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29 April 2014Patents

Surge in ‘troll’ type lawsuits ahead of Innovation Act cut-off date

Non-practising entities (NPEs) have filed scores of lawsuits in the US the day before the cut-off date specified by a US patent reform bill designed to curb their activities.

A total of 184 patent complaints were filed in the US on April 23, the last day before the cut-off point from which the new law would retroactively take effect if it is passed.

The number is more than five times the daily average for lawsuits filed.

NPEs assert patents that they do not use with the hope of a large pay out. However, they are often accused of filing frivolous lawsuits.

Called the Innovation Act, the proposed bill aims to limit the power of NPEs, sometimes referred to as patent trolls.

The bill’s measures, which the complainants in the new lawsuits would potentially avoid, include making it more likely that losers will bear the costs of litigation.

Complainants would also be forced to explain their motive for filing a lawsuit and explain exactly how the patent in question was infringed.

However, according to technology blog Gigaom, NPEs were told that if the new measures enter into law, they are set to take effect only for lawsuits filed on or after April 24, regardless of when the bill is passed.

That date is also consistent with the original draft of the reform bill, which called for the measures to take effect six months from October 2013.

A post on the PatentlyO patent blog by Dennis Crouch, a professor at the University of Missouri School of Law, also named April 24 as the effective date.

The bill was first introduced by Representative Bob Goodlatte in October last year.

Backed by both major parties, the bill was passed by the House of Representatives in December by 325 votes to 91. It now proceeds to the Senate.

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