The March Toward Patent Reform Continues
Today, Sen. John Cornyn (R-Texas) introduced the Patent Abuse Reduction Act, a wide-ranging bill targeting abusive litigation tactics—a favorite tool of the patent troll.
The good news first. The bill would do significant harm to the patent troll business model, making it harder to be a troll and easier to fight one in court. Patent trolls have long taken advantage of the fact that patent litigation is expensive (costing into the millions of dollars) and can take years, draining companies of resources. Patent trolls are in the very business of litigation and deploy a variety of techniques (shell companies and contingency fee arrangements, for example) to keep their own costs much lower.
The proposed legislation would level this playing field by incorporating one of our favorite reforms, fee shifting. This means that if a party accused of infringing a patent actually fights back in court and wins, the troll could be on the hook. (Unfortunately, the legislation doesn't require the suing party to post a bond—an important tool for deterring patent trolls.) The bill also includes provisions limiting the type and amount of discovery a troll can get and what kind of information a troll needs to disclose at the outset of a lawsuit. The latter is particularly promising because it would force patent trolls to do true due diligence before they sue and to name who is really behind the lawsuit (information that is currently quite difficult to find). These provisions make the troll's case more expensive and takes away another of its favorite tools—secrecy.
The not-so-good news is that these reforms are all litigation focused and, thus, limited. We believe the problem is much bigger. The bill does not address patent quality and fails to consider what the Patent Office could do to help those facing lawsuit threats. It does not include protection for end users, consumers who find themselves staring down patent trolls over widely available technologies. And it fails to address the very root of the problem by not considering whether we should be able to patent software to begin with.
We will continue to raise those issues and fight those fights. In the meantime, we are encouraged to see the introduction of large scale-reform that would go to the heart of the patent troll business model. We hope that those policy makers who have publicly recognized the patent troll problem will join in the upcoming debate on this important legislation.