Patent trolls and abusive patent litigation have increased in recent years, but Congress and commerce are fighting back.
Abusive patent lawsuits have been making headlines this year, in addition to prompting pending legislation in the U.S. Senate and House of Representatives. According to PricewaterhouseCoopers' report on patent litigation, abusive patent lawsuits accounted for 67 percent of all patent lawsuits in 2013, a significant increase from 28 percent just five years prior.
Those filing these abusive lawsuits are often referred to as "patent trolls," or companies that control patents but don't use them to manufacture a product or contribute to commerce. Instead, they make money by filing patent lawsuits against other parties, typically small businesses. Fearing litigation and the high costs associated with it, these parties choose to settle and pay damages to the patent holders.
Eliminating bad patents to stop litigation
Small businesses are fighting back against patent trolls and bad patents. One method available for this exists outside of the litigation system. Through the U.S. Patent and Trademark Office, you can challenge the validity of the patent itself. This process is called post-grant review, and can be a powerful tactic to fight against "bad patents," or patents that the PTO should not have initially granted to that party. If that patent is successfully eliminated, so are any pending lawsuits associated with it.
Regulating litigation through the proposed Patent Act
As for pending legislation, the Senate Judiciary Committee approved a version of the Patent Act, which offers additional protection for businesses by making filing lawsuits more difficult for patent owners. Specifically, as it stands currently, the bill will accomplish the following:
- Increase the requirements for filing a patent lawsuit, such as requiring plaintiffs to clearly state how they think the patent is being infringed upon.
- Limit the amount of discovery that each side must do to provide relevant evidence. This is a benefit to smaller businesses, who often settle because they can't afford the costs associated with extensive discovery.
- In some conditions, requires the loser of a patent suit to cover the winner's legal fees, thus deterring patent trolls from filing suits they will lose at trial.
The bill is currently under debate in the Senate, and a similar bill, the Innovation Act, is circulating in the House. The Innovation Act, although voted down in the Senate last year, has been revamped and reintroduced in 2015.
Looking to the future, protecting your rights
No matter how Congress decides upon current legislation, it is clear that patent trolls and abusive patent lawsuits are receiving the concern and attention they warrant. These cases have been increasing at an alarming rate since 2007. And, according to PwC, 2014 data shows an increase of 13 percent of filed patent cases from the year before. With any luck, this trend will continue.
If your company has received threatening letters regarding patent infringement, or is facing an abusive patent lawsuit, it is vital to fight back. You can defend your rights and protect your interest with help from an experienced intellectual property attorney.
Keywords: Patent trolls, patent litigation, abusive patent lawsuits, bad patents