White House Announces Executive Actions Designed to Combat Patent Trolls

by Dorsey & Whitney LLP

Last week, the White House announced new executive actions characterized as initiatives “to combat patent trolls and further strengthen our patent system and foster innovation.” This marks a continuation of the White House’s efforts to protect innovators following passage of the Leahy-Smith America Invents Act (AIA) in 2011. While the executive actions may result in an increasing amount of user-friendly behavior by the U.S. Patent and Trademark Office, it remains to be seen if the executive actions will have any effect on patent assertion entity (PAE) activity.

Last week’s announcement introduced three new executive actions designed to encourage innovation and strengthening the quality of the patent system. The first action aims to “crowdsource” prior art by allowing “companies, experts, and the general public” to help examiners and applicants in locating relevant prior art. The second action aims to expand technical training for patent examiners to become better technologists. The third action aims to introduce a pro bono system to assist inventors who lack legal representation. The executive actions are intended to be carried out by the U.S. Patent and Trademark Office using pilot programs for patent examination, website updates, and a scholar program to expand patent outreach. Finally, the announcement renewed the call for more meaningful legislation combat PAEs.

If anything, these measures may signal the White House’s dissatisfaction with the AIA as a mechanism for reducing patent litigation from PAEs. Moreover, while the executive actions have the intention of increasing patent quality, they fail to answer difficult questions, such as what exactly makes one patent “higher-quality” than other patents, or what makes an entity a “patent troll.” The White House suggests in these actions that higher quality patents may follow when examiners are up to date on technology and when a greater breadth of prior art is on the record during examination. However, it is unclear whether more prior art will actually be submitted in a “crowd source” system, given that several mechanisms currently exist for the public to provide prior art for review by an Examiner. Moreover, it is unclear what effect, if any, these measures will have in terms of curbing PAE lawsuits. The executive actions do not target any particular type of entity, nor do they provide any restrictions on litigation activity.

The public is, however, likely to see more usable information coming out of the U.S. Patent and Trademark Office. For example, as a result of Executive actions, the Patent Office has now made available a Beta website intended to answer common questions held by those who receive demand letters from a patent holder. See http://www.uspto.gov/patents/litigation/. The initiatives directed toward identification of the “real party in interest” have culminated in Patent Office proposed rules which may ultimately make it easier for the public not just to understand the party behind a patent assertion, but also to reach out to patent holders for licensing or technology transfer information. See 79 Fed. Reg. 4105-4121 (Jan. 24, 2014).

Back in June of 2013, the White House issued a memo from the “White House Task Force on High-Tech Patent Issues” introducing five executive actions and seven legislative recommendations to ensure only patents of the “highest-quality” are issued from the Patent Office.

The 2013 task force memo recommended legislative measures to 1) require patentees and applications to disclose the real party in interest; 2) permit more discretion in awarding fees to the prevailing parties; 3) expand the PTO’s transitional program to expand the scope of business method patents to include computer-enabled patents; 4) protect off-the shelf use by consumers and business; 5) change the ITC standard for obtaining an injunction to better align it with eBay v. MercExchange; 6) increase transparency in demand letters; and 7) ensure that the ITC has flexibility in hiring qualified Administrative Law Judges.

Last week’s announcement catalogues progress on these issues as well as introducing new executive actions tailored toward the same purpose. Both the 2013 memo and last week’s announcement include a renewed call for congressional action on the issue of patent trolls and patent litigation. It remains to be seen how the legislature will respond.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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