CONCORD, N.H.–Is it libelous to label a company a “patent troll,” as both CUNA and the American Bankers Association have done with Automated Transactions, LLC (ATL).
Numerous others have also used the words. Indeed, a search of CUToday.info finds more than 159 matches for “patent troll.” But both CUNA and the ABA were sued by the company over their use of “patent troll.” CUNA even used a picture of a “patent troll” in one of its communications, the plaintiff is alleging.
In this case, the words were used to describe ATL and its founder, David Barcelou, following lawsuits filed by ATL and Barcelou over patents he and his company hold related to automatic teller machines. Although he hasn't tried to commercialize its technology in more than a decade, Barcelou and ATL have filed suits alleging his patents have been infringed upon by the manufacturers and operators of certain ATMs. At its peak between 2011 and 2012, ATL's campaign to have financial institutions pay it a licensing fee generated more than $3 million in revenue, according to Arstechnica.com. In 2012, a federal appeals court, however, ruled several of ATL's key patent claims were invalid, taking the wind out of ATL's licensing efforts. The American Bankers Association wrote that ATL continued to "assert those patents and sue banks across the country, including banks that do not even have ATMs."
A Dozen Suits Filed
In 2016, Barcelou filed suit against approximately a dozen individuals and organizations after being labeled a “patent troll,” a suit that was dismissed in 2018. CUNA and the ABA were defendants in that lawsuit. But the New Hampshire Supreme Court agreed to hear the case and on Feb. 14 and listened to oral arguments over whether to overrule the lower court's decision and allow the lawsuit to move forward.
According to analysis by Arstechnica.com, the “stakes are high,” as should Barcelou succeed it’s very likely other “alleged patent trolls will flock to New Hampshire to sue their detractors for libel.”
Under the law, defamation is limited to factual claims that can be shown to be clearly false, and mere statements of opinion or the use of vague terms without a clear definition cannot be defamatory, reported Arstechnica.com. “Defendants argue that "patent troll" fits into this latter category—as do other terms they've used when talking about ATL, including ‘blackmail,’ shakedown,’ and ‘extortion.’ Critics warn that if ATL's lawsuit succeeds, it could chill public debate about patent reform and violate the First Amendment, stated Arstechnica.com.
Oral Arguments Heard
In Thursday's oral arguments at the New Hampshire Supreme Court, ATL attorney Steve Gordon urged the New Hampshire justices to overrule that initial dismissal of the lawsuit.
"The gist or sting of the statements at issue was that my clients were extortionists, shakedown artists, preying on small banks seeking to license patents that were of no value," ATL attorney Steve Gordon told the New Hampshire Supreme Court, according to Arstechnica.com. Gordon added that none of this was true.
According to the report, some of the justices were skeptical of portions of the arguments made by ATL. No date has been set for a ruling by the state’s Supreme Court.