Patent Trolls and the New US Shield Laws: Relevance to Australian Patent Law
Friday 5 April 2013 @ 9.24 a.m. | IP & Media
At a general knowledge level it is understood by most that patents are used as a protective mechanism for inventions. However, it doesn't take much looking through the recent articles and commentary on patents to realise that in the view of many the patents processes are becoming more of a weapon. A weapon used to extract significant licence fees from people who come up with ideas or inventions by "Patent Trolls" who buy up patents for core process and procedures and then seek to enforce them on people already using them.
The US position and its new Law
In the USA in particular this has given rise to a new industry of "patent aggregation" or in the parlance of the online community "Patent Trolling". However, the US position may be about to change, as legislation known as the Saving High-tech Innovators from Egregious Legal Disputes (SHIELD) Act works its way through the US Congress with the stated intent of:
" ... protect[ing] American innovators and companies from frivolous patent lawsuits that cost jobs and resources. The SHIELD Act will put the financial burden on so-called “patent trolls” that buy broad patents on products they did not create and then file questionable lawsuits against companies for infringement."
Why the Law is needed
Those introducing the SHIELD Act claimed that in the US "Patent trolls drained an estimated $29 billion from American innovators and companies in 2011,” by buying patents on products they didn’t create and then suing companies from every industry for infringement. The lawsuits described as "egregious" were said to have spread to nearly every sector of the US economy, costing it billions of dollars and many jobs.
The SHIELD Act which is a bipartisan measure is claimed to be a targeted reform that will force patent trolls to take financial responsibility for their frivolous lawsuits thereby presenting a deterent to the practice.
A US Problem for all
The problem is seen to be a greater issue in the US where relatively unknown entities who may not make any products are able to lay claim to a core process employed by a commercially active software maker.
"It is no coincidence (though it is a much bigger topic that will need to wait for another day) that trollism is a unique feature of the US patent system – and it is not just that the US is a big market with many available targets. The US could eliminate patent trolls tomorrow, if it were willing to repeal its patent laws and replace them with something less troll-worthy, such as the provisions of the European Patent Convention, for example. Of course, this is not going to happen." (see Who’s Upset With the Patent System?)
For Australia, Patent Trolling is, as The Conversation points out "less of an issue in ... due to our strong Patents Act," (see in particular the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 No 35 commencing April 2013) but it can affect, in relation to alleged attempts to enforce patents for podcast technology in the US, "Australians with successful podcasts in the US [who] could be sued too."
Taking it further, it could potentially affect any Australian with a successful product in the US market.
Sources:
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