The Obama administration announced on Tuesday five new executive actions that aim to curb so-called patent trolls that threaten to sue in order to obtain licensing fees, urging Congress to enact measures to protect high-tech businesses.
The high-tech industry has voiced concern about firms that acquire patent rights for a number of computer software and electronics components and threaten to sue users over technology they did not manufacture or invent.
One of the actions announced by Obama is a new rule that would require patent holders to reveal their affiliations with other firms. Some patent trolls establish shell companies to hide the details of their patent portfolios, Los Angeles Times reports.
The National Retail Federation praised the administration’s decision, saying retailers are distracted by patent infringement claims when they could be using their resources to create jobs.
“Patent trolls don’t target just national brands,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Small and medium-sized retailers are also being threatened and sued, and they are seen as easy prey because they don’t have the legal expertise or money to easily fight back. Congress needs to be sure Main Street businesses that play such a vital role in our local communities are protected.”
The NRF said that while 90 percent of the patent cases that make it to trial result in a loss for the patent troll, the cost of defending against the suit averages approximately $2 million and can take up to 18 months to settle, adding that patent litigation cases involving patent trolls cost businesses close to $30 billion every year.