Of course, it's frustrating to see the aspects of this situation that are (practically) unsolvable. But one item jumped out that I'd be interested in knowing more about:
> Nissan Motor was ordered to reimburse Mr. Nissan only $52k in legal fees, of the over $3 million Mr. Nissan was forced to spend
What are the reasons for that disparity? Would fixing the way we calculate those legal fees help to fix these kinds of abuses?
https://en.m.wikipedia.org/wiki/English_rule_(attorney%27s_f...
I understand that the American legal system is a bit unique when it comes to lawsuits, but I'm hampered by not understanding exactly how, and what the positives and negatives of that are.
As I'm thinking about it, one of the other big benefits is at-risk speculation. Say I'm a small fish with a few hardware patents and I'm pretty sure Honeywell is infringing on them.
Currently, I need to ask my good-for-what-I-can-afford attorney to have a look at it, then debate whether I have the cash on hand to take the suit, and figure out the economics of sustaining my business while I try to seek damages from Honeywell's wanton disregard for my IP. I have to do all this because I'll likely have to pay as I go unless I have a slam-dunk case, and even then, a lot of my winnings would go to the attorney if they'd foregone payment until verdict.
In a loser pays system, there's a greater guarantee of payment if they win -- so it can be beneficial when the possible case looks good on the surface, to do some at risk research to determine its real viability. I can take that case, then, to a larger or more experienced firm because the economics of the win are advantageous to them. Hypothetically, it could help in that second way to level the pitch for the "underdog."
As well, knowing I can take my case (or defense) to a larger firm who would be better protected from loss in an at-risk or deferred payment agreement, means that larger corporations will necessarily be dissuaded from the more frivolous or speculative suits they're wont to bring. Even for corporations with large litigation coffers, running a negative balance sheet will get a firm or legal team replaced.
Another detail is the 'loser pays' principle[1], which (barely) exist in the US, but is prevalent in almost all other civilized countries.
It's solve purpose is to dampen the effect of frivolous lawsuits, by making the instigator pay for the whole carouse (wasting other peoples time and wasting the legal system's time).
[1] https://en.m.wikipedia.org/wiki/English_rule_(attorney%27s_f...
I mean, BigCo sues you. They threaten you they have 100 attorneys they can get off the leash. Even if they're most obviously in the wrongs, you'll have to get somewhat matching manpower to thwart the pressure. And even if you win and BigCo pays for all of the mess, you need a very large sum of money while this isn't over. So, a barrier for justice is still there. (Not to say the only real winning side here are attorneys, because they're practically fed a giant amount of money.)
And then there's a fear of "and what if I lose"...
Which is not necessarily remote. In Ticketmaster v. RMG, the smaller company, which extracted non-copyrightable data from Ticketmaster's site, lost because the Court ruled that the momentary existence of a web page in RAM constituted an unauthorized copy. The real-world analog is claiming that an illegal copy is made every time a copyrighted work reflects against your retina. The only explanation for that kind of ruling is simple technological ignorance, but it's what we have to deal with.
While the American system has safeguards in place to prevent it, you do have to ask yourself how badly a particular judge is going to want to offend a massive company that could potentially make him tons of money if they believe he's a reliable ally; if not through explicit corruption and bribery, through the possibility of a post-retirement relationship as a "legal consultant" or similar. What benefit does the judge get by favoring a tiny company that's probably not going to be around for more than a few years anyway v. favoring a megacorp that has practically infinite money to burn? Whatever the deterrents are, we do have to recognize that the natural incentive is to favor the larger company, and remain cognizant of that.
We've seen a minor version of this happen with the Eastern District of Texas, which has become the go-to jurisdiction for patent trolls because they believe that judges that sit there are more sympathetic to their cases than other judges may be. The incentive exists for the circuit to encourage a "specialist" reputation, because they collect more filing fees that way, and the judges get more attention, which is a very valuable currency indeed.
- An attorney doesn't need to be afraid of not getting paid if they're supporting the side that is 'objectively right'. Obviously, most cases aren't crystal clear from the outset, but some are.
- The cost of bullying goes up in the cases where the bully loses.
But you are right, there are also instances where it wouldn't help much. This isn't a silver bullet, but there are good reasons why almost all other modern countries has adapted this principle.
I think it's a hard problem to reorganize the system to prevent big corporate bullying. I think any potential solution would be pretty sweeping.
