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“Patent Troll” Bill Fails to Pass in Congress

On Wednesday, May 21, Congress rejected a bill that would have served to curb so called, “patent troll” lawsuits. “Patent troll” suits are usually brought by a company that patents a product with no intention of putting the product on the market. Rather, the company makes its money on the patent by enforcing its patent rights against infringers. The bill was meant to limit those companies, widely known as “patent trolls,” whose main business is to gather inactive patents, threaten infringement lawsuits against supposed violators and then offer to settle for less than the violator’s probable cost of defending an infringement lawsuit. “Patent troll” claims have been the subject of much litigation and controversy in recent times. In fact, it has been estimated that in 2012 “patent trolls” filed more than 2,900 infringement lawsuits nationwide (nearly six times higher than the number in 2006).

If passed, the bill would have made it tougher for “patent trolls” to file trivial lawsuits with an introduction of fee sharing. Fee sharing would require that the losing party to cover litigation costs for both sides – a potentially strong deterrent for “patent trolls.” Patent holders would also be required to state their accusations more explicitly. One of the largest proponents of the bill was tech giant, Google. Google and other backers of the bill argued that frivolous “patent troll” lawsuits are taking a financial toll on large and small companies alike who often lose millions in litigating “patent troll” suits, only to be forced to settle in the end.

Opponents of the bill, namely pharmaceutical and biotechnology companies and universities, disagreed with the degree to which the proposed bill would have regulated “patent trolls.”  “Many of the provisions would have the effect of treating every patent holder as a “patent troll,”’ they wrote to the judiciary committee.  They went on to state that, “the effect of the proposed legislation is to weaken the ability of every patent holder to enforce a patent and promote a business model that does not rely on patents, thereby discouraging investment in innovation.”

Although “patent trolls” mostly target large companies, small businesses and individuals could potentially be susceptible to patent infringement suits as well. If you are worried that you may be subject to a patent infringement lawsuit or if you believe that your registered patent was infringed upon, you should contact an experienced intellectual property law attorney to help you weigh your legal options.