US plans action against patent holding firms

US plans action against patent holding firms

Last Tuesday the White House announced that President Barack Obama will take actions aimed at reining in certain patent holding firms, known as “patent trolls” to their detractors, amid concerns that the firms are abusing the patent system and disrupting competition, writes the Wall Street Journal

Among the measures to be taken also Congress will be involved in order to target firms that have forced technology companies, financial institutions and others into expensive litigation processes in order to protect their products. These patent-holding firms amass portfolios of patents rather to pu8rsue licensing fees than to build new products.

Of course the firms state that they are not doing anything wrong, just making use of patents that were legally granted the U.S. Patent and Trademark Office and they pretend to promote a fair market by protecting smaller inventors.

The Obama administration plans that the Patent and Trademark Office is to start a new rule requiring patent holders to disclose the owner of a patent. Businesses are often sued by shell companies and not knowing who actually owns the patent they are being accuses of infringing, and whether the firm hols other relevant patents. Congress should pass legislation allowing sanctions on litigants filing lawsuits deemed abusive by courts.

These actions and recommendations will be released as part of a report on patent holding firms.

It is interesting to note that there is a growing use of the International Trade Commission (ITC) to settle patent disputes, because patent holding firms have increasingly filed infringement claims with ITC having jurisdiction over certain unfair trade practices and it can bar the importation of products that infringe patents. The ITC process usually moves faster than a patent infringement case in federal court. The Administration would want Congress to change certain ITC legal standards to allow the agency more flexibility in hiring its judges. In addition, The Federal Trade Commission and Justice Department are examining if some patent holders are disrupting competition in high tech markets. 

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