White House Patent Troll Plan Isn’t a Quick Fix and Won’t Help Everyone

“According to the White House’s statement, innovators continue to face challenges from Patent Assertion Entities (PAEs), companies that, in the President’s words ‘don’t actually produce anything themselves,’ and instead develop a business model ‘to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.’”   (Howard Ullman)

On June 4, the White House came out swinging against patent trolls. From attorneys Jeffrey Mikrut and Matthew Smith of Foley & Lardner:

“[T]he White House issued a press release through the Office of the Press Secretary identifying five executive actions and seven legislative recommendations primarily directed at reducing or discouraging the litigation activities of patent assertion entities (PAEs), pejoratively referred to as ‘patent trolls,’ and modifying aspects of the U.S. International Trade Commission.”

Three early observations on the administration’s plan, from lawyers on JD Supra:

1. The outright elimination of Patent Assertion Entities is not part of the plan:

“Interestingly, the Patent Assertion Report goes to great length to explain that non-practicing ‘patent intermediaries’ can play a useful role in a successful patent system. Such intermediaries can create liquidity in the intellectual property market, helping inventors and manufacturers get together so that patented inventions can be commercialized. However, as the Patent Assertion Report explains, the problem is when patent intermediaries step over the line and emerge as patent trolls.” (MBHB)

2. This isn’t a quick fix:

“Two proposed executive actions — to begin rulemaking to require patent applicants and owners to regularly update ownership information, including an ultimate parent entity, and to provide additional training to examiners in scrutinizing functional claims — may eventually have an impact, but it is too early to determine the extent of the impact. The legislative recommendations will likely not have any immediate effect, as they must first be passed by Congress.” (Foley & Lardner)

3. The solutions won’t work for everyone:

“The proposed legislation may help curb abusive litigation practices by PAEs. It is, however, unlikely to help innovators with limited resources, as in order to eventually recover fees, a litigant first must be able to litigate a case through judgment and prevail.” (Wilson Sonsini)

Read the updates:

Find more on Patent Trolls at JD Supra Law News>>