Congressmen including Lamar Smith (R-TX) and Howard Berman (D-CA) were among the Representatives who used a hearing yesterday as a chance to take rhetorical swipes at patent trolls.
The hearing, held by the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property, was called, “Patent Trolls: Fact or Fiction?”
A patent troll is a person or small company that traffics primarily or exclusively in the threat of patent litigation. The company will either register or purchase patents with no intention of developing products using the patented technologies or techniques. Rather, they will go seeking people whom they can credibly accuse of infringement. Trolls will seek licensing fees that exceed the market rate but fall short of the would-be defendant's legal expenses (pdf). Failing that, they are willing and able to go to court.
The bill at issue is H.R. 2795, “The Patent Reform Act of 2005.”
H.R. 2795 makes some substantial improvements to patent law. It limits damages and limits the ability of patentees to get injunctions. The bill reduces the ability of would-be patentees with pending applications to tack on “continuation” applications subsuming similar products that others have brought to market since the first filing.
Perhaps most excitingly, the bill makes it much cheaper and easier to challenge bad patents-either within nine months of the PTO's granting of an application, or within six months of being accused of infringement. Rather than spending hundreds of thousands in federal court, one can spend much less money and contest patents in front of the PTO.
So far, the bill looks like it has a very good shot at passage. Republican Lamar Smith, the Subcommittee Chair, sponsored the bill. In opening the hearing, he argued that “the patent system should reward creativity, not legal gamesmanship.”
Howard Berman, the ranking Democrat and one of 11 bipartisan cosponsors, expressed concern about the patent troll who “spends not a cent on development…(and) patents every monkey he kisses. All he does is spend his time sitting around waiting, (hoping) that he can make enough of a case that it might infringe on his monkey that somebody will pay him to go away.”
If this bill does not pass, it is probably due to the shortened election year calendar, and bipartisan enthusiasm for reforming the patent system should eventually carry the day.