Patent trolls cost the U.S. economy almost $30 billion each year. But now Congress has an opportunity to save that money and help innovators sleep a little better at night.
The SHIELD act — Saving High-Tech Innovators from Egregious Legal Disputes, there must be a silly names contest for American legislation — would force patent trolls who lose frivolous cases to pay their defendants’ legal costs.
From the act preamble:
… to provide for the recovery of computer hardware and software patent litigation costs in cases where the court finds the claimant did not have a reasonable likelihood of succeeding, and for other purposes.
Essentially, SHIELD would increase the riskiness of the patent trolling business model. With the potential for vastly higher costs, deciding to sue becomes a harder decision … and suing companies using ridiculous patents becomes less attractive.
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Representative Peter DeFazio from Oregon, who sponsored the bill with Representative Jason Chaffetz from Utah, certainly gets the issues:
“Patent trolls don’t create new technology and they don’t create American jobs,” DeFazio said in a statement. “They pad their pockets by buying patents on products they didn’t create and then suing the innovators who did the hard work and created the product.”
The Electronic Frontier Foundation agrees, with staff attorney Julie Samuels writing: “Finally, a moment of sanity.”
The courts system has recently shown signs of being less eager to be the patent trolls heavy, but despite the America Invents act of 2011, it’s been a tough slog passing substantive patent reform. (Although more patent offices and patent review officers is one step.)
This bill is music to the ears of executives like Build.com CEO Chris Friedland, who I interviewed a month ago. Build.com was fighting patent lawsuits from as many as five trolls and formed patent defense pools to spread the legal costs.
“Frankly, the absurdness of some of this stuff is just ridiculous,” Friedland said at the time. “Are you going to patent wiping your ass?”
Perhaps, with SHIELD, there will be less point to … since the courts will no longer be a cash machine for trolls.
Image credit: Songquan Deng/ShutterStock
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