Rep. Peter DeFazio, along with Rep. Jason Chaffetz, have re-introduced the SHIELD Act (Saving High-Tech Innovators from Egregious Legal Disputes) in the House of Representatives. The SHIELD Act (H.R. 845, pdf) is designed to help the innocent victims of patent trolls.
Patent trolls (see my previous post here for another take on “trolls”) of use the high cost of litigation as a means of getting companies to pay licensing fees without going to court. It costs millions to defend a patent lawsuit. So while a few companies have fought back and won, there is a reluctant by most companies to spend time and money fighting a lawsuit. The scenario goes something like this:
PT: You’re infringing our patent!
HTC: No we are not!
PT: Well, for an amount substantially less than fighting this in court, we will go away. (Aren’t we nice?)
HTC: (grmble, grumble, grumble) Bean counters say to do the deal because it is cheaper than the alternative. (grmble, grumble, grumble).
However, smaller companies and start-ups usually cannot afford even the license agreement and might have to cease operations due to this type of pressure, even if the claims are weak.
The Shield Act, defines a troll as a patent owner who did not do the inventing behind the patent and does not exploit it by making a product. A patent owner that fits those criteria and loses an infringement case would be on the hook for its opponents’ costs under the bill.
The new SHIELD Bill makes it clear that the law applies only to companies that buy patents to assert in litigation. However, this may still apply to some large companies that have, and leverage, non-practising patents that they own, ala Kodak.
So, it is yet to be seen if this new and improved bill will make it past the lobbying efforts of some large companies that act like trolls as well as those entities that are traditionally considered to be trolls.
How Can I Help?
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– Ex astris, scientia –
I am and avid amateur astronomer and intellectual property attorney. As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +