Reps. Farenthold, Cárdenas Introduce Bipartisan Bill to Defend American Businesses from Patent Trolls

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Washington, May 29, 2014 | comments

Today, U.S. Congressmen Blake Farenthold (R-TX) and Tony Cárdenas (D-CA) introduced the “Trade Protection Not Troll Protection Act,” legislation to protect American companies from abusive litigation at the hands of patent trolls.

The legislation will speed up the legal process surrounding patent assertion litigation, undertaken by patent assertion entities (PAE) or so-called “patent trolls.” PAEs abuse the International Trade Commission patent process by purchasing patents and suing for intellectual property similarity between their purchased patents and a product that has been created and is being manufactured.

Prior to 2006, PAEs had filed virtually no complaints under the relevant Trade Commission (ITC) statutes. However, since 2006, this has substantially changed, and as of 2012, PAEs brought 39% of patent investigations.

The rise of PAE cases at the ITC is at odds with its core purpose -- to protect domestic industry from abusive trade practices by companies importing foreign goods. PAEs were not contemplated, and did not exist in their modern form, when Congress last updated the ITC’s statute in 1988.

“The law we’re fixing with this legislation was created to protect American businesses,” said Congressman Cárdenas. “Instead, thanks to these patent trolls, American businesses are being crippled by the bureaucracy it takes to fight these claims. I am happy to work with Congressman Farenthold to help speed up due process to allow our entrepreneurs to produce outstanding products while we protect legitimate infringement on American patents.”

PAEs do not intend to make or sell an alternative to the product covered by the patent – their goal is not to prevent imports, but to extract licensing fees. The ITC was never intended to protect this type of activity.

“Abusive patent litigation is a drag on our economy and it stifles innovation,” said Congressman Farenthold. “This problem impacts businesses and industries of all types, and it affects the jobs of the employees who work for them. Everyone from inventors, start-ups, and mid and large sized businesses face this threat. Our legislation curbs the problem by targeting abusive patent trolls and discouraging frivolous patent lawsuits.”

Along with other improvements, the Trade Protection Not Troll Protection Act will mandate that PAEs have a vested interest in the patent, including development of the product described. It will also change current law to allow “public interest determinations” at the beginning of the review process. Currently, waiting for these determinations can force a producer or company to halt all work being done with the product in question.

The legislation has been supported by a broad coalition of American companies including Apple, Broadcom, Ford, Google, HP, Intel, Avaya and Cisco.

A copy of the legislation can be found here and a summary can be found here.

                                                                                                                                                                                          

 

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