One idea would be to require MegaCorp (defined maybe as $100m+ annual revenue) to pay the legal fees of the small defendant (defined maybe as <= $20m annual revenue). MegaCorp would have to bear this cost even if they won, meaning they could only sue little guys if it was really worth it. MegaCorp would pay the same amount they pay their attorneys into a trust managed by the court, which would allow the small defendant to select his own lawyers. This would ensure that both sides have equally-adequate representation.
A second solution is to lower the cost of litigation in general, which would be accomplished by de-formalization of the system and greater local sovereignty. Why does it have to take 10 years and $5 million to have a dispute settled? Companies are already trying to make something like this the de facto legal system by forcing arbitration against their helpless victims; arbitration might not be bad in theory, but under the current practice, it's an unnerving prospect, since you're going into a black hole.
Beyond the contractual method of handling attorneys fees, civil procedure rules deal with this situation: if a settlement offer of X is rejected, and the rejecting party ultimately wins an award of X-1, then they have to pay all of your legal fees. [0]
"I know what you're facing, Jeff. And, I think I know how you're feeling. In the Navy I flew A-6's off carriers. In combat, events have a duration of seconds, sometimes minutes. But what you're going through goes on day in and day out. Whether you're ready for it or not, week in, week out. Month after month after month. Whether you're up or whether you're down. You're assaulted psychologically. You're assaulted financially, which is its own special kind of violence because it's directed at your kids. What school can you afford? How will that affect their lives? You're asking yourself, "Will that limit what they may become?" You feel your whole family's future's compromised, held hostage. I do know how it is."
Not to mention:
"You fought for me? You manipulated me! Into where I am now - staring at the Brown & Williamson building, it's all dark except for the tenth floor. That's the legal department, that's where they fuck with my life!"
Big companies have virtually unlimited legal resources. Small companies don't -- lawyer time is very expensive for them. Anecdotally, it seems to cost around $5 million to mount a defense against a big public company in court.
BigCo's lawyers will file every type of complaint, motion, appeal, request, notice, stay and postponement possible in hopes of starving you out. You have to pay your lawyers for all the hours they spend just responding to frivolous and/or repetitious crap, which will end up being in the man-weeks before your first court date. You have to pay your lawyers to do all the pre-trial research, negotiation and strategizing, which costs will end up being in the man-months by the time you get to an actual court.
Once you finally do get to court, BigCo's $1000/hr law firm will mount very aggressive and convoluted legal arguments and attempt to mint new legal theories, because a) it greatly increases the complexity of the case, which means you're more likely to run out of money and concede to their client; b) their client doesn't care how much money the law firm is going to bill them, so the law firm is going to have a heyday and squeeze out every billable hour possible; and c) if the new legal theory actually works by some fluke of luck, both the firm and the attorneys directly involved in the case will get a big boost to their industry starpower. What does all this mean for the little guy that's being brought to court? It means your defense is going to cost you a lot of money.
There's also the possibility that the court will grant an injunction against your behavior while the issue pends, and if that affects the wrong thing, it's possible that your entire revenue stream will be destroyed and you'll either have to pivot on a moment's notice or just give up. Since these cases usually take years to see all the way through, you'll be out of business for quite a while, even if the court ultimately vindicates your position. Small companies can't afford to go without their revenue for years at a time.
For an example, refer to the case of Uzi Nissan, an IT technician who operated a computer repair business under his own name before Datsun rebranded to Nissan Motor. Nissan Motor drug him through an unsuccessful 9 year, $3 million saga to attempt to wrest the domain name from him. At the end of it, Nissan Motor was ordered to reimburse Mr. Nissan only $52k in legal fees, of the over $3 million Mr. Nissan was forced to spend, and Nissan Motor began pursuing a frivolous trademark filing so they could make a second attempt to steal the domain by use of legal force. [0]
Anyway, businesses can't be represented by an entrepreneur in court, they have to be represented by a member of the bar. If you can't afford to regularly refresh a 6-figure retainer as your lawyers fend off the vultures, you're basically SOL. You have to comply, or be sued. If you get sued and proceed without retaining good counsel, it's likely that you'll end up more FUBAR'd than you would've been if you had just complied with whatever the demand was in the first place. Compare Facebook, Inc. v. Power Ventures, Inc., where the entrepreneur had issues keeping counsel on board and ended up being held personally liable for $3 million in damages.
As such, if any big corp is able to identify things they don't like before those things have begun to generate dozens of millions in annual revenues (enough to semi-comfortably fork over $500k-$1m/yr for legal defense), they can pretty successfully sue them out of existence. This happens regularly, you just don't hear about it that often.
[0] http://www.digest.com/Big_Story.php