Senator Schumer Set to Introduce Patent Troll Legislation

Senator Charles Schumer (D-NY) has announced that he will introduce legislation to combat so-called “patent trolls,” or entities that purchase patents from inventors solely for the purpose of suing legitimate businesses creating or using products closely related to that covered by the patent.

The legislation that Sen. Schumer plans to introduce will allow patent claims to be reviewed by the U.S. Patent and Trademark Office (PTO). This expands a temporary program sponsored by Sen. Schumer and former Sen. Jon Kyl (R-AZ) that allows for post-grant review by PTO of challenged patents to include more industries, including the technology industry. This process would serve as an alternative to bringing suit in court.  Sen. Schumer cites that patent trolls brought $29 billion in frivolous lawsuits in 2011 alone. The number of suits brought just in New York has risen 75% since 2006.

This has been an increasing problem for the advertising industry. ANA and the 4A’s have set up a task force to examine the issue.

There is also legislation pending in the House of Representatives, introduced by Reps. Peter DeFazio (D-OR) and Jason Chaffetz (R-UT).  Their bill, the SHIELD Act (H.R. 845), would allow for the recovery of the costs of litigation by anyone that can prove they were wrongly sued for patent infringement.  

If you have any questions, please contact Dan Jaffe in ANA’s Washington office at 202-296-2359 or at djaffe@ana.net.