Recent Supreme Court Patent Decisions Curb Patent Trolling; Lawsuits on the Decline

Patent lawsuits are reportedly on the decline although the last decade has been a successful one for patent trolls. The number of patent troll lawsuits filed between 2003 and 2013 increased six times. However, the number of lawsuits filed by non-practicing entities is set to decline this year.

According to some patent attorneys, the decline can be attributed to a series of Supreme Court decisions that has put a tire iron in how patent troll’s function. Patent trolls have taken advantage of the situation by opting for a litigation process that proves costly for defendants. In many cases, the defendants end up paying the troll in order to avoid a lawsuit even though the suit may not be justified.

Patent Trolls to Take a Backseat

For the most part, from a defendant’s point of view, patent lawsuits can prove to be very expensive where plaintiffs could claim millions of dollars in costs without having to spend much themselves. The USPTO has issued numerous vague software patents ever since the Court of Appeals for the Federal Circuit relaxed its standards for software patents in the 1990s.

According to patent attorneys, there are some Supreme Court decisions that assist companies being trolled. The Court in some cases has made it easier to challenge the validity of a vague patent and allow the defendant to recover legal costs if the judge deems the plaintiff’s suit as being without substance.

Inter Partes Review System

Among the top companies to be at the receiving end of patent lawsuits include Microsoft. The software giant recently won a lawsuit against SurfCast, a patent troll that filed a lawsuit claiming that its patent was violated by Microsoft’s Live Tiles, a feature used in Windows and Windows Phone. Over the past two years, companies have been able to deal with trolls with the introduction of the new Inter Partes Review system under the America Invents Act, which came into effect September 16th, 2012.

The system involves a petition asking for a group of officials to review how a patent owner interprets the claim. According to patent lawyers, this is one of the ways in which companies can challenge patent trolls and make it tougher for them to file any patent infringement lawsuit after the review. If a patent troll cannot provide an appropriate answer on how they interpret the claim, they will not be eligible for further action.

USPTO Tightens the Strings

In Alice Corp. v CLS Bank, the Supreme Court ruled that no company can claim a patent just by implementing an existing business method. Alice Corp. is a patent troll that received a patent on the general idea of handling escrow accounts on a computer. The highest court ruled that the simple notion of “doing it on a computer” was drawn to an abstract idea that was not eligible for a patent. This ruling made the USPTO tighten its rules on granting business method patents. The agency has issued less than half the number in the last month as compared to previous months post the Alice Corp. v CLS Bank decision.

By | 3:52 pm | Categories: Patent Lawyer News | 0 Comments

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