Mom and pop store bashing earns patent trolls a whack from congress

7 December 2013 by Steve Blum
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Which way to the senate?

Patent trolls aren’t on the run yet, but life could get bleaker for them if a bill passed this week by a bipartisan majority – 325 to 91– in the U.S. house of representatives is approved by the senate. Called the Innovation Act, the legislation would make it harder for the predatory bar to weave dubious theories about why stockpiled patents apply to common, everyday products and business practices, and then try to intimidate small businesses into coughing up cash to avoid a court battle.

It was the growth in bully boy letters to stores and coffee shops, among others, that enticed 130 house democrats take up a cause usually owned by republicans, and vote for the measure. The bill would make several changes to current patent law, but three are particularly important:

  • Trolls that lose in court will have to pay the legal costs for both sides. Right now, a losing defendant can get tagged for costs, but not a losing plaintiff.
  • Equipment manufacturers can take the lead on lawsuits that claim their products infringe a patent. Currently, trolls can ignore deep-pocketed manufacturers and go directly after customers that have purchased a product.
  • Trolls would have to disclose who’s really behind a lawsuit, and couldn’t hide behind shell companies as they do now.

It’s the “loser pays” provision that gives the bill teeth, but it’s also the bit that could draw fatal opposition in the senate. Democrats, who hold the majority there, traditionally oppose loser pays rules. It might be because impoverished plaintiffs would have a harder time getting justice when McDonalds serves them a hot cup of coffee. Or it might be because trial lawyers are huge contributors of campaign cash to democrats (and not a few republicans) and the prospect of a loser pays system, even just limited to patents, fills them with sheer terror.

Whatever you think about the Innovation Act, let your senators know.