ITC announces new plans to target patent trolls
The US International Trade Commission (ITC) has launched a pilot programme aimed at reining in non-practising entities that own and assert patents without making products.
The entities, commonly referred to as patent trolls, have caused controversy, allegedly filing unnecessary and costly lawsuits.
US President Barack Obama recently pledged to tackle the trolls with legislative reforms.
Measures announced on Monday, June 24, could ask them to prove they have existing or established domestic industry in the US in order to continue with legal proceedings at the ITC.
The ITC, claims in a statement on its website that it will identify, at institution, investigations that are likely to present a potential issue.
“One such issue could be the existence of a domestic industry [manufacturers that produce goods within their country of residence]. A key determination in the course of a section 337 investigation is whether an industry in the United States exists or is in the process of being established. If the ITC finds that there is no domestic industry, no remedies can be provided under the law,” the statement says.
According to Rory Radding, partner at Edwards Wildman Palmer LLP and chair of the ITC group at the firm, the new measures could act as a deterrent to companies who use patents as “weapons” to sue others.
He said: ““On the whole the ITC seems to be addressing its domestic industry requirement by targeting the standard for demonstrating sufficient licencing.
“A lot of patent trolls have established licensing businesses. However, I think the new scheme will potentially act as a barrier to trolls who don’t want to expend a lot of money, the type of trolls who buy a patent and use it as a weapon to sue companies are not going to be prepared to do the up-front work to prove they have domestic industry so it will have a deterrent effect on them.”
Radding added: “I am not totally against patent trolls in principle but I think the current wave is overdone and can result in extortion in some instances. On the other hand, I do think if you have an exclusive right you should be able to assert it and there is nothing wrong with licencing it to someone if they can use it in the right way.”
A further measure in the ITC’s pilot plan is to demand that an initial ruling on domestic industry viability is given within 100 days, a move which Steven Auvil, partner at Squire Sanders LLP welcomed.
“The procedure could be a very useful way to weed out cases that don't belong in the ITC and strip patent trolls of the leverage associated with the mere possibility of obtaining an exclusion order,” he told WIPR.
“There is no question that the ITC has the authority to manage its docket so as to weed out cases that should never have filed in the venue. I applaud the ITC's decision to expand the 100 day procedure,” he added.
The Commission is set to evaluate the results of the pilot program to determine whether to release specific rules and implement this procedure on a permanent basis.
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