The patent reform act didn't go far enough

Patent trolls have wasted $500 billion that could have supported innovation and jobs -- real reform is needed

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Because there are so many software-related patents, it can be difficult for a company to know when its work might attract the attention of a troll. "The scope of these patents is not clear, they are often written in vague language, and technology companies cannot easily find them and understand what they claim. It appears that much of the NPE litigation takes advantages of these weaknesses," the paper states.

Hoping to shore up the process and end the logjam of pending patents, Congress, after years of discussion, finally enacted the America Invents Act, the first major change in patent law since the 1950s. On the plus side, it allows the overburdened U.S. Patent and Trademark Office (USPTO) to see fees for patents, which should help in hiring enough people to whittle down a backlog of 700,000 patent applications.

It would also allow third parties to file a challenge to a patent within nine months of it being awarded. The new process for challenging patents will weed out ones that the USPTO shouldn't have granted in the first place, supporters said.

Very significantly, the new law ends the practice of suing multiple defendants for violating a single patent. Although it might seem that defendants do better when they can band together with other defendants, in practice they wind up paying more in legal costs. The trolls, in turn, tend to get a larger total settlement, even though the individual defendants may each pay less, says Brad Pedersen, an attorney specializing in patent law at the Patterson Thuente IP firm.

Why the new patent law doesn't solve the problem
Pedersen, who often represents startups, believes the new law will have a significant impact on trolls. Indeed, in the days immediately before the law actually went into effect, patent suits against multiple defendants spiked, as potential litigants realized they were almost out of time to sue. Overall, he says, the new law will do much to reduce troll-inspired lawsuits.

But Boston University's Bessen disagrees, noting that the law leaves untouched a favorite weapon of the trolls: a tactic known as a continuation. Simply put, a continuation is an open patent application, often filed after an initial application by a troll is rejected. Once a legitimate company develops a process or application related to the continued patent, the troll then modifies its application to cover what the legitimate inventor has done.

The law also does not undo years of legal precedent that allows the filing of vague and overly broad patents, Bessen says. "In trying to make world safer for [inventors], the federal courts have relaxed rules and allowed patents on abstract ideas, making boundaries unclear, which leads to litigation."

There's nothing in the law that will put a stop to the debilitating patent fight that has turned into a war of everyone against everyone in the wireless industry.

Flawed as it was, the America Invents Act was a start. But it has to go further. Until the law is strengthened, patent trolls will continue to damage the economy and suck the life out of innovative companies.

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