The most unproductive Congress in history is on a mini-roll: the House of Representative passed its second piece of tech legislation this week. The Google and White House-backed Innovation Act seeks to punish so-called “patent trolls” that make a living from intellectual property lawsuits.
“They don’t actually produce anything themselves. They’re just trying to essentially leverage and hijack someone else’s idea to see if they can extort some money out of them,” said President Barack Obama in a Google+ Hangout earlier this year.
There are a few key troll loopholes that the act from Representative Bob Goodlatte seeks to close.
Transparency: Patent trolls can often win money by threatening to sue innovators without much detail or by hiding behind shell corporations. The Innovation Act requires plaintiffs to detail their complaints and who they actually are. For instance, infamous patent troll Intellectual Ventures has 1,000 companies asserting patent rights*.
Losers Pay: There’s not much financial risk for patent trolls to sue innovators en masse, so the Innovation Act makes it easier for defendants to recoup their loses should they win (an often easy) case. It also denies patent trolls the ability to hide behind smaller shell companies to avoid such losses.
Protect Users: Some patent trolls are brazen enough to claim they own key patents on Wi-Fi (yes, Wi-Fi), so they’ve been suing everyone from coffee shops to hotels. “The Innovation Act allows technology vendors to step into the shoes of their customers and fight lawsuits against trolls on their customers’ behalf,” says the Washington Post’s Timothy Lee.
While most of the tech scene supports it (including the major lobbies such as The Internet Association and the Consumer Electronics Agency), not everyone is thrilled. “The bill will have unintended consequences that the people who drafted it don’t yet see,” Kentucky Republican and holder of 29 patents, Thomas Massie, told Businessweek. He claims the bill will “weaken the patent system overall.”
In addition, TechDirt’s Mike Masnick argues the bill stripped out an important provision to expedite the removal of low-quality patents, often held by big players such as Microsoft and Apple.
The bill will head to the Senate to continue the fight, but it’s unlikely it’ll pass by the end of the year.
*Update: Intellectual Ventures disputes the claim that they are a patent troll. In response, we have updated the link and included part of their email to us below.
“That is not true and I don’t see a source for the claim (You link to a Mark Cuban interview but it doesn’t say anything about Intellectual Ventures). Could you correct it?”