Iowa Intellectual Property Blog
Curbing patent trolls
Mar. 12, 2013 – Janet E. Phipps Burkhead, Iowa Intellectual Property Blog
Curbing litigation brought by “patent trolls” has been a hot topic. “Patent trolls” or Non-Practicing Entities (NPEs) are patent owners that are not the inventor or original assignee of a patent and seek to enforce a patent through litigation tactics that seek an early and profitable settlement and then move on to the next alleged infringer. In many cases, the NPE is suing multiple entities at one time, generally smaller businesses who settle to avoid costly litigation.
On February 27th, a proposed bill was introduced in Congress to curb such tactics by NPEs. If passed, the SHIELD Act, H.R. 845, would significantly reduce litigation by NPEs. The bill would require NPEs to pay the entire litigation costs, including reasonable attorneys’ fees, if the NPE fails to prove is patent is valid and infringed. The bill also requires that for the NPE plaintiff to bring a lawsuit, it has to show that it is either a university, the original inventor of the patent, or a company that is making a substantial investment in the commercial exploitation of the invention covered by the patent.
Although the bill may not be the perfect solution in stemming the unnecessary litigation brought by NPEs, it sends a strong message to NPEs that there is bipartisan support in Congress to address the tactics used by NPEs to extort money from businesses.
If you have questions about patent litigation or other intellectual property matters, please contact Janet Phipps Burkhead at 515-246-4531 or firstname.lastname@example.org