NCPA - National Center for Policy Analysis

Patent Reform Could Soon End Abusive Behavior

April 27, 2015

Changes to the current patent law regime have been proposed to reduce a firm's ability to engage in abusive behavior. This concern spurred significant changes to patent law in 2011. Despite this recent legislation, Congress is again considering reforms, with the focus on so-called patent trolls. Patent trolls are entities that earn income off their patents from suing others for infringement.

Here is a closer look at the proposed changes:

  • Fee shifting would change U.S. law so the loser in a patent infringement lawsuit would have to pay for the attorneys' fees of the winner as well. Only in those instances where the court determines that the loser advanced objectively reasonable positions would they be able to escape the attorneys' fees.
  • Customer stay protections make it easier for the manufacturer of an allegedly infringing good to step in to defend its product while putting a temporary halt to proceedings against an end customer.
  • Pleading standards are also another area slated for reform. At the beginning of a lawsuit, each side must formally submit their claims and defenses. The information required in patent cases is far less than in other parts of law. The question for Congress is whether it should issue a new standard or be subject to the broader standard.

Abusive claims accounted for over half of all patent litigation in 2012, while there was a nearly 40 percent increase in suits by non-participating entities (NPE) between 2007 and 2011.Thus, there has been pressure to change some of the aspects of patent laws to stop firms from engaging in abusive behavior. 

Source: Will Rinehart, "Recent Developments in Patent Policy," American Action Forum, April 21, 2015. 


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