Patent Reform: A small step that could make a big difference

A few days ago, Rep. Peter DeFazio introduced the SHIELD Act, a new law that aims to deter frivolous patent infringement lawsuits. The bipartisan bill is co-sponsored by Rep. Jason Chaffetz.

The core problem: companies who abuse the patent system by threatening thousands of small businesses with legal action without even checking if products truly infringe on a patent. Most of the target companies end up paying the fee rather than going through a lengthy and expensive litigation process, even if the patent doesn’t even remotely apply to their products.

The proposed solution: Giving the judge the power to make the attacker pay for the legal expenses of the defending party if the law suit had no realistic chance of winning. That will make a patent troll will think twice before adding a company to the list of parties to sue: if the patent they claim is being infringed is not even relevant to the target company’s product, they’ll be on the hook not only for their own lawyers but for all the legal expenses of the other party as well.

ACT applauds Rep. DeFazio for taking a creative approach to address a complex problem that too many of our member companies have faced first-hand. We also want to make sure that our members have have worked years on legitimate innovations can protect them without additional financial risk. Good news related to patents is not something you see every day: finally things are moving in the right direction.