US Supreme Court ruling puts patent trolls on notice

Software and tech companies might have just scored a victory in their almost never ending battle against patent trolls and their often frivolous patent claims. The US Supreme Court has just handed down a ruling that upheld a new government process that allowed challenges to the validity of patents to be held before the Patent and Trademark Office (PTO) instead of a federal court, significantly cutting down on trial costs. The process has been largely hailed by companies like Google and Apple in aiding them in fending off patent trolls.

"Patent troll" is the rather unsavory nickname of an patent assertion entity, whose core business lies in not exactly using a patent that they hold, usually acquired from some defunt company, but in licensing and suing possible patent infringers. A few years back, such businesses have been enjoying popularity and revenue in suing even giant tech companies over patents that would sometimes be deemed invalid later on.

However, getting those patents invalidated as a way to beat a patent lawsuit wasn't exactly a cost effective strategy, a situation that patent trolls were only too happy to take advantage of. But in 2011, in an effort to reform the widely criticized patent system, the PTO implemented regulations that changed the venue of patent challenges from federal court to the PTO itself.

That was the regulation that Cuozzo Speed Technologies LLC challenged before the country's highest court. Previously, Cuozzo lost a patent case against navigation company Garmin, whom it accused of infringing on its patent for alerting drivers when they have exceed a speed limit. Garmin used the regulation to challenge the validity of the patent, with the PTO siding with Garmin. Now the SC has also indirectly sided with it and with a whole host of companies relying on the regulation to keep trolls at bay.

But while tech companies might be declaring a victory, other businesses aren't exactly too happy. Those "strong" patent obstacles have been traditionally used pharmaceutical and biotechnology companies to actually fend off frivolous patent lawsuits, considering the amount of work and money needed to get those usually million dollar patents invalidated. The ruling, which puts the matter into the hands of a challenger-friendly PTO, now leaves them open to more lawsuits.

SOURCE: Wall Street Journal