Finally. In November 2013 the United States Senate held a hearing to contemplate possible ways of solving the problem of deceptive demand letters by patent trolls. So far there have been no break-throughs in this process but it is too early to tell. There was good news however in the Kentucky Senate where bill (SB116) sought "to establish a bad-faith assertion of patent infringement as a violation of Kentucky's consumer protection chapter and authorize the utilization of the remedies available for those violations in addition to private remedies established in the bill" was passed unanimously. The bill is similar to one that was passed by the Vermont Legislature last year.
The way it will work is by setting guidelines of what a bad faith patent assertion vs a good faith patent assertion is. So which factor are evidence of bad faith?
The original blog post can be referenced below:
http://www.fosspatents.com/2014/02/kentucky-senate-committee-approves.html
The way it will work is by setting guidelines of what a bad faith patent assertion vs a good faith patent assertion is. So which factor are evidence of bad faith?
- "The claim is meritless and the patent holder knew or should have known this."
- "The claim or assertion is "deceptive" (not defined).
- "The patent holder is a non-practicing entity."
- "The patentee "engages in a good-faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy"."
- "Previous behavior can be helpful to a patentee if he previously demonstrated good-faith business practices in enforcement of the same patent or a substantially similar one, or successfully enforced the patent or a substantially similar patent through litigation."
The original blog post can be referenced below:
http://www.fosspatents.com/2014/02/kentucky-senate-committee-approves.html
This is some interesting legislation. I think it can definitely reduce the number of needless lawsuits if enforced efficiently. But is there some sort of penalty for violating the terms set forth by the bill?
ReplyDeleteI think one of the best ways to help reduce the instances of "patent trolling" is to force the plaintiff to pay the legal costs incurred by the defendant if the plaintiff loses the case. There are too many non-meritorious cases which are settled before the case even reaches the courts because the defendant (usually a small company with a non-existent legal team) cannot afford the high costs associated with hiring a patent attorney and defending their patent. It's a shame that these trolls have the ability to put a damper on innovation by small entities and it must be stopped.
ReplyDeleteIt is a step towards reform, but I doubt it changes much. I also did a blog post on this, and the proposal seemed to lack a lot. For instance, the new 3 proposals do not seem helpful enough. I doubt people will take advantage of this. Just as Jega says, if they implement a huge penalty, say 10% of total cost, these trolls will be automatically removed.
ReplyDeleteBuilding on what the previous comments have said, I agree that this piece of legislation is a step in the right direction, but that it is uncertain whether or not and to what extent it will be successful in incentivizing patent trolls not to file bad faith patent assertion lawsuits. My own thoughts regarding how to combat trolls align with Jega and Dong's, in that forcing patent trolls to pay the legal fees for their defendants given a successful defense would reduce the number of prohibitive patent troll suits; however, doing so may negatively affect legitimate patent infringement claims by practicing entities. Overall, it remains to be seen how such legislation will affect the world of patent litigation in the long run.
ReplyDeleteI think Jega brings up a good solution of forcing the "plaintiff to pay the legal costs incurred by the defendant if the plaintiff loses the case," though I'm not sure how realistic this procedure would be. Could this have negative consequences? And Osama, I completely agree with you – these patent trolls (that I was barely aware of before this week) are such a hassle.
ReplyDeleteThorough discussion of topic, well done. Please note that the bill was passed by a committee; it has not yet been passed by the Senate. http://www.fosspatents.com/2014/02/kentucky-senate-committee-approves.html
ReplyDeletehttp://openstates.org/ky/bills/2014RS/SB116/