On June 4 2013, the White House released a memo detailing 7 legislative actions for Congress to take in order to tackle “Patent Assertion Entities” (PAE) or so-called ‘Patent Trolls’. The Administration is also going to take immediate executive actions designed to protect innovators from frivolous litigation and ensure the highest-quality patents in the American system.
Additionally, a report published by the National Economic Council and the Council of Economic Advisers takes the same position.
In 2011, the Leahy-Smith America Invents Act (AIA) was signed into law to make the patents system more efficient and reliable. Innovators continue to face challenges from ‘Patent Trolls’, that, according to President Obama “don’t actually produce anything themselves” and instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort money out of them”.
The memo outlines changes to bring much more transparency to patent disputes, including new PTO (1) rules that will require patent applicants and owners to provide accurate identify information.
The White House wants to condamn the cases of manifest abuses and helps the ITC (2) to get rid of an excessive files number.
Some highlights from the report include:
- Legal recommendations such as disclosure of “Real Party-in-Interest” when filing a patent claim.
- Make it easier for defendant companies that win patent suits to get attorneys’ fees.
- Changing the ITC standard for obtaining an injunction and better transparency to curb abusive lawsuits.
- Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.
Executive actions include:
- Tighten functional claiming: requiring patent applicants to explain their invention better and to limit those inventions to a specific way of accomplishing a task.
- Empower downstream users: ending the abuse associated with targeting end users, such as small business, startups, and even individuals who find themselves facing lawsuit threats.
According to President Obama and all the belligerents, these issues are crucial for the economy of America, American jobs and innovation.
(1) Patent and Trademark Office
(2) International Trade Commission
Sources: Fact Sheet: White House Task Force on High-Tech Patent Issues
– The White House June 4 2013.