White House Goes After Patent Trolls

The Obama Administration has issued three new executive actions in order to combat the patent troll problem. Although pejoratively referred to as trolls, patent assertion entities (PAEs), are a problem that needs to be dealt with sooner rather than later.

Essentially what these patent trolls do is obtain patents without intention to manufacture anything with them. They do this in order to bring about infringement lawsuits to collect easy money. These patent trolls use the patent system as a form of business strategy that can be detrimental to the economy and innovation. Patent trolls do not just target big businesses but small firms as well. The costly litigation and possible settlements that come from these infringement lawsuits eventually will bankrupt some of those small firms. While the trolls invoke obvious financial harm, they will significantly hinder innovation in most industries.

A recent White House reportfrom June 2013 states that “Suits brought by PAEs have tripled in just the last two years, rising from 29 percent of all infringement suits to 62 percent of all infringement suits. Estimates suggest that PAEs may have threatened over 100,000 companies with patent infringement last year alone.”

On February 20th 2014 The White House issued the three new executive actions: Answering the President’s Call to Strengthen Our Patent System and Foster Innovation.

1.      Crowdsourcing Prior Art– The first executive action to help deal with this problem of patent trolling by “expanding ways for companies, experts, and the general public to help patent examiners, holders, and applicants find relevant “prior art”—that is, the technical information patent examiners need to make a determination of whether an invention is truly novel.”

2.      More Robust Technical Training and Expertise– Specifically the United States Patent and Trademark Office(USPTO) is “expanding its Patent Examiner Technical Training Program to help patent examiners keep up with fast-changing technological fields by making it easier for technologists, engineers, and other experts to provide relevant technical training and guidance to patent examiners.”

3.      Patent Pro Bono and Pro Se Assistance– The administration wants toincrease the accessibility of the patent system. The USPTO will “dedicate educational and practical resources to assist inventors who lack legal representation, appoint a full-time Pro Bono Coordinator, and help expand the existing America Invents Act pro bono program to cover all 50 states”.

Several leading advocates in patent reform including Katie McAuliffe from Digital Liberty, recently sent a coalition letterto Chairman Leahy and Ranking Member Grassley of the Judiciary Committee. The authors of this letter understand that the driving force for change is the need to reform the abusive litigation practices that are becoming rampant. The letter also details their three suggestions for. These reforms include balanced fee shifting, heightened pleading standards, and reforming the discovery process so time and money are no longer wasted. These kinds of changes are essential in preserving “incentives for innovation and the integrity of patent ownership”.

In January, during his 2014 State of the Union, President Obama urged for patent reform saying “let's pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation”. These executive actions are steps in the right direction. The next move has to be bi-partisan work in Congress in order to pass meaningful legislation that can be signed into law.