White House Issues Long Overdue Orders and Recommendations to Curb Patent Trolls

Date:  Tue, 2013-06-04

WASHINGTON, D.C. – Today, President Barack Obama issued Executive Orders to bring transparency to the patent system and curb Patent Assertion Entity or “Patent Troll” activities (Citation – Summary: HERE, Full Report: HERE). These orders and recommendations echo several of Dr. David Martin’s previously proposed suggestions and changes.

On May 10, 2001, M·CAM’s Dr. David Martin testified before the U.S. House of Representatives Committee on the Judiciary, Subcommittee on Courts, The Internet, and Intellectual Property in a Hearing dedicated to, “Patents: Improving Quality and Curing Defects.” (Hearing text: HERE) Dr. Martin’s testimony and report (pages numbered 26-53) called for an overhaul of USPTO procedure and called for several quality interventions. These remarks were enhanced in 2004 when Dr. Martin testified at the U.S. Senate Finance Committee Roundtable on Patent Donations. (Comments: HERE) Furthermore, in January of 2013, Dr. David Martin made comments in support of transparency and recording Real Party In Interest at the USPTO Real Party in Interest Roundtable. (David Martin Comments begin on P.107 and Questions on P.123; Full Transcript: HERE)

In summary, the Presidential Executive Orders and Legislative Recommendations are summarized as follows:

“LEGISLATIVE RECOMMENDATIONS:

In that spirit, the Administration recommends that Congress pursue at least seven legislative measures that would have immediate effect on some major problems innovators face. These measures would:

1. Require patentees and applicants to disclose the “Real Party-in-Interest,” by requiring that any party sending demand letters, filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance.

2. Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases).

3. Expand the PTO’s transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).

4. Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use. Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer.

5. Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.

6. Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.

7. Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.

EXECUTIVE ACTIONS

Today the Administration is also announcing a number of steps it is taking to help bring about greater transparency to the patent system and level the playing field for innovators. Those steps include:

1. Making “Real Party-in-Interest” the New Default.

2. Tightening Functional Claiming.

3. Empowering Downstream Users.

4. Expanding Dedicated Outreach and Study.

5. Strengthen Enforcement Process of Exclusion Orders.”