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EFF to court: The First Amendment protects criticism of patent trolls

A man walking by an ATM, in Barcelona, Spain, 17 May 2017
A man walking by an ATM, in Barcelona, Spain, 17 May 2017

Joan Cros Garcia/Corbis via Getty Images

This statement was originally published on eff.org on 18 September 2018.

EFF has submitted an amicus brief [PDF] to the New Hampshire Supreme Court asking it to affirm a lower court ruling that found criticism of a patent owner was not defamatory. The trial judge hearing the case ruled that "patent troll" and other rhetorical characterizations are not the type of factual statements that can be the basis of a defamation claim. Our brief explains that both the First Amendment and the common law of defamation support this ruling.

This case began when patent assertion entity Automated Transactions, LLC ("ATL") and inventor David Barcelou filed a defamation complaint [PDF] in New Hampshire Superior Court. Barcelou claims to have come up with the idea of connecting automated teller machines to the Internet. As the complaint explains, he tried to commercialize this idea but failed. Later, ATL acquired an interest in Barcelou's patents and began suing banks and credit unions.

ATL's patent litigation did not go well. In one case, the Federal Circuit ruled that some of ATL's patent claims were invalid and that the defendants did not infringe. ATL's patents were directed to ATMs connected to the Internet and it was "undisputed" that the defendants' products "are not connected to the Internet and cannot be accessed over the Internet." ATL filed a petition asking the U.S. Supreme Court to overturn the Federal Circuit. The Supreme Court denied that petition.

Unsurprisingly, ATL's licensing revenues went down after its defeat in the federal courts. Rather than accept this, ATL and Barcelou filed a defamation suit in New Hampshire state court blaming their critics for ATL's financial decline.

In the New Hampshire litigation, ATL and Barcelou allege that statements referring to them as a "patent troll" are defamatory. They also claim that characterizations of ATL's litigation campaign as a "shakedown," "extortion," or "blackmail" are defamatory. The Superior Court found these statements were the kind of rhetorical hyperbole that is not capable of defamatory meaning and dismissed the complaint. ATL and Barcelou appealed.

EFF's amicus brief [PDF], filed together with ACLU of New Hampshire, explains that Superior Court Judge Brian Tucker got it right. The First Amendment provides wide breathing room for public debate and does not allow defamation actions based solely on the use of harsh language. The common law of defamation draws a distinction between statements of fact and pure opinion or rhetorical hyperbole. A term like "patent troll," which lacks any settled definition, is classic rhetorical hyperbole. Similarly, using terms like "blackmail" to characterize patent litigation is non-actionable opinion.

ATL and Barcelou, like some other critics of the Superior Court's ruling, spend much of their time arguing that "patent troll" is a pejorative term. This misunderstands the Superior Court's decision. At one point in his opinion, Judge Tucker noted that some commentators have presented the patent assertion, or troll, business model in a positive light. But the court wasn't saying that "patent troll" is never used pejoratively or even that the defendants didn't use it pejoratively. The law reports are filled with cases where harsh, pejorative language is found not capable of defamatory meaning, including "creepazoid attorney," "pitiable lunatics," "stupid," "asshole," "Director of Butt Licking," etc.

ATL and Barcelou may believe that their conduct as inventors and patent litigants should be praised rather than criticized. They are entitled to hold that view. But their critics are also allowed to express their opinions, even with harsh and fanciful language. Critics of patent owners, like all participants in public debate, may use the "imaginative expression" and "rhetorical hyperbole" which "has traditionally added much to the discourse of our Nation."

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