White House issues new tools to fight patent trolls

Friday - 2/21/2014, 4:05pm EST

In his 2014 State of the Union Address, President Barack Obama called on Congress to pass a patent reform bill that would allow businesses to focus on innovation rather than on costly and needless litigation.

On Thursday, the White House renewed its commitment to leading the fight against patent trolls and to bolster the patent system by issuing a set of executive initiatives.

These initiatives build on a list of legislative recommendations the administration made last June aimed at protecting those using innovative technology from "patent trolls" — individuals who sit on a patent which they fail to develop and instead attempt to extort money from the innovator.

"The President and this administration care deeply about innovation, about making sure that you — the companies, institutions, organizations you work for, who are coming up with great new discoveries, breakthrough inventions, creating jobs on the way — make sure you're supported by the right incentives to innovate in the lab, the marketplace and the workplace," Federal Chief Technology Officer Todd Park said Thursday during a White House press briefing. "We want to help encourage innovators who are bringing great ideas to life. We want Americans to be rewarded for their hard work, their risk taking and genius and we continue to make important progress."

Park: We want level playing field for innovators

Speaking to an audience made up of business, education and non-profit leaders in the technology community, Park said the patent system needs to function well in order for them to create innovative technology that would benefit all Americans.

Although Obama signed the America Invents Act in 2011, the issue of patent trolls remains an ongoing concern.

"It's one issue in a big ecosystem that strikes at the heart of something important — ensuring a level playing field for innovators," Park said. "Some stakeholders came to us surprised that just as they were getting set to enter the marketplace, they found themselves fighting in the courtroom, dragged into a patent lawsuit that they didn't anticipate and couldn't afford. Others expressed frustration that a strong patent system that is the envy of the world could be turned on its head by trolls to hinder rather than help innovation."

Gene Sperling, director of the National Economic Council and President Obama's chief economic adviser, told the audience the negative impact of patent trolls is widespread.

"It affects our trade goals," he said. "It affects our investment strategy. It's essential to our economic strength. There are timeless constitutional protections involved, as those at the forefront of our innovation economy find new ways to create values around."

In fact, intellectual property-related agencies account for one-third of the U.S. gross national product, more than 60 percent of U.S. exports and almost 28 percent of U.S. jobs, Sperling said.

"The suits brought by patent trolls rose from 29 percent of all infringement suits to 62 percent in a two-year period," Sperling said. "They have threatened over 100,000 with patent infringement last year alone. One study found that during the years they were being sued for patent infringement, health-information technology companies ceased all innovation in that technology, causing sales to fall by a third compared to the firm's sales of similar projects not subject to [patent assertion entity]-owned patent suits."

At the press briefing, Secretary of Commerce Patty Pritzker and U.S. Patent and Trademark Office Deputy Director Michelle Lee presented a status report on President Obama's four executive actions:

  • Greater transparency in patent ownership.

    On Jan. 24, the White House issued a new rule that required patent holders to be public about who owns a particular patent.

    "If a business can go to the USPTO website and find out who owns what patents, they can more easily and efficiently allocate their precious R&D dollars to avoid infringement or to design around the patent," Lee said. "It also helps facilitate technology transfers."

  • Greater scrutiny on patent claims that are too broad, especially those dealing with software.

    "We beefed up training for patent examiners, with clear guidelines to ensure the quality of our patents," Pritzker said.

    In the coming weeks, USPTO will launch a pilot program that uses glossaries to define terms within a patent to promote patent clarity.

    "We recognized that a patent with clearly defined boundaries provides notice to the public to help it avoid infringement, as well as avoiding costly and needless litigation down the road when the patent is in litigation," Lee said.

  • Helping citizens and "main street" businesses who suddenly find themselves involved embroiled in patent litigation.

    On Thursday, USPTO launched a new online tool to help consumers and businesses understand what their rights are when they face patent litigation.

    "These resources will help level the playing field for smaller, main street retailers and consumers, those who are not steeped in patent law or who cannot afford to hire a team of patent attorneys, with a variety of complementary resources," Lee said. "These include ways to find out information about the patent being asserted."

  • Increasing public research and outreach.

    "We're expanding a program for scholars who will study patent litigation issues," Pritzker said. "And, with regards to outreach, we'll engage with more trade associations, business groups, advocacy organizations and civil society leaders ... to help you navigate the patent system and to ensure that our programs are keeping pace with industry."

In addition, USPTO will utilize crowdsourcing in order to get more documentation, such as "prior art" of a particular patent.

"This will help patent examiners make better decisions about whether an invention is worthy of a new patent," Pritzker said.

The administration will make it easier for engineers and technology leaders from businesses and universities to help with the training of patent examiners.

"This will improve the quality of patent examinations and ensure that the knowledge base of our PTO employees stays strong, relevant and up to date," she said.

USPTO will also dedicate more staff to providing pro bono support for small businesses and inventors who are apply for patents but can't afford to pay for legal help.

"We'll scale up our pro bono program and hire someone to coordinate pro bono work in all 50 states," Pritzker said. "Our country must simply support our trailblazers who make breakthroughs in their garages and dorm rooms."

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