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Crackdown on patent suits puts small firms at a disadvantage

Posted: 13 Feb 2014 ?? ?Print Version ?Bookmark and Share

Keywords:patent suits? intellectual property?

Current draft bills of the legislation to curb frivolous patent infringement suits are hampered by a lack of hard data, experts say. While Congress is expected to act soon, pushing the bills as they are could bring unintended consequences.

In an email exchange with EE Times, Stanford Law School professor Mark A. Lemley focused on intellectual property and said that some form of patent reform directed at litigation abuse will pass, which may turn out different from the Innovation Act, HR3309, the House has passed. "Most patent academics, like most innovative companies, recognise patent litigation abuse as a serious problem and want to see something done about it."

David J. Kappos, former undersecretary of the US Patent Office, is currently in private practice with the New York law firm Cravath, Swaine & Moore LLP. "My view is legislation is quite likely to move forward and we can get it right... to do some modest things to discourage [frivolous] suits without discouraging good faith innovators," he told EE Times. However, current draft legislation "also has provisions that are not going to achieve [its] goals but will have regrettable downsides."

Specifically, the draft legislation would require losers to pay court costs. The provision "needs to be carefully calibrated... so it only applies where the loser is taking a position that is not substantially justified," Kappos said. Otherwise, it could favour the more wealthy party in the suit.

Another provision calls for delaying the expensive process of discovery until the court examines the patents in the case, reducing upfront costs of a trial. However, current draft ('drought?')s "reach too far into the discretion of the judicial branch," he said.

One other provision tries to eliminate the practice of suing companies such as retailers, cafes, and innkeepers that lack financial and technical resources to fight a patent suit. However, draft legislation is written in a way that could stretch unintentionally to apply to supply chain manufacturing partners. The good news is "there are briefings going on as we speak... [that could] steer legislation to a centre point."

- Rick Merritt
??EE Times

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