, which upheld the ruling.
No Indication of ‘Opinion’
“The plaintiffs contend that the context of … patent troll statements make them actionable because they contain ‘no language to alert the audience that the statements ... are expressions of opinion.’ However, the law does not force writers to clumsily begin each and every sentence with language such as ‘I think,’ or ‘in my opinion,’ for a statement to constitute an opinion,” the court wrote in its opinion. “Patent troll statements are opinions (because) whether ATL is a patent troll cannot be ‘objectively verified.’”