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Let's not make patent trolls stronger

Evan Schuman | Jan. 21, 2015
Bill proposed by National Retail Federation in the US wouldn’t shut them down, and it might simply legitimise them.

This change would enable letter recipients to say, "We don't even use that technology," said Beth Provenzano, an NRF VP of government relations and a co-chair of the Patent Reform Coalition. "It will take them [trolls] more research to send the letters in the first place and it will deter them from casting such wide nets."

The group is also pushing for a rule that trolls must complete litigation against manufacturers of products that allegedly use the patented technology before going after the manufacturer's customers. This is a good idea, given that the manufacturer is much more directly involved -- and therefore in the best position to argue whether or not a patent has been infringed. Put another way, if the troll can't make a case against the manufacturer, end users are off the hook, which makes sense.

The group wants trolls who lose to have to pay the victor's legal fees -- giving them an incentive to not pursue weak cases -- and a requirement that judicial hearings to evaluate the claims be held much earlier, before clients have to pay for discovery. In short, these efforts are designed to weed out trumped-up claims before companies have to spend money and time to go through the legal process. This will give companies -- in theory -- much less reason to just pay the license fee to make the hassle go away.

All of this comes with a huge risk, though. Many trolls hate to actually go to court, because many jurors and judges feel tremendous animus toward patent trolls. The preferred approach is to send threatening letters, knowing that a percentage of recipients will simply pay the license fee even if they have not done anything wrong. It's the ultimate nuisance lawsuit.

A troll that complies with these new requirements -- assuming the NRF can push its ideas through Congress and get them signed into law -- will actually be on stronger legal ground. Instead of banning this practice, it codifies and legitimizes it.

Provenzano argued that "it's very hard to define a patent troll. It's gets pretty tricky." The problem with that is that, in the NRF's own statement trumpeting the coalition's creation, it crafted a pretty decent definition: "Patent trolls are firms that buy overly-obscure, general or vague patents with the sole purpose of extracting licensing arrangements and settlement payments by threatening businesses and companies with claims of patent infringement. The threats often involve opaque claims regarding common practices, services or technology. The trolls' hope is that businesses would rather settle or pay a licensing fee instead of hiring attorneys to review infringement claims or fight back in court."

 

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