Tech companies have been pleading with
So far this year, President
Patents grant a monopoly over the use of an invention for a limited period, giving inventors a chance to recover their investments before competitors can duplicate their work for free. That protection is vital to industries with large research-and-development costs, such as the pharmaceutical industry. "Non-practicing entities" are companies or institutions (such as research universities) that aggregate patents in order to collect licensing fees, rather than to build and sell products based on those inventions. What sets trolls apart from other non-practicing entities is their habit of asserting ridiculously broad patents over well-established techniques, such as transmitting audio and video online, or stretching old patents to cover new technologies that weren't contemplated by the original inventor. They also tend to demand licensing fees that are higher than the patented technologies are worth but lower than the cost of defending against an infringement lawsuit.
A key provision of Goodlatte's bill would allow the manufacturer or supplier of an allegedly infringing product or component to intervene in suits brought against its customers — typically the end user of the product — shielding the latter while the court decides whether any infringement occurred. Some patent holders argue that the shield would be too broad, potentially blocking suits against those who profit from the use of infringing products. In fact, the bill would only delay such actions, and that's unfortunate. Ideally, Congress would ensure that those who use off-the-shelf products for their intended purpose simply cannot be held liable for any infringing technology inside them. The liability should rest solely on the manufacturer of the technology, not its customers.
The bill would also deter trolls from shaking down companies with lawsuits based on flimsy claims by requiring the losing party in an infringement case to pay the other side's legal fees, except when the court finds the loser's actions are "substantially justified." Some critics complain that the measure would make it too hard for small inventors to stop giant tech companies from stealing their breakthroughs. But small inventors are frequently the trolls' targets too — a good example being the lawsuits brought by Lodsys against smartphone application developers. And the changes advocated by Goodlatte and his cosponsors wouldn't stop valid claims of infringement based on good patents.