https://arstechnica.com/tech-policy/...l-label-loses/

8/19/2019

NH Supreme Court rules "patent troll" label is just, like, your opinion, man.



Automated Transactions LLC (ATL) is a small firm known for its aggressive enforcement of broad patents related to automated teller machines. Numerous critics labeled ATL a patent troll, and in 2016 the firm sued several of them in New Hampshire state courts, arguing that the label was defamatory.

On Friday, the New Hampshire Supreme Court dismissed ATL's lawsuit. To win a libel lawsuit, a plaintiff has to prove that a statement is both false and defamatory. A statement of opinion can't be proven false and, hence, can't be the basis for a libel claim. New Hampshire's Supreme Court ruled that calling someone a "troll" was just such a statement of opinion—and so it can't be defamatory.

“Nothing more than a shakedown”
In the 1990s, ATL founder David Barcelou invented a machine for automated gaming that made cash payouts to winners. While his invention never became commercially successful, he patented some of the underlying concepts—including patents related to the process of paying out cash to customers. Around 2008, the firm began asserting its patents against banks, arguing that banks infringed his patent when they connected their ATMs to the Internet. The firm generated more than $3 million in licensing revenues between 2011 and 2012.

Federal courts invalidated some of ATL's patents, but the firm pressed forward. According to the American Bankers Association, ATL continued to "assert those patents and sue banks across the country, including banks that do not even have ATMs."

ATL's critics got organized and fought back. A key figure in their effort was attorney Bob Stier, who agreed to represent several of ATL's targets in a united front against the firm.

"Automated Transaction’s suit amounts to nothing more than a shakedown of community banks and that the company has intimidated more than 140 banks into settling," Stier told the Boston Business Journal.

On its website, Stier's law firm boasts that "after more than 100 banks were brought together in 2012 to defend against a patent troll that demanded licenses for their ATMs, that particular patent troll lost its appetite for the patent litigation and abandoned its claims."

Meanwhile, the Credit Union National Association began speaking publicly about the patent troll problem, with ATL as one of its standard examples. One presentation by the organization's lawyer, Robin Cook, showed a cartoon picture of a troll and labeled ATL as a "well-known troll."

Opinions, not facts
In late 2016, ATL sued the ABA, CUNA, Stier, and other critics, arguing that the troll label—as well as claims that ATL is engaged in a "shakedown" and "extortion"—were defamatory.

A lower court dismissed the lawsuit in 2018, ruling that these terms were statements of opinion that could not give rise to defamation lawsuits. Barcelou appealed to New Hampshire's highest court, which heard the case earlier this year.

The court handed down its opinion on Friday, and it was an unmitigated victory for the defendants.

"The challenged statement, that ATL is a well-known patent troll, is one of opinion rather than fact," the New Hampshire Supreme Court wrote about the Credit Union National Association. "The statement is an assertion that, among other things, ATL is a patent troll because its patent-enforcement activity is 'aggressive.' This statement cannot be objectively verified."

Similar reasoning applied to statements by the American Bar Association, Bob Stier, and his law firm, the court concluded.

Officially, the ruling by the New Hampshire Supreme Court only applies in New Hampshire. But state courts do pay attention to rulings in other states. If trolls sue for defamation in other states, the defendants will be able to cite the New Hampshire precedent in their defense, making it more likely that they'll ultimately prevail.