US Congress to consider law against 'patent trolls'
Patent trolls are said to manipulate the system solely for financial gain, not to protect innovation. Photo: Simon Letch
The US Congress to soon review the behaviour of "patent trolls", a widespread practice some say is crippling innovation in the US and overseas.
A US congressman, who has led the charge against frivolous patent infringement lawsuits, introduced a bill on Wednesday to curb the behaviour of so-called trolls but faced criticism that some of the proposals go too far.
The bill from Representative Bob Goodlatte, chairman of the House Judiciary Committee, requires companies to provide specific details on what patent is infringed and how it is used when they file a lawsuit.
It also requires judges hearing patent cases to award fees to the winner in an infringement lawsuit, unless the judge decides that the loser's position was "substantially justified" or some other circumstances exist.
Goodlatte, a Virginia Republican, is working on the bill with his counterpart on the Senate Judiciary Committee, Vermont Democrat Patrick Leahy. Leahy indicated his legislation would be ready soon.
The White House urged Congress to take steps to curb abusive patent lawsuits in June. Other proposals are circulating on Capitol Hill, as well as a proposed study of "patent assertion entities" (PAEs) by the Federal Trade Commission.
PAEs or 'patent trolls' are companies that typically do not invent or manufacture products. Their business model is to buy the intellectual property of others and seek money from firms that may infringe those patents.
Last year, trolls accounted for the majority of patent lawsuits in the US according to Colleen Chien, a law professor at Santa Clara University.
Goodlatte's bill was welcomed by retailers, some of whom have been targeted with demands for licensing payments on technology like Wi-Fi.
"Traditional brick-and-mortar merchants and e-commerce companies alike have had to deal with a growing number of patent troll lawsuits over the last few years," said David French, a lobbyist for the National Retail Federation.
The legislation would allow high tech companies to jump into lawsuits filed against their customers. This means that a company that makes Wi-Fi equipment could defend a bakery accused of infringing Wi-Fi patents by simply installing a router.
Among the more controversial parts of the legislation is a section allowing an expanded review of business method patents, which are most often used to use to sue for infringement.
The bill would allow financially oriented, business method patents to be given a second look by the US Patent and Trademark Office to determine if they are valid or not. Litigation can be stayed during that process.
Internet companies largely supported the bill, and the effort is backed by Cisco Systems, Apple, Google and other technology powerhouses. Some of the largest patent disputes of recent times have come from technology companies such as Apple, Samsung, Microsoft and Nokia.
Tech giants have also made their own efforts to reform the patent system, with a lobbying website launched last year.
Still, some worried that the patent review process might go too far. "We are for a lot of changes that curb abusive litigation but we are not for undermining the patent system," said Tim Molino, director of government relations at BSA The Software Alliance, an organisation funded by technology companies and primarily concerned with policing software licensing.