Judge Finds ‘Stupid Patent’ Web Story is Protected Speech

SAN FRANCISCO (CN) – An Australian court can’t make a California-based digital rights watchdog take down a web article that mocks a company’s patent as “stupid,” a federal judge ruled Friday.

San Francisco-based Electronic Frontier Foundation sued Global Equity Management (SA) Pty Ltd., or GEMSA, in April, claiming the Australian firm exploited its home country’s weaker free speech protections to secure an unconstitutional injunction against EFF.

Kurt Opsahl, EFF’s deputy executive director and general counsel, hailed the ruling as a victory for free speech.

“We knew all along the speech was protected by the First Amendment,” Opsahl said in a phone interview Friday. “We were pleased to see the court agree.”

Opsahl said the ruling sends a strong message EFF and other speakers can weigh in on important topics, like patent reform, without fear of being muzzled by foreign court orders.

The dispute stems from an article EFF published in June 2016, featuring GEMSA in its “Stupid Patent of the Month” series. The GEMSA patent is for a “virtual cabinet” to store data. In the article, EFF staff attorney Daniel Nazer called GEMSA a “classic patent troll” that uses its patent on graphic representations of data storage to sue “just about anyone who runs a website.” The article also says GEMSA “appears to have no business other than patent litigation.”

In October 2016, GEMSA obtained an injunction from the Supreme Court of South Australia ordering EFF to take down the article and cease publishing any further content on GEMSA’s intellectual property.

On Friday, U.S. District Judge Jon Tigar granted EFF’s motion for default judgment, declaring the Australian court’s injunction unenforceable in the United States and “repugnant to the United States constitution.”

“The broad context of the article is clearly opinion, as it is a part of EFF’s humorous and pointed ‘Stupid Patent of the Month’ series,” Tigar wrote in his 18-page ruling. “EFF would not have been found liable for defamation under U.S. and California law.”

Tigar found the U.S. SPEECH Act of 2010 protects Americans from foreign judgments that restrict speech if those rulings would fail to hold weight under U.S. law.

“The U.S. and California would provide substantially more First Amendment protection by prohibiting prior restraints on speech in all but the most extreme circumstances, and providing additional procedural protections in the form of California’s anti-SLAPP law,” Tigar concluded in his ruling.

Opsahl said a case like this underscores “the very purpose of the SPEECH ACT” – to deter “defamation tourism,” a practice in which entities obtain injunctions that would not be allowed under U.S. law by litigating in countries with weaker constitutional safeguards.

Had the Australian injunction been allowed to stand, Opsahl said EFF and other American speakers would “have to worry that even if what you’re doing is completely protected under the U.S Constitution, that someone could turn to a law anywhere else in the world, find something more restrictive and use it to get an unconstitutional restriction.”

Tigar also invalidated the Australian court order on separate grounds, finding that EFF was never properly served with notice of the Australian lawsuit under the rules of the Hague Convention, to which both the U.S. and Australia are signatories.

GEMSA never defended itself against EFF’s complaint, but Tigar found the company had no excuse for its absence because it was properly served and litigates other patent suits in the Northern District of California.

“GEMSA has demonstrated that it knows how to sue EFF in Australian court, how to litigate against others in this court, including regarding the patent at issue, has been properly served, and failed to enter any appearance, including to contest service or jurisdiction,” Tigar wrote.

Opsahl said Tigar’s ruling removes a cloud that was hanging over EFF because GEMSA had threatened to use the injunction to get its “Stupid Patent of the Month” webpage de-listed through web search services like Google.

“Now we have the order declaring this unenforceable in the U.S. so we could show Google that order,” Opsahl said.

GEMSA did not immediately respond to an email seeking comment Friday afternoon.

 

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