US House approves bill to limit frivolous patent lawsuits

[JURIST] The US House of Representatives [official website] on Thursday approved a bill [HR 3309, PDF] intended to curb the actions of "patent trolls" [Filament backgrounder], or patent assertion entities, in which companies frivolously accuse other companies, often small business owners, of patent infringement in effort to collect licensing fees. The bill, also referred to as "the Innovation Act," promotes transparency and accountability in the often-abused process by requiring that the accusing party provide specific details on the allegedly infringed patent and its use. The bill was overwhelmingly approved by the House with a vote of 325 to 91. A Senate panel is scheduled to consider a similar measure on December 17.

"Patent trolls" have been a controversial [Patently-O report] subject for the US patent system to address. Noted patent holding companies include Intellectual Ventures and Asure Software [corporate websites]. Many patent holding companies generate their revenue solely by suing other companies for patent infringement and do not produce anything of their own. The America Invents Act was passed in 2011 to address the "patent troll" problem by decreasing the number of "junk" patents [JURIST report] that are issued via increasing funding to the USPTO and allowing third parties to submit relevant materials during the patent review process. Patent litigation by and against patent holding firms has been especially rampant in the mobile phone business. Also in 2011, Google purchased 1,023 patents from IBM [corporate websites] in order to defend itself against smartphone patent-infringement lawsuits [Bloomberg report]. Earlier that month Google also purchased Motorola [corporate website] for USD $12.5 billion, primarily for Motorola's patent library [GeekWire report]. Other recent patent reform includes separate rulings by the US Supreme Court [official website] in June that patents will only be invalidated if the challenging party meets the "clear and convincing evidence" standard [JURIST report] and that the Bayh-Doyle Act [35 USC §§ 200-212], which vests patent rights to universities for inventions from federally funded research, did not give Stanford University [academic website] superior rights to the invention of its employee [JURIST report].

 

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.