The White House on Tuesday announced a number of “sweeping reforms” aimed at patent trolls, or firms that collect software patents, usually for the sole purpose of aggressively suing infringers despite their lack of interest in entering the market themselves.
According to a White House press release, the patent reforms offer a number of ways to curb excessive litigation, and include five executive actions and seven legislative recommendations that address the common legal issues that arise between patent holders and licensees.
In February, President Barack Obama was asked about patent litigation during a Google+ Hangout; he said his administration had begun a process of patent reform, passing “some legislation that made progress on some of these issues,” but admitted that it wasn’t enough, as those laws had not “captured all of the problems.”
“They don’t actually produce anything themselves,” Obama said of patent trolls. “They’re just trying to essentially leverage and hijack someone else’s idea and extort some money out of them. Sometimes these things are challenging because we also want to make sure the patents are long enough, that people’s intellectual property is protected; we need to balance that with making sure they’re not so long that innovation is reduced, but I do think that our efforts at patent reform only went about halfway where we need to go. What we need to do is pull together additional stakeholders and see if we can build some additional consensus on some smarter patent laws.”
Many technology companies have spoken out against patent trolls. Jeff Bezos, founder and CEO of Amazon.com, told UK-based Metro in October that the patent system is being severely abused.
“Patents are supposed to encourage innovation and we’re starting to be in a world where they might want to stifle innovation,” Bezos said. “Governments may need to look at the patent system and see if those laws need to be modified because I don’t think some of these battles are healthy for society.”
In an academic paper written by Santa Clara University law professor Colleen Chien, 40 percent of respondents said patent trolls caused “significant operational impact” on their fledgling businesses' ability to hire or grow. Since the cost of going to court is too high, even though many cases are unsuccessful, most patent lawsuits never reach the courtroom since businesses find it less risky and less expensive to simply settle. As if it wasn’t difficult and expensive enough to start a business, let alone pay for your self-defense in court.
The White House’s plan to refine the broken patent system would require patent holders and applicants to specify who truly owns and controls the patent, as well as offer better protections for business owners against patent infringement and litigation. Patent applicants and owners would also be required to update their ownership information when they are involved with the Patent and Trademark office, which will begin rulemaking on the issue and also distribute educational materials to help consumers and businessmen continually targeted by patent trolls.
“We want to protect privacy, we want to protect people’s civil liberties, we want to make sure the Internet stays open… we also want to make sure that people’s intellectual property is protected, whether it’s how we’re dealing with copyright, how we’re dealing with patents, how we’re dealing with piracy issues,” Obama said in his Google+ chat. “What we’ve tried to do is be an honest broker between the various stakeholders and continue to refine it.”