ABA Wins N.H. Defamation Case Brought by Patent Troll

In a unanimous decision, the New Hampshire Supreme Court today upheld a lower court ruling that dismissed defamation claims brought by a patent assertion entity against the American Bankers Association and other defendants who labeled the company and its operator a “patent troll.” The court found that the term “patent troll” is a non-actionable expression of opinion and that “ABA clearly and comprehensively laid out the facts upon which it based its opinion.”

The suit was brought by David Barcelou and a company he controlled. Barcelou held a commercially unsuccessful patent for cash-dispensing-related technology, and between 2011 and 2012 he generated $3 million in licensing fees from demand letters to banks. Along with bankers and other associations, ABA in congressional testimony described these kinds of actions by patent assertion entities as those of a patent troll.

Patent trolls, also known as patent assertion entities or non-practicing entities, work by acquiring patents to common processes and technological elements—such as scan-to-email functionality on a copier or an ATM’s ability to connect to the Internet—then demanding “licensing fees” and threatening litigation. The cost of litigation is intended to pressure businesses to pay the fee, regardless of the patent’s validity. ABA has strongly advocated for Congress to pass laws strengthening protections against patent trolls for banks and other small businesses.