Proposed US legislation takes direct aim at patent trolls

US House of Representatives members DeFazio (D-Oregon) and Chaffetz (R-Utah) have introduced legislation that would require a losing party in a patent infringement or validity lawsuit to pay the other side's legal fees if the lawsuit "did not have a reasonable likelihood of succeeding", but only for computer or software patent lawsuits. The bill is called the SHIELD Act, or the "Saving High-tech Innovators from Egregious Legal Disputes" Act.

For the first time, this legislation would define "Software Patents", currently phrased as "a patent that covers any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent" or "any computer system that is programmed to perform a process".

The sponsors of this bill are targeting patent trolls (or non-practicing entities) - companies that develop or sell no products or services but instead exist solely to aggregate patents and sue others for infringements of those patents. In a press release, Representative DeFazio is quoted:

Patent trolls don't create new technology and they don't create American jobs. They pad their pockets by buying patents on products they didn't create and then suing the innovators who did the hard work and created the product. These egregious lawsuits hurt American innovation and small technology start ups, and they cost jobs. My legislation would force patent trolls to take financial responsibility for their frivolous lawsuits.

It's not clear how moving to a "loser pays" system only for software and hardware patent litigation will do much to mitigate the problem, but the fact that lawmakers are now targeting patent trolls is significant.

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