End to Patent Trolls

Maybe you’ve heard the term “patent trolling” before, but it may be put to rest soon.

Patent trolling is an activity in which companies (also called non-practicing entities, or NPEs, because patent trolling is their only activity) buy up patents merely for the purposes of extracting licensing fees from companies using the patents’ technologies. They then file lawsuits or, even worse, merely threaten to do so unless they are paid off.

The lawsuits haven’t been confined to actions against big corporations in technology; they’ve attacked mom-and-pop businesses, including restaurants, real estate agents, and supermarkets. In effect, it’s legal extortion.

Last week the House passed the Innovation Act of 2013 (H.R. 3309) by an overwhelming margin of 325 to 91. If the bill is finally enacted, it would make changes in current law, such as:

  • Requiring specificity by litigants on how they were injured by alleged infringement
  • Requiring litigants to name who has a financial interest in the patent that’s allegedly being infringed
  • Delaying discovery (which is very costly to businesses being sued) until after a court has reviewed the claims so that frivolous ones can be dismissed

A measure that would have required losing litigants to pay court costs for winning defendants did not make it into the final version of the bill.

Will it pass?
The Senate has yet to vote on the measure (its own quite different version in S. 1720). Hearings in the Senate Judiciary Committee are scheduled to begin on December 17 (just before the Senators leave Washington for the holidays), so there is little time to complete action in this session of Congress. The 2nd session of the 113th Congress begins on January 7, 2014.

There is strong support for the measure, including support from Google, the National Retail Federation (NRF) and the Consumer Electronics Association. The White House is also in favor of the measure.

I’m in favor of any law that helps to limit frivolous lawsuits targeting vulnerable small businesses.

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One Response to “End to Patent Trolls”

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