Posts Tagged: "SHIELD Act"

SHIELD Act Part 2 and Other Proposals to Combat Trolls

The latest incarnation of the SHIELD Act was introduced on February 27, 2013, and changes direction as if the first iteration were waived off in disgust before it could even lower its gears. SHIELD Act 2, scuttles the “reasonable likelihood of succeeding” idea floated and introduces a new tool aimed at walling off the troll: a bond requirement. If the plaintiff is not an original inventor or assignee, did not make a substantial investment in practicing the invention, or is not a university, that troll must post a bond. Like SHIELD Act 1, SHIELD Act 2 does not require the troll to fire the first shot. Interestingly, under SHIELD Act 2, Facebook would have had to post a bond in its battle against Yahoo! and theoretically an involuntary but necessary party joined as a plaintiff could be required to post bond.

A Review of the Patent SHIELD Acts and Recent Proposals to Reform Patent Litigation

“Patty Sue Just Won’t Go Away.” So went a 2002 article in the San Francisco Chronicle, one of a many articles spanning several years about Patricia McColm, a vexatious litigant blacklisted since 1994. She was the Most Vexatious Pleader of the vexatious litigants. If she were a patent attorney, frightened examiners would give her a 100% allowance rate without amendments. If the anti-joinder provisions of the America Invents Act (“AIA”) applied to Patricia McColm, she would have her own clerk’s office. One draws similarities between the problems presented by firms such as Intellectual Ventures, Acacia, and Lodsys and those presented by Ms. McColm, and a flurry of proposals were recently introduced in Congress.

House Subcommittee Pursues Answers to Litigation Abuses by Patent Assertion Entities

The House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet on March 14, 2013, heard from six witnesses that the business of “patent assertion entities” (PAEs) is inflicting severe harm on a broad range of technology users. The witnesses at the hearing agreed that, when confronted PAE demand letters on frivolous claims, settlements by and large are economically unavoidable.

Here they go again – this time with the Patent SHIELD Act

Indeed, the bill’s co-sponsor acknowledges and states “[t]his bill combats the problem of patent trolls by moving to a ‘loser pays’ system for software and hardware patent litigation.” However, the bill’s sponsors fail to explain what makes the frequency, risk, or social harm of “egregious” patent lawsuits any different than those of other “egregious” civil suits in America so as to single out patent right enforcement for a special treatment under civil law. In fact, the following graph shows that in the last four decades the number of patent lawsuits filed per year has risen at slower pace than other IP lawsuits or when compared to all Federal civil suits. Patent lawsuits now constitute a little over 1% of all Federal civil suits – the same fraction as that in the mid 1970’s.

New Patent Reform Takes Swing at Patent Trolls

Yesterday Congressman Peter DeFazio (D-OR) and Congressman Jason Chaffetz (R-UT) introduced the Saving High-tech Innovators from Egregious Legal Disputes Act, or SHIELD Act for short. If ever passed into law the SHIELD Act would ostensibly adopt a variation on the English Rule, where the losing patent owner pays the legal fees of the victorious patent defendant when there was no “reasonable likelihood” that the patentee would prevail in the litigation. If theAct required a claim chart upon filing, applied across the board to all those who would seek to manipulate the patent system and not just computer/software patents and defined “reasonable likelihood of success” I would be on board with both feet.  As it is, I am on board with one foot and hopefully that improvements can be made to this important piece of legislation.