Bipartisan Bill Aimed at 'Patent Trolls' Introduced in U.S. House

NEWS ANALYSIS: Two California Congress members introduced a bill to make it harder for so-called “patent trolls” to file infringement suits based on poorly reviewed patents.

A bipartisan bill introduced into the U.S. House of Representatives July 22 would give technology users relief from the lawsuits of patent trolls when they go after companies and individuals who do something as simple as buying products from an electronics store.

The legislation, called the "Stopping Offensive Use of Patents Act" (H.R. 2766), is sponsored by California Representatives Darrell Issa and Judy Cho. The House resolution closely parallels legislation introduced in the U.S. Senate by Senator Charles Schumer called the "Patent Quality Improvement Act of 2013," which was filed May 6.

According to a press release issued by Rep. Issa's office, the legislation would revise the existing business method patent process to allow a wide variety of such patents to be challenged. Currently, a Transitional Business Method Program allowing such challenges to patents is limited to financial services. The new act would expand that coverage.

"This change will allow the U.S. Patent and Trademark Office to determine the extent of the validity of a number of patents, particularly those related to software and computers, where litigation abuse has run rampant," Issa's office said in its press release.

"Right now, patent trolls are manipulating the overly broad and poorly determined patent definition to win settlements and damages from tens of thousands of real American innovators," said Rep. Issa in a prepared statement.

"As a patent holder, I know how harmful and expensive these aggressive litigation tactics are for American entrepreneurs. Instead of spending money on new hires or technology, innovators are faced with millions of dollars in legal fees to resolve these baseless lawsuits. The STOP Act provides tools for legitimate patent holders to put an end to the abuse," Issa's statement said.

In a statement released by Sen. Schumer when he introduced his legislation in the Senate, patent trolls have become a huge problem to legitimate users of technology. "Specifically, this has been an enormous problem among technology start-up companies," Sen. Schumer said in a prepared statement. "62 percent of patents asserted by trolls from 1990-2010 were software patents; 75 percent were in computer and communications technology. And this is a particular problem for small businesses: 82 percent of companies targeted by trolls [have] annual revenues less than $100 million."

While both bills appear on the surface to be minor adjustments to existing laws, in fact they will bring about major changes in how covered business methods patents are handled, especially when patent trolls try to sue end-user companies who are simply trying to use products they bought at Staples or Best Buy.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...