Nyemaster Goode, P.C.

Obama Taking on Patent Trolls

By Wendy Marsh

In a statement released by the White House on Tuesday, President Obama issued five executive actions he will be taking against companies that collect patents for the sole purpose of licensing them and suing other companies that may or may not be violating them.  These so-called "patent trolls" have been filing an increasing number of patent infringement law suits and, in 2012, were estimated to be responsible for over 60% of all patent litigation. 

In an effort to deter questionable lawsuits, the Obama administration announced it would direct the U.S. Patent and Trademark Office (USPTO) to start a rule-making process aimed at requiring patent holders to disclose the owner of a patent.  Patent trolls have frequently been forming shell companies as a means of hiding the identities of the actual owners of the patents claimed to have been infringed.  In addition, the administration will ask Congress to pass legislation to allow sanctions on litigants who filed patent infringement lawsuits deemed abusive by courts.  Further, President Obama said he would direct the USPTO to train examiners to scrutinize applications for overly broad patent claims as a means of preventing improper patents from issuing in the first place.  The other announced actions revolved around improved education and training for citizens, entrepreneurs, and USPTO workers, and ensuring that the U.S. International Trade Commission's power to bar the importation of goods to the U.S. is proper and the process behind that action is "transparent, effective, and efficient." 

The technology industry has consistently voiced its dislike for patent trolls, noting that the trolls generate revenue through the use of overly broad patents, while also stifling innovation.  The Internet Association applauded the announcement by the White House, echoing the president's call for legislation, "to put patent trolls out of business for good."  In a written statement, The Internet Association noted, "As the president said, patent trolls are nothing more than extortionists, abusing the court system to shake down innocent inventors, entrepreneurs and end users."


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