A piece of legislation is being considered on Capitol Hill that would limit the number of times a year a "non-practicing entity" can sue a tech company such as Google and Apple. This legislation was introduced by Oregon Democrat, Representative Peter DeFazio, which is aimed at hurting "patent trolls" by allowing judges to force such firms to pay the legal fees of companies they unsuccessfully sue. Mark Chandler, general counsel for Cisco Systems, testified saying that Cisco supports this legislation given the $50 million a year they spend on fighting lawsuits fighting companies that do not make or sell anything. However, several lawmakers were worried at the prospect of non-practicing entities needing to pay the legal bills if they lose infringement lawsuits. John Conyers, a Michigan Democrat, stated that they "have a measure before us
that the plaintiff pays and the defendant who might be an alleged patent
infringer pays nothing. This is disturbing." Non-practicing entities sued 5,570 defendants in 2011, which is twice as many as in 2009. Unlike previous years when these patent lawsuits focused on manufacturers, retailers, restaurants and other companies, these patent lawsuits are now including department stores like JC Penny that are forced to settle instead of fronting the cost of the legal fees. Forced to defend patents that cover drop-down menus of websites, gift card activating technologies, and mobile phone web browsing, patent litigation now accounts for about half of the total legal fees JC Pennny has to pay. They are now reluctant to buy any technologies from small companies that are incapable of defending infringement lawsuits.
http://www.mercurynews.com/business/ci_22792482/anti-patent-troll-bill-faces-questions-capitol-hill?source=rss
https://www.youtube.com/watch?v=-G2ZWBbhHSc
Thank you for the read Aviv. It is definitely interesting of how this is going to play out. I think it is a good progress in stopping all those lawsuits. Only time will tell though and hopefully DeFazio will go through with it.
ReplyDelete@James, once again, it's time that this type of reform and regulation be applied to the patent system. Holding NPE's accountable is one of the biggest obstacles facing the patent system today. The passage of this legislation could change the conversation for the better and create more regulatory efficiencies in our patent system that limits the non contributors.
ReplyDeleteShould reduce the friction in innovation - sounds good to me!
ReplyDelete