Federal courts in recent years have seen a surge in lawsuits filed by patent trolls. The tactic has been to file nuisance lawsuits in the hope of gaining a quick settlement. The Senate has finally responded to the problem with a bill recently filed that would make it more expensive and more difficult for patent trolls to ply their trade. Professor Arti Rai explains the problem and the proposed solution in this report.
Professor Rai notes that the Senate bill is similar to one previously introduced in the House. One important difference is that the Senate bill would give the trial judge more discretion in determining whether to award attorney’s fees to the winning side. Another, rather technical distinction has to do with the ability of a plaintiff to pay fees and in that regard is more plaintiff-friendly than the House bill.
Professor Rai says that both bills are designed to discourage patent trolls. She explains that these companies, also called non-practicing entities, are companies that hold patents but do not use their intellectual property to make products. The main activity of companies like this is to sue other companies seeking damages for alleged violation of the non-used patents.
Professor Rai believes that “some version of the Senate bill is likely to pass.” The Senate bill removes some sterner provisions in the House bill. Also, the President has expressed an interest in seeing patent reform enacted, so there is a community of interest in getting some legislation enacted.
There is still some question about disposing of litigation that arose under the America Invents Act. The new bill, if passed, may include some tweaks to the handling of AIA lawsuits. There will also be questions about the effect of recent Supreme Court activity in the patent field, especially as to the issue of “patent-eligible project matter.” One case of particular importance is Alice Corp. v. CLS Bank Int’l. Since the Alice case, there is more uncertainty about patent eligibility in the U.S.
Arti K. Rai, Elvin R. Latty Professor of Law and co-Director, Duke Law Center for Innovation Policy, is an internationally recognized expert in intellectual property (IP) law, administrative law, and health policy. She was formerly a senior official in the United States Patent and Trademark Office. Rai's research on IP law and policy in biotechnology, pharmaceuticals, and software has been funded by NIH, the Kauffman Foundation, and the Woodrow Wilson Center. The Legal Broadcast Network is a featured network of the Sequence Media Group.