Controlling the Trolls (Part 3)

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Previous posts (found here and here) described some of federal, state, and private activities that are being implemented or discussed in order to curb patent troll activities.  I have a few additional thoughts that I believe would contribute to this effort and would likely improve the patent system as a whole.

Other Options

One of the main issues with patent trolls, and broad patents in general, is that there are few efficient and economical ways to challenge a patent’s validity.  The only option currently proposed that addresses this to some extent is Sen. Schumer’s idea, but even that is suspect because the USPTO is not necessarily the most effective arbiter of invalidity determinations (if they were, no one would use inter partes examination to make their own case before the Patent Trial and Appeals Board).  Importantly, making the process of challenging patents more efficient is beneficial to all who participate in the patent marketplace and to the public (which shouldn’t give monopolies to non-innovative ideas).

Changes to the process of patent proceedings in federal court could go a long way toward addressing this problem and improve the patent system as a whole.

  • Patentee Statement Regarding Meaning of Claim
    • Shortly after the start of the litigation (as part of the required disclosure process?), the patentee should be required to provide a detailed statement regarding the meaning of its asserted claims and how the claim relates to the infringing product/process.  This statement should be in sufficient detail so as to determine possible infringement by the potential infringer and supported by references to the patent.
    • Pros
      • Provides further detail regarding the basis of the claim against the potential infringer
      • Places the patentee in a position to make definitive statements about its patent without the aid of possible invalidating references or the patentees technology (neither of which are inherently relevant to the determination of a claim’s meaning)
    • Cons
      • May not provide enough detail to settle the suit
  • Accelerated claim construction
    • Claim construction should be held prior to any discovery, and the patentee should be required to provide its brief first.
      • Pros
        • Lower cost to parties
        • Presents potential infringer with a first cut as to whether it has valid non-infringement and/or invalidity arguments
      • Cons
        • Parties may not be fully aware of potential claim terms that will need to be construed (but, court can always subsequently construe if necessary)
  • Unless a preliminary injunction is awarded, invalidity of the patent should be determined first.
    • Pros
      • Places discovery further down the road
      • May allow for joint defense agreements between multiple interested parties – collective action against a patent troll
      • May change tactic of defendant to not use reexamination process at USPTO
    • Cons
      • If patentee is being squeezed from market by competitor who is infringing, this process may delay an award of infringement

Patent trolls will typically go after smaller companies in order to a) raise money for future litigation against bigger companies and to b) avoid litigation.  Thus, if there were a scheme by which smaller companies could thwart these initial advances by patent trolls, trolls may be less effective overall at extracting licensing fees.  In this regard, the state or private companies could establish a fund for invalidity challenges to patents.  The fund could finance, for example, the commissioning of an invalidity analysis, a challenge at the USPTO (reexamination), or even portions of the litigation (especially if the process above was adopted).

  • Pros
    • By allowing small companies to challenge patents this should cut off a significant funding source for trolls
    • Smaller companies would have a better opportunity to compete in the marketplace as they would not be readily extorted (assumption being that smaller companies have less ability to absorb unnecessary license fees)
    • Any company that contributes could be allowed access to the fund
  • Cons
    • There will need to be factors regarding contribution to the fund, access to the fund, and what the fund will pay for.  These factors are likely to exclude some and not others.
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