Patent News

Apr. 8, 2014

IP Watchdog: Myths of the Patent Wars: An “Explosion Of Patent Litigation” Greater Than Any in History? , by Gene Quinn

This post originally appeared in IP Watchdog on April 8, 2014.

Four months ago, the House of Representatives passed the “Innovation Act” (H.R. 3309), which would impose sweeping changes to U.S. patent law and the judicial system. Now, as the Senate prepares to act on its own patent reform measure, the “Patent Transparency and Improvements Act” (S-1720), it’s more important than ever that we try to separate fact from the various fictions driving this unprecedented rush to alter a patent system that for 224 years has been vital to U.S. competitiveness and economic growth.

It is a glaring fact that patent trolls extort businesses and harm the patent system, and that measures to curb their extortionist behavior are needed. The lawsuits they file (or threaten to file) against small businesses are designed to extort nuisance settlements that are less than the cost of litigation and are called “strike suits” in legal parlance.

Strike suits are actually nothing new in American courts. Similar suits are filed every year by “ambulance chasers” in the personal injury field as well as by abusive litigants in the product liability and shareholder rights arenas. In fact, personal injury and product liability suits outnumber patent suits by roughly 10 to 1 in any given year.

Patent troll suits, however, generate far more public outrage that those in other arenas of law. This is likely due to the (accurate) perception that these trolls are corrupting a vital and venerated American social compact to promote innovation and progress by granting to inventors the exclusive right to profit from their inventions for a limited time.

To address these problems, the legislatures and attorneys general of nearly a dozen states have filed suits against trolls under existing state consumer protection laws or passed new laws against the deceptive practices used by trolls to extort nuisance settlements from businesses. The federal government has also undertaken a series of White House and USPTO initiatives to curb patent litigation abuse and strengthen the patent system. These encourage the greater use of crowdsourced prior art and promote better training for examiners.

But in view of many experts, including retired Chief Judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, the effort to curb bad actors in the legislative arena is being “hijacked” by a small handful of very powerful global technology companies intent on forcing much broader changes in the patent system to make it better serve their business interests.

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