A new
bill introduced in the House of Representatives attempts to deter frivolous patent litigation. The bill would force unsuccessful patent plaintiffs to cover defendants’ legal costs according to Daily Wireless. Introduced by Rep. Peter DeFazio (D-OR) and co-sponsored by Rep. Jason Chaffetz (R-UT), the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act is limited to patents related to computer hardware and software.
“Patent trolls don’t create new technology and they don’t create American jobs,” DeFazio said in a news release. “They pad their pockets by buying patents on products they didn’t create and then suing the innovators who did the hard work and created the product.”
The article explains that patent trolls often buy broad patents. The purchase allows them to file flimsy lawsuits against multiple companies for infringement. Despite very thin evidence to back their lawsuits, companies are often forced to settle. They settle because going to court can easily cost over $1 million in legal costs even if the company prevails, explained DeFazio in a press release.
Loser pays
The Electronic Frontier Foundation explains the idea behind the SHIELD Act is simple. A plaintiff needs to believe that a defendant actually infringes a valid patent before it sues. If it doesn’t, then the plaintiff could be on the hook for the costs of litigation. They would also have to cover the winning party’s attorneys’ fees (which can cost hundreds of thousands of dollars in some cases).
Fee shifting, often called “loser pays,” is not a new idea. It’s long existed in copyright law, it allows a court to award the winning party costs and fees in certain cases. In patent litigation, the EFF says this type of provision would help tilt the playing field slightly more in favor of the good guys. Fee shifting would empower innovators to fight back while discouraging trolls from threatening lawsuits to start.
The EFF has set up a website defendinnovation.org to lead the battle against patent trolls and reform the U.S. Patent Office.
rb-
Sigh – Today is primary election day here in the U.S. and I just got back from voting and a whopping 417 people in my neighborhood had voted. There are almost 17,000 people 18 years or old.
Voter apathy has everything to do with everything about where the US is today, including patent reform. Who are the politicians going to listen to? I have covered the patent mess for a while here, here, here, and here. I doubt the political clout me and my 416 other neighborhood voters even matter when compared to the millions of dollars that Apple, Google, ATT, and the rest spend on lobbyists in Washington and Lansing to buy the legislation they want.
Have a nice day!
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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.
Study authors James Bessen and Michael Meurer also found that the patent troll costs have escalated since 2005 when the study found a total of 1,401 claims were $6.6 billion in direct costs. The authors say increasing patent litigation in the U.S. is a significant tax on investment in innovation. To put the figure into perspective the total U.S. spending on research and development is $249 billion in 2009 but it is still a big tax.
