Obama to target patent trolls with executive actions

President to ask Congress and the U.S. Patent Office for new rules and legislation amid concerns the system is being abused and competition is being squelched.

The Obama administration will reportedly announce a set of executive actions on Tuesday aimed at reining in certain patent holders amid concerns they are abusing the current system and squelching competition.

President Obama will instruct the U.S. Patent and Trademark Office to initiate a rule-making process that would require patent holders to disclose the owner of a patent, senior Obama administration officials told The Wall Street Journal. He will reportedly announce five executive actions and seven proposed legislative changes, including asking Congress for legislation that would sanction litigants who file lawsuits deemed abusive by the courts.

Patent assertion entities (PAEs), also known as patent trolls, are created to extract licensing fees from other companies rather than make products based on the patents they hold. However, the percentage of patent infringement lawsuits filed by PAEs has increased dramatically in the past few years.

According to a study conducted last year by a patent law professor in California, about 62 percent of all patent lawsuits filed in 2012 up to December 1 were brought by PAEs, while PAEs were behind about 29 percent of patent litigation in 2010.

In 2011, Obama signed the Leahy-Smith America Invents Act, which changed the U.S. patent system into a "first-to-file" patent system as opposed to a first-to-invent system. The USPTO previously awarded patents based on when inventors had the idea, instead of when they filed a patent application.

However, the president said in February that patent reforms passed last year don't go far enough to fully protect entrepreneurs from software patent holders who try to exploit them. "We passed some legislation last year, but it hasn't captured all the problems," Obama said during a Google+ Hangout, hosted on YouTube.

Patents and intellectual-property protection have become an increasingly important topic in technology, with companies building up massive patent collections to fend off, as well as go on the offensive against, other companies. Most recently there's been the high-profile feud between Apple and Samsung, with the two companies suing each other in courts around the world for patent infringement. There have also been the spats between Google and Oracle, and Apple and HTC.

 

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