PublishedAugust 2, 2012

SHIELD Act Against Patent Trolls Introduced In House

Two members of Congress have introduced legislation to help innovators combat patent trolls.  HR 6245 co-authored by Congressmen Peter DeFazio, D-Ore., and Jason Chaffetz, R-Utah, would allow tech companies to recover litigation costs for nuisance lawsuits where the plaintiff made legal claims that had little chance of succeeding.

The legislation comes just after a Boston University Law School study found patent litigation by non-producing companies known as trolls cost the hardware and software industry $29 billion a year.

The patent reform bill last year unfortunately did not address this growing drain on innovation — junk lawsuits. Because tech products are interoperable and contain so many different components, the industry is particularly hurt by the rise of patent trolls — phony companies that don’t produce anything and exist mainly to sue other companies.

The bill, dubbed the SHIELD Act  (Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012) would help recover costs of computer hardware and software litigation cases. While this is not going to solve all the problems with our dysfunctional patent system, it is a step toward sanity and a step that will help staunch this drain on our economy.

CCIA has long advocated for a balanced patent system, with our CEO Ed Black explaining in a recent Forbes column “IP is Like Cholesterol” that our more is always better approach to patents is not a good recipe for innovation and economic growth.

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