Jun 04 2013

Wall Street Journal: Obama Tries to Curb Patent-Holding Firms

Newswire | Published 4 Jun 2013, 7:59 am | Comments Off on Wall Street Journal: Obama Tries to Curb Patent-Holding Firms -

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WASHINGTON—The White House on Tuesday announced a set of executive actions by President Barack Obama aimed at reining in certain patent-holding firms, known as “patent trolls” to their detractors, amid concerns that the companies are abusing the patent system and disrupting competition.

Mr. Obama’s actions, which include measures he wants Congress to consider, are intended to target firms that have forced technology companies, financial institutions and others into costly litigation to protect their products. These patent-holding firms amass portfolios of patents more to pursue licensing fees than to build new products.

The firms say they are doing nothing wrong, just using patents that were legally granted by the U.S. Patent and Trademark Office. They say they promote a fair market by protecting smaller inventors.

To help deter questionable lawsuits, the Obama administration is, among other things, directing the Patent and Trademark Office to start a rule-making process aimed at requiring patent holders to disclose the owner of a patent, the White House said. Businesses sometimes are sued by shell companies and don’t always know who actually owns the patent they are being accused of infringing, and whether the firm holds other relevant patents.

In addition, the president is asking Congress to pass legislation that would allow sanctions on litigants who file lawsuits deemed abusive by courts

Those are among five executive actions and seven proposed legislative changes Mr. Obama is recommending. The actions and recommendations were released as part of a White House report on patent-holding firms. The report estimates that companies and individuals paid patent-holding firms $29 billion in 2011, a 400% increase from 2005.

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