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Obama takes action to curb frivolous patent lawsuits

Reuters/ AFR | June 5, 2013
US President Barack Obama took steps on Tuesday intended to curb lawsuits brought by companies and asked for new federal regulations and action from Congress.

Obama takes action to curb frivolous patent lawsuits
White House press secretary Jay Carney holds up a folder with an image of a troll and the words “innovation, not litigation” on Tuesday, as the Obama administration takes action to limit frivolous patent lawsuits. Photo: AP

US President Barack Obama took steps on Tuesday intended to curb lawsuits brought by companies, disparagingly called "patent trolls", that make or sell nothing but specialise in suing others for infringement, and he asked for new federal regulations and action from Congress.

The offensive, announced ahead of an Obama fund-raising trip this week to Silicon Valley in California, came as US lawmakers and courts look for ways to reduce the number of unwarranted patent lawsuits.

Such lawsuits have ballooned in recent years, particularly in the technology sector, from companies that buy and license patents from others, including individual inventors.

Critics say those patent portfolios are assembled as a springboard to litigation; many firms argue they are providing a service to inventors or protecting against the loss of licensing fees that users of the patents should pay.

Cisco Systems, Apple, Google and other big technology companies have been pushing for legislation that would reduce the number of times each year that they are sued for infringement.

Among other steps, the White House called on Congress to pass legislation to make it easier for a federal judge to award legal fees to the winner of a patent case if the judge deems the lawsuit abusive.

It also asked lawmakers to make it harder for companies to convince the US International Trade Commission to ban sales of products made with technology that infringes on a patent. Currently, the ITC has a lower standard for ordering an injunction than does a US District Court.

The disparity has led to a tidal wave of patent infringement complaints filed at the ITC.

Mr Obama asked lawmakers to require companies that sue for infringement to have updated ownership information on file with the US Patent and Trademark Office. He also urged the patent office, part of the Department of Commerce, to write a similar regulation.

The actions were aimed at improving incentives for high-tech innovation, a major driver of economic growth, the White House said. "Stopping this drain on the American economy will require swift legislative action, and we are encouraged by the attention the issue is receiving in recent weeks," White House spokesman Jay Carney said in a statement.

Companies specialising in patent litigation filed 2921 infringement lawsuits in 2011, which are the latest figures available, these cases comprised 62 per cent of all such cases filed, said Colleen Chien, who teaches patent law at Santa Clara University Law School, in a blog post for PatentlyO.

 

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