Obama slams NPEs in fireside hangout


US President Barack Obama discussed plans for further patent reform in the yearly fireside hangout on Thursday, during which he criticised the actions of non-practising entities (NPEs).

The fireside hangout is a video chat discussion hosted by Google that allows a select group of diverse Americans active in the Internet community to talk to the President about the issues raised in the State of the Union address, which was given on Wednesday.

“They’re [NPEs] just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them,” he said during the fireside discussion.

During the talk Obama spoke to Limor Fried, an engineer and founder of electronics company Adafruit Industries, who is concerned that smaller software businesses cannot afford to defend themselves in patent disputes with NPEs.

Describing start-up companies as “an important engine of the American economy”, she asked the President whether he would consider cutting the length of software patent terms from 20 to five years.

Obama acknowledged that although the passing of the America Invents Act in 2011 had allowed progress in patent reform, the Act did not address all of the “problems” with US patent law.

He described the situation as challenging: “We... want to make sure the patents are long enough that people’s intellectual property is protected, [but we have] to balance that with making sure they’re not so long that innovation is reduced.”

Serge Krimnus, an associate at Cowan, Liebowitz & Latman in New York, said that shortening patent terms for technologies classed as ’software’ could lower the value of patents and any damages NPEs may receive in patent litigations. He added that a shorter patent term may make smaller companies less likely to seek patent protection on their products.

Speaking of a potential change in software patent terms, he said: “This law would not address the above issues and would likely do more harm than good to the United States patent system and American innovation.”

He added: “United States patent law has never discriminated between technologies with respect to patent term and I wouldn't expect that to change.

“Moreover, since 1995, patent term has been calculated from the effective filing date of a patent application.  Thus, if a patent’s term were to be reduced to five years, depending on the amount of time a patent application is in prosecution, there could be significantly less than five years of term remaining once the patent issues.

“I also note that it would be difficult for Congress to define exactly what constitutes a ‘software patent’.”

The fireside hangout is featured in the video below. Fried poses her question after 16 minutes.


Barack Obama, NPEs, fireside hangout, SMEs, software patents

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