Congress Aims to Limit Patent Lawsuits

Congress Aims to Limit Patent Lawsuits

Patent lawsuits have been steadily increasing in recent years — to the point where they have taken center stage in a recent series of congressional initiatives. In a rare show of bipartisanship, the U.S. House of Representatives recently passed a bill that aims to install protections against so-called “patent trolling.”

How patent trolling works

Patent trolls function by acquiring patents from various sources. They tend to target companies that are in dire financial straits, companies that have performed research on a new technology they don’t intend to develop or individuals who cannot afford to carry on the development of their patented idea. The trolls then wait for another individual or company to create a market for the patented idea and demand a licensing fee from that individual or company under the threat of an expensive patent lawsuit.

The bill forwarded by the House requires more specific information to launch a patent lawsuit, since one of the reasons why patent trolling has been so successful in the past is that trolls can initiate a suit using extremely vague claims of infringement. This bill requires a much stronger statement of purpose on the part of the accuser. It also limits the informational requirement for accused violators. Patent trolls often file a vague lawsuit with the intent to gather more information from the accused party. Often, the trolls refrain from fully fleshing out their accusations until after they have filed suit, in the hopes of uncovering a more substantive claim.

In addition, the legislation allows large companies to come to the aid of small businesses and individuals who have been targeted by patent trolls. This serves to discourage patent trolls from launching frivolous lawsuits against individuals they might otherwise see as easy targets.

Finally, judges have more authority to require plaintiffs to pay the defendant’s legal fees if the case is dismissed. This increases the financial burden on patent trolls and aims to encourage the more honest use of patent lawsuits.

If you have questions about the new legislation related to patent trolling and how it might affect your business, speak with a Houston commercial litigation attorney.

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