Patent Trolls Lose Legal Advantages Under New U.S. House Legislation
NEWS ANALYSIS: A new law passed by the U.S. House of Representatives will try to rein in so-called patent trolls by requiring them to show they have valid claims and raising the cost of losing a case.Reining in frivolous and legally unsubstantiated patent infringement lawsuits by making it costly to lose an unfounded case is the goal of a new law passed Dec. 5 by the U.S. House of Representatives. The legislation, which moves on to the Senate for a vote, targets so-called "patent trolls" who often file vague, catch-all infringement cases against broad classes of small businesses that can ill-afford prolonged and costly litigation in federal court. Being a patent troll is essentially a way to print money. You look for overly broad patents for business processes or perhaps software, and then you buy the patent. Once you have the patent, you decide to impose license fees on everyone who might conceivably be infringing on your patent. These claims are made constantly regardless of the fact that they don't meet the U.S. Patent Office's requirements for obviousness, prior art or other existing patents.
The process works like this: You choose a class of business preferably with limited resources, such as mom and pop restaurants, and then send every one you can find something called a Demand Letter, telling them that they have to pay for a license or face a patent infringement lawsuit.