Washington

Patent Trolls Beware: New Bill Introduced

More legislation to combat frivolous suits is on the way 11/18/2013 04:39:40 PM Eastern

Patent "trolls" hiding under the bridge to the future are taking more fire from the Hill.

As promised, a bipartisan bill backed by Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Senator Mike Lee (R-Utah), the Patent Transparency and Improvement Act of 2013, was introduced to help customers "improperly" targeted in patent suits against companies by staying the case against them to be stayed while the manufacturer litigates. It would also try to stem the frivolous demand letters and help out small businesses targeted for suits.

That includes requiring plaintiffs to disclose the beneficial owners (real parties in interest) and inform the Patent And Trademark Office when a patent has been transferred.

It would also make it clear that misleading demand letters--demanding compensation for use of the patent at issue--could be targeted by the Federal Trade Commission.

To check out a summary of the bill, go here.

The issue has been heating up on Capitol Hill lately.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) last month introduced his patent litigation reform bill, the Innovation Act (HR 3309), which cable operators were celebrating and pledged to help get passed. Goodlatte's office defined those trolls as "individuals taking advantage of gaps in the system to engage in litigation extortion." A similar Senate bill was introduced by Sen. Orrin Hatch (R-Utah), the Patent Litigation Integrity Act (S.1612)

Earlier this year, Sen. John Cornyn (R-Tex.) introduced the Patent Abuse Reduction Act, his own take on combating "abusive patent litigation" by "trolls."

Cable operators are among those who asked Congress to step in. The National Cable & Telecommunications Association praised the latest bill in a statement Monday (Nov. 18). "We congratulate Chairman Leahy and Sen. Lee on the introduction of bipartisan patent legislation, the Patent Transparency and Improvements Act of 2013," NCTA said. "As a growing chorus of interested stakeholders can attest, responsible legislative reforms to discourage unnecessary patent litigation are sorely needed so that American companies can focus on innovation, job creation and economic growth instead of frivolous litigation. We look forward to working with Chairman Leahy and Sen. Lee and other members of the committee as they work on legislation that will dissuade patent trolls from engaging in such strategic behavior."

Also earlier this year the president issued an executive order outlining steps to try to curb frivolous patent suits. Those included requiring patent applicants to identify the ultimate corporate owner (real party in interest) of a patent and asking Congress to come up with legislation.

Broadcasters were celebrating potential patent reform as well.

"NAB thanks Chairman Leahy and Senators Lee and Whitehouse for their leadership in introducing the Patent Transparency and Improvements Act, legislation designed to combat 'patent trolls' that are a drain on both the U.S. economy and the broadcast industry," said National Association of Broadcasters President Gordon Smith in a statement. "This legislation deters those entities that acquire patents primarily as a litigation tool while protecting the true innovators who keep our economy moving forward. We look forward to working with these lawmakers and other patent reform advocates on legislation that supports a sensible patent system."

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