The Nebraska attorney general can’t bar a Texas law firm from litigating patent cases in the Cornhusker State on behalf of a Florida company, a federal judge has ruled.
U.S. District Judge Joseph Bataillon ruled Monday in Omaha that Nebraska Attorney General Jon Bruning violated the constitutional rights of Activision TV by issuing a cease-and-desist order preventing the Farney Daniels law firm from pursuing Nebraska patent infringement cases on its behalf.
In July, the Attorney General’s Office issued an order it said was aimed at curbing the activities of companies that own seemingly innocuous technology patents embedded in computer programs and electronic devices, then sue unsuspecting end users. Farney Daniels is a major patent-enforcement firm nationwide and was barred from representing Activision TV by the order.
Activision TV developed digital-display technology and this year sued Lincoln-based Pinnacle Bank, saying screens in the bank infringe on its patents.
The Monday ruling found Activision’s rights were violated under both the U.S. Constitution and federal patent law, Activision said. The Attorney General’s Office characterized the ruling as preliminary.
“Activision’s First Amendment rights are being violated, and it is questionable whether the attorney general has the right to maintain the cease and desist order,” the federal court ruling said. “The court is deeply concerned about the ability of the attorney general to issue cease and desist orders, prior to the conclusion of the investigation, prior to any negative findings, prior to any hearings, and prior to permitting submission of documents and evidence by the Farney Daniels law firm.”
Bruning said in a statement that his office plans to continue investigating some patent-owning companies and their law firms. So-called “patent trolls” are the subject of much debate in Congress, where business lobbies are attempting to curb their activities, which critics say are aimed at springing lawsuits on companies and persuading them to pay settlements to avoid court trials.
“Nothing in the judge’s order stops our ongoing investigations into patent trolls and law firms that represent them, specifically Farney Daniels,” Bruning said. “Yesterday’s procedural order addressed a relationship between Farney Daniels and their client Activision.
“This is a limited issue that has no bearing on our patent troll investigation going forward. We will continue to work with other states to investigate the baseless harassment perpetrated by patent trolls.”
Farney Daniels said it isn’t backing down, either.
“We are pleased that the court concluded in this order that the attorney general of the State of Nebraska lacked evidence of any wrongdoing, and lacked any basis to interfere with federal patent matters,” attorney M. Brett Johnson of Farney Daniels said in a statement. “The actions of our firm on behalf of every client are lawful, fair and fundamental to the enforcement of federal law.”