You can’t follow the technology industry without being familiar with patent trolls. Patent trolls routinely hit any and every company they can think of with suits in an attempt to get the company they are targeting to pay licensing fees to use their patents. Typically, patent trolls don’t produce products they simply buy up patents in hopes that they can sue enough people to make a profit.
When a patent troll sues large company such as Apple or Microsoft, the defendants have the deep pockets to defend against the suit. However, when a patent troll sets its sights on a much smaller company that may just be starting out in the technology industry, the suit, frivolous or not, could be the end of the start up. A new bill has been introduced in the US House of Representatives in an attempt to prevent frivolous patent lawsuits being brought against other companies by patent trolls.
The bill is called the SHIELD (Saving High-Tech Innovators from Egregious Legal Disputes) Act. The bill is being sponsored by Representative Peter DeFazio and representative Jason Chaffetz and is limited to patents that relate to computer hardware and software. The basis of the new bill is that a plaintiff who brings a patent suit against the defendant could be liable to pay a defendants entire legal costs if the court finds that the plaintiff “did not have a reasonable likelihood of succeeding.”
One of the most interesting things about the bill is that the plaintiff could be on the hook for legal costs regardless of whether or not the defendant is using the technology covered by the patent in question. The SHIELD Act also seeks to define exactly what the software patent covers and would change the general language used in courtrooms that has remained static since 1952 concerning patents. A software patent is defined under the bill as “any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent.”
“The SHIELD Act ensures that American tech companies can continue to create jobs, rather than waste resources on fending off frivolous lawsuits,” Chaffetz said. “A single lawsuit, which may easily cost over $1 million if it goes to trial, can spell the end of a tech startup and the jobs that it could have created.”