Congress Trolls Non-Practicing-Entities

For years now the business model of seeking licensing revenues from patents under the threat of litigation has come under fire from political, business and technology circles.  Patent Trolls, also known as “non-practicing entities” manage patent portfolios and seek payments from companies that may have infringing products or services.  Some NPEs (patent trolls) have been accused of strong-arm tactics closely resembling extortion.  To combat this perceived problem, Representatives Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) have introduced the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act.  The SHIELD act seeks to prevent frivolous litigation by punishing people that bring lawsuits lacking a reasonable likelihood of success.

The act would “provide for the recovery of computer hardware and software patent litigation costs in cases where the court finds the claimant did not have a reasonable likelihood of succeeding, and for other purposes.”  By its own terms, the act limits itself to patents relating to computer hardware and software.   The chances of this legislation becoming law may be a long shot.  Considering the massive changes to the patent system implemented by the America Invents Act, and the general uncertainty swirling about software patents, congress may be reluctant to introduce additional changes.  At the very least, this bill is indicative of growing anger and frustration stemming from unsavory patent litigation practices.

The Greenbaum Patent Blog is the blog of Eric A. Greenbaum esq, founder of Greenbaum P.C., an intellectual property law firm located in Long Island New York.  The firm focuses on patent and trademark prosecution, licensing and contract work for independent inventors, small companies and start-ups in New York City (NYC,) Long Island and around the country.  Intellectual property law is a rapidly evolving field of law and the issues are very fact-specific.  Nothing on this blog should be taken as legal advice.  Consult with an attorney for help on your particular case.  

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