Predatory ‘patent trolls’ could soon find it harder to operate in the United States. Legislation to curb frivolous patent lawsuits has regained momentum after lawmakers in the US Senate added a provision to stop university patent holders from being penalized along with the trolls.
The process is moving quickly. The Senate Judiciary Committee plans to vote on the bill by the end of the month, readying it for a final Senate vote this summer, and the House of Representatives’ Judiciary Committee is likely to vote this week on a similar measure. That gives observers optimism that Congress will finally enact patent-troll legislation after a failed effort last year. “The Senate version really does seem to be hitting some sort of sweet spot,” says Arti Rai, co-director of the Duke Law Center for Innovation Policy in Durham, North Carolina.
Patent trolls are ‘non-practising entities’ that accumulate patents with no intention of turning the inventions into marketable products. Many of these firms exist solely to enforce their patents, threatening other companies with lawsuits if they are not paid handsome licensing fees. The legal strategy is often a low-risk endeavour, because many patent trolls are shell corporations that are only loosely affiliated with larger firms — and so do not have the financial assets that would support large awards to opponents should they lose a suit.
Congress, urged on by lawsuit-weary high-technology companies and the administration of US President Barack Obama, is trying to fight these kinds of trolls. Non-practising entities filed 63% of all US patent-infringement lawsuits in 2014, and cost operating companies an estimated US$12.2 billion in legal fees, settlements and judgments, according to RPX, a consultancy in San Francisco, California.
But is proposed legislation enough?
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