President Takes Action to Curb Frivolous Patent Lawsuits

June 4, 2013

President Barack Obama took steps on Tuesday intended to limit frivolous patent lawsuits, a practice referred to as “patent trolling.”

Lawsuits brought by companies that do not make or sell anything but merely license patents and sue others for infringement have ballooned in recent years, creating expense and aggravation for businesses, particularly in the technology sector.

Obama’s executive actions were aimed at improving incentives for high-tech innovation, a major driver of economic growth, the White House said in a statement. The White House also urged Congress to take further action to reform patent laws.

“Stopping this drain on the American economy will require swift legislative action, and we are encouraged by the attention the issue is receiving in recent weeks,” White House spokesman Jay Carney said in a statement.

Cisco Systems Inc, Apple Inc, Google Inc and other big technology companies have been pushing for legislation that would reduce the number of times each year that they are sued for infringement by trolls.

Congress is working on legislation on the matter.

In the meantime, Obama took executive action to direct the U.S. Patent and Trademark Office to work on new regulations to make it harder for “patent trolls” to hide their activities using shell companies, the White House said.

The rules will require patent applicants and owners to update ownership information when they are involved in patent lawsuits.

The government’s patent office will also do more training for its examiners to try to prevent software patents with overly broad claims, and will provide clearer information for retailers and consumers who find themselves facing litigation from a “patent troll,” the White House said.

Companies with websites or that provide Wi-Fi services have increasingly found themselves defending lawsuits from patent trolls.

The White House said Congress should pursue legislation that would create more transparency in the patent system, provide more discretion for district courts to punish patent trolls, and protect consumers and businesses who buy technology products from being sued by trolls.

(Reporting by Mark Felsenthal and Roberta Rampton; Editing by Paul Simao and Will Dunham)

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