New US bill aims to zap patent trolls with transparency demands

VC club prez complains he doesn't wanna go back under his bridge

The US Senate Judiciary Committee has recommended that the "Protecting American Talent and Entrepreneurship Act 6 of 2015" be accepted.

The committee voted 16-4 in favour of the bill (Patent bill S.1137, PDF), which aims to reduce patent trolling and, it is said, uncover who is taking an action and why.

The bill stipulates that claims must detail not just which patents are being infringed, but how. This removes the opportunity to file vague claims in the hope that the company being sued will pay the troll to go away. Giving specific details opens the way for defendants to debunk claims.

If passed into law, the bill also delays the expensive process of discovery until prosecution has progressed, so that those being sued don’t have to get embroiled in expensive research before deciding what to do.

Under the bill, claimants cannot hide behind shell companies set up for trolling because all parties who stand to gain from the action must be listed in it. If the action fails, there could be recourse to those companies for costs. The act stipulates a higher burden of costs on claimants and looks at the history of similar claims from the claimant and associated companies.

It also aims to protect customers of those companies being sued. One tactic trolls use is to go after manufacturers or even end users of disputed technology. Under the new act they could not be approached if the supplier is also involved in federal court litigation.

The US National Venture Capital Association has reacted strongly, opposing the act by claiming that it damages startups. Bobby Franklin, president and CEO of the NVCA, said: “We remain concerned that the changes to the patent litigation system being proposed will make it harder for any patent-reliant startup to defend its intellectual property, and must be moderated to avoid the unintended consequences that will impact investment in innovation and entrepreneurship.”

It’s good to know that his loyalty is to small startups and not to venture capitalists who are taking a bath as the result of backing patent trolls which have failed in their actions. ®

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