Are silly lawsuits really so easy to win?

[Gfactor]

@DSYoungEsq

I want to see VCO3’s reaction to the decision in Palsgraf v. Long Island Rail Road Co.…

Here is the case: 404 ERROR - N.Y. State Courts

[Gfactor]

And there’s this old gem:

In the Polemis Case (1921, 3 K. B. 560), defendant’s worker carelessly allowed a plank to fall into the hold of the ship. The falling plank struck something and thereby caused a spark which in its turn ignited gasoline vapor in the hold. The vapor caused a fire which destroyed the whole ship. Held: The fire was not a reasonably foreseeable consequence of allowing the plank to fall. However, it was reasonably foreseeable that the falling plank would cause some form of damage to the vessel. Because of this, the court established defendant’s negligence. Whether the particular damage caused by the fire was recoverable depended solely on it being a direct consequence of the negligent act. Although the damage by fire could not have reasonably been foreseen as a consequence of dropping the plank, Defendant was therefore liable for the loss of the ship by fire.

[Huerta88]

@Gfactor

That’s what I was trying to say. Thanks for clarifying.

I know how the system works. What I’m trying to say is that while as a baseline, each party bears his own costs, and in principle, this rule has exceptions whereby either a prevailing defendant or prevailing plaintiff can be forced to assume the other’s attorneys fees, it is in practice pretty rare for a prevailing defendant to recoup much or all of his attorneys fees, whereas a plaintiff who hits a home run with a favorable verdict can, under various statutory and common law provisions, often hope to obtain his attorneys fees. Thus, it is wrong to imply that the American Rule means only each party is equally situated with respect to the sunk costs of attorneys’ fees.

I will give you an example: Patent infringement litigation. Under the statute, the court is authorized to award enhanced damages (up to triple the economic damages) and attorneys fees (presumably to either party – the statutory language is “The court in exceptional cases may award reasonable attorney fees to the prevailing party”).

Now, in practice the “exceptional circumstances” that will be predicate for an award of attorneys’ fees to a plaintiff (and for enhanced damages) is a finding of willful infringement. I don’t have exact statistics, but my general impression is that willful infringement is probably found by the jury or judge in a majority of cases in which infringement is found; maybe it shouldn’t be, but once the jury’s sympathy is engaged on behalf of patentee, they tend to go all the way.

Whereas “exceptional circumstances” that would justify an award of attorneys’ fees against a losing patentee are in practice limited to egregiously unfounded claims, essentially claims that would be sanctionable as frivolous under Fed. R. Civ. P. 11. Again, while maybe things should work differently, those who litigate in federal court know that judges, in practice, hate sanctions motions and are very loath in general to find even the flimsiest claims to have been filed without appropriate foundation or investigation. So, in practice, the odds of a defendant having to pay a patentee’s attorneys’ fees are substantially greater than vice versa.

Not coincidentally, many patent cases, even non-meritorious ones, settle well before trial.