Just over two years after patent reform legislation passed Congress, new reforms may once again be coming down the pipe. Under the America Invents Act, which went into effect in 2011, the United States shifted from a first-to-invent to a first-to-file system, and it also allowed companies to pay a fee to speed up their applications.

Opponents have long said the America Invents Act favored big businesses and lacked the teeth that would allow the government to come down on so-called “patent trolls,” individuals or shell companies that patent broad technologies so that they can demand licensing fees critics are now advocating for something more: reform that would crush patent trolls, or as Timothy B. Lee recently wrote in The Washington Post, address “frivolous patent litigation.”

English: Troll Federlandese

Photo credit: Wikipedia

They may not have to wait much longer. In late December, the U.S. House of Representatives passed another reform bill, called The Innovation Act, by a vote of 325 to 91. The White House has signaled its support for the legislation, and the Senate will vote on it soon. The Washington Post explainer has a really useful outline of what’s in the bill. Among the changes: it would require more specific lawsuits from patent plaintiffs (who are sometimes “trolls”). It would require plaintiffs to name any person who has a financial interest in the patent, so they couldn’t hide behind shell companies. And it would allow technology vendors, like the manufacturers of WiFi networking equipment, for example, to fight lawsuits against patent plaintiffs on behalf of their customers. That could be a huge help for small businesses that use the equipment (offer free WiFi access to customers, for example), because patent plaintiffs often sue end users rather than take on bigger manufacturers.

It looks like the federal government isn’t alone in its desire to crack down on patent trolls. On Tuesday, New York Attorney General Eric T. Schneiderman reached a civil settlement that will require Delaware patent firm MPHJ Technology Investments to pay back all the money it collected in licensing fees from small businesses in the New York area. MPHJ, which owns the patents on certain email and scanner technologies, used “deceptive and abusive tactics when it contacted hundreds of small and medium-size New York businesses in an effort to strong-arm them into paying MPHJ for patent licenses of dubious value,” the Attorney General’s office said in a statement. MPHJ will also be barred from sending those kinds of threatening letters in the future.

Minnesota, Vermont and Nebraska’s attorneys general have also filed lawsuits against MPHJ.

2 responses to “Small Businesses May Benefit From Patent Troll Hunt”

  1. ‘Impending legislation and state enforcement actions could help smaller firms fight back against companies that misuse patents as a business strategy’

    Balderdash. The truth is small firms far more rely on patents than large firms. Large firms can control their markets by their size alone. This is a pure red herring used by large predatory firms as an excuse to legalize theft.

    Just because they call it “reform” doesn’t mean it is.

    “patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…

    “This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained, despite other democrats praising the overhaul. “This is a big corporation patent giveaway that tramples on the right of small inventors.”

    Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.

    They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs.

    The present bill (vers 1, 2, 3, etc) is nothing less than another giveaway for huge multinationals and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated these bills will help them steal our inventions.

    Patent reform is a fraud on America. These bills will not do what they claim they will. What they will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what they paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. These bills will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Meanwhile, the large multinationals ship more and more jobs overseas. These bills are a wholesale destroyer of US jobs.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

    Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    for a different/opposing view on patent reform, please see…

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