August 9, 2011

Problem #Patent Trolls Inspire New #Legislation

The increase in patent litigation has moved #Congress to consider legislation to stem the practices of "patent trolls:" individuals and companies that use patents to license revenue from other companies or to file-patent infringement lawsuits -- rather than to build and sell products using the patented inventions. Several other changes to U.S. patent law are also under consideration.
Patent trolls' aims are not to further innovation in products or services. Instead, they hold a patent, much like a stock investment, until it can be licensed to another company that is developing a similar product using the patented technology. Or, if a competing product actually comes to market, patent trolls file infringement lawsuits in the hopes of cashing in on their patent investment. 
Patent trolls have been an especially difficult problem for companies to manage. They are reminiscent of cyber-squatters who bought up Internet domain names during the dot-com boom, and, because of patent trolls' behavior, patent-infringement legislation is growing at an incredible pace. In the U.S. District Court for the Eastern District of Texas (where many of patent-infringement lawsuits are initiated), filings in 2010 increased by 20 percent compared to 2009. 

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