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Bipartisan Bill To Force Patent Trolls To Pay Legal Costs

Bipartisan Bill to Force Patent Trolls to pay legal costs

Two congressmen from opposite sides of the political aisle have joined together to introduce The SHIELD Act (H.R. 845, pdf), a bipartisan bill that will force “patent trolls” to pay legal costs if they lose a lawsuit.

Representative Peter DeFazio (D-Ore.) joined Jason Chaffetz (R-Utah) for a press conference to announce the new bill, which was reported by The Hill:

“‘Patent trolls add no economic benefit to our nation,’ Chaffetz said at a press conference on Capitol Hill. ‘They have captured a part of the system. They are exploiting it for their own personal financial gain.'”

The term “patent troll” refers to companies that do not produce anything or conduct research leading to innovation. Instead, they buy patents from inventors and from companies going out of business so they can pursue legal action against other companies they believe to be infringing on their patents.

Patent trolls dramatically increase the cost of doing business because companies have to spend millions of dollars to defend themselves in court. Money that could be going to innovation and hiring new employees gets sucked up by the legal system.

As an example, if you were a brilliant programer who invented a new computer operating system to compete against Apple and Microsoft, you would have to be very rich to introduce it to the market because so many of the things an operating system does are protected by patents.

Representative DeFazio told the press the problem is getting worse. Patent trolls are starting to threaten small businesses for doing things as simple as scanning a document and attaching it to an email:

“‘The burgeoning nature of this unproductive practice needs to be addressed,’ DeFazio said, noting that an academic study estimated that businesses paid out $29 billion to patent trolls in 2011.”

The Electronic Frontier Foundation, a non-profit that defends the digital rights of consumers against government and large corporations explains the importance of the bill:

“The SHIELD Act will help fix this problem. Under the Act, if the patent troll loses in court (because the patent is found to be invalid or there is no infringement), then it pays the other side’s costs and legal fees.”

The SHIELD Act was originally introduced by DeFazio and Chaffetz last year, but they’ve expanded it from only covering computer and software patents to covering innovation in all industries.

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4 Responses to “Bipartisan Bill To Force Patent Trolls To Pay Legal Costs”

  1. PI Ausa

    Lies and damned lies! These are mere dissemblings by huge multinational thieves and their paid puppets -some in Congress, in the White House and elsewhere in the federal government. Their intent is to pervert or weaken the patent system so it can only be used by them and no one else. Then they can rob at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED!

    For the truth, please see http://www.truereform.piausa.org/.
    https://www.facebook.com/pi.ausa.5
    http://piausa.wordpress.com/

  2. Vic Kley

    It would seem that Goldman Sachs, Honeywell, American Express, Google and many other large international companies and crooked bankers are behind Jason Chaffetz to the tune of $348,931in 2012, while Peter Fazio shared some of the same he had a more balanced support that included Honeywell, Berkshire Hathaway, Union Pacific, CSX and many more to the tune of $270,321 in 2012.

    Three quarters of a million dollars! In this bill the wealthy are buying the patent system they want.

    In the guise of reform for new companies Chaffetz and Fazio will insure that only the older well monied companies with deep pockets for lawyers will prevail. These companies lawyers will run up the bills for small entities whose technology they want, crush them in court and then buy them for pennies on the dollar.