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New House Bill Takes on Patent Trolls

CEA praises latest attempt to end “patent abuse”

Momentum is building in Congress to squash patent trolls.

The issue is of interest to radio because of the long-standing patent litigation involving several broadcasters and MAD/DigiMedia over music automation and storage software.

Patent trolls can threaten to sue a few or thousands of companies at once, without specific evidence of infringement against any of them, create shell companies that make it difficult for defendants to know who is suing them and assert that their patents cover inventions not imagined at the time they were granted, according to the National Economic Council and the Council of Economic Advisors.

The White House is taking several steps to curb patent abuse and President Obama said in May that his administration is ready to work with Congress to resolve the problem.

This week Texas Republican Rep. Blake Farenthold and New York Democrat Rep. Hakeem Jeffries introduced the Patent Litigation and Innovation Act of 2013 in the House. It is the sixth piece of legislation unveiled this year to address concerns about patent trolls, and features some provisions that were included in the earlier bills, like making the accuser reveal more about who is actually bringing the suit, including more details about their patent claims, as well as limiting discovery.

A big difference between H.R. 2639 and its predecessors is the bill would allow manufacturers to essentially take over a case against an end user accused of patent infringement for something they bought.

“Through heightened pleading requirements, the bill adds transparency and legitimacy to the thousands of cease and desist letters sent out by patent trolls,” according to Farenthold, who says the current patent system amounts to legalized extortion for many companies who frequently decide to settle in order to continue investing in their business, rather than pursue potentially frivolous litigation.

“The legislation is designed to provide a constructive framework for patent infringement cases to proceed while minimizing the problem of abusive litigation. The explosion of patent troll activity diverts resources away from research and development, hinders innovation and stifles entrepreneurship,” said Jeffries.

Consumer Electronics Association President/CEO Gary Shapiro praised the bill, noting that the legislation “will allow legitimate companies to protect their patents, while discouraging abusive litigation.”