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White House to Curb 'Patent Trolls'

June 5, 2013
"Patent trolls" hijack ideas and take other companies to court with an eye to collecting license or royalty fees.

WASHINGTON -- The White House moved Tuesday to crack down on abuses of the patent system, responding to mounting concern among technology companies over a flood of litigation which some say stifles innovation.

The latest moves target so-called "patent trolls" which, according to the White House, "hijack" ideas and take other companies to court with an eye to collecting license or royalty fees.

President Barack Obama issued five executive orders and called for new legislation to update a reform enacted in 2011.

"Innovators continue to face challenges from patent assertion entities... that, in the president's words 'don't actually produce anything themselves,' and instead develop a business model 'to essentially leverage and hijack somebody else's idea,'" the statement said.

White House top economic aide Gene Sperling said there has been "an explosion of abusive patent litigation" in recent years. "In the last two years, the number of lawsuits brought by patent trolls has nearly tripled," Sperling said.

"The victims of patent trolls paid $29 billion in 2011, a 400% increase from 2005 -- not to mention tens of billions dollars more in lost shareholder value."

One of the signed orders calls for patent holders to have by default a "real party-in-interest" in a patent. The order is aimed at creating more transparency by disclosing the true owners of patents and at preventing the use of secretive "shell companies" to hoard them.

The president also signed measures aimed at ensuring "overall patent quality" to reduce the number of vague or broad patents which can be used to sue inventors. The move drew praise from many US technology lobbying groups.

The White House action will help in "reining in abusive patent litigation," said TechAmerica's Kevin Richards.

"With the bipartisan support this issue enjoys, those great minds who are creating the next disruptive technology in their basement or dorm room can look forward to a system that preserves their idea."

Gary Shapiro, president of the Consumer Electronics Association, also hailed the move, saying Obama's action "is on the side of innovation and job creation and against the spineless parasites of society who ruin American businesses."

Julie Samuels at the Electronic Frontier Foundation called the actions "big news" which address "dangerous aspects of the patent troll business model."

-Rob Lever, AFP

Copyright Agence France-Presse, 2013

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