President Barack Obama's administration announced on Tuesday, June 4, a series of "five executive actions and seven legislative recommendations" intended to combat the rampant instances of "patent trolls," as the fact sheet released by the White House Tuesday morning refers to them. Not only is Obama's announcement welcome progress on the issue of patent litigation itself, but it also serves as a promising opportunity for bipartisan success in Congress, should the House and Senate take Obama's recommendation and act.
"Patent trolls" are companies that do not deal in products, but rather in patents. They issue patent licenses and sue for infringement on those patents. These lawsuits, especially numerous and troublesome in the technology sector, cost billions of dollars and stifle innovation. A 2012 study found that "trolls are costing the economy $29 billion a year in direct costs" and another found $83 billion annually in indirect costs. Some patent trolls sue for infringement with the simple intent of a settlement, not even making it to court. Still further, some simply threaten lawsuit in order to receive a settlement. This patent bullying, as it seems, is wasting money and leaving some too fearful of lawsuit to spur further innovation.
This isn't the first time the president has voiced his opinion on the issue. Back in February, Obama called out patent trolls, saying, "They don't actually produce anything themselves. They're trying to essentially leverage and hijack someone else's side and see if they can extort some money out of them."
Among the actions and recommendations released by the White House Tuesday are measures to make it harder for patent trolls to hide behind the shell companies they establish for the sole purpose of litigation, giving district courts "more discretion in awarding fees to prevailing parties in patent cases," creating restrictions to combat "patents with overly broad claims" and others intended to curb frivolous patent litigation.
Not everyone greeted the president's announcement with a positive outlook. Timothy Lee, for the Washington Post, posits that "trolls are just a symptom of the patent system's problems" and that "it might be more productive to focus on reforms to fix the patent system itself."
Still, any progress on the issue is welcome. And more promising is the view that new patent legislation is likely to pass through Congress at a time when even the most straightforward bills get bogged down in partisan gridlock. Two bills on the issue have already begun making their way through the legislature; Rep. Peter DeFazio and Rep. Jason Chaffetz introduced a bill in February, and House Judiciary Committee Chairman Bob Goodlatte and Senate Judiciary Committee Chairman Patrick Leahy put together a draft proposal that seems to have the best shot at passing.
Should Congress follow through on Obama's recommendations and their own legislation currently in the works, progress may finally be made against these excessive and ludicrous patent lawsuits that plague the economy. Yes, the patent system likely requires further reform and more can always be done, but these days anything encouraging out of Washington is a step in the right direction.