Rising concerns about patent-assertion entities (PAEs) or "patent trolls"—companies that use patents primarily to demand license fees, rather than to promote new technologies—have spilled into popular outlets such as NPR and the New York Times. In 2012, the majority of patent lawsuits were brought by PAEs. Even Judge Posner has weighed in on how to get rid of trolls and the tax they put on innovation. But defenders argue that PAEs actually promote innovation by helping small inventors prevent other companies from stealing their ideas. In fact, the term "troll" was coined by the founder of a PAE to refer to bad actors who extract nuisance settlements with specious patents; he argues that saying all patent assertion is bad is like concluding that all personal injury litigation is bad simply because some people game the system.
Because of the increasing prominence of PAEs in the patent system, in the America Invents Act, Congress specifically required the GAO to conduct a study on PAEs, including the cost of the suits they bring and their "benefit to commerce, if any." The report was due September 16, 2012, but has been repeatedly delayed. The DOJ and FTC also held hearings in December on PAEs, which included dueling panels on their costs and benefits. The recently reintroduced SHIELD Act, which would require certain PAEs to pay attorneys fees if they lose a patent lawsuit (but not collect them if they win), has been the subject of much commentary, including both praise and criticism.
Should anything be done about PAEs? What roll should courts, the PTO, and private parties play? How does the proliferation of university patents fit in? Is the SHIELD Act a good idea? What questions still need to be answered? Come hear thoughts from some experts in the patent troll debates in a special lunchtime panel on Tuesday, April 16, 12-2pm, in room 127 at Yale Law School.
Lisa Larrimore Ouellette, a Thomson Reuters Fellow at the Information Society Project at Yale Law School, will moderate a discussion among these panelists:
This event is co-sponsored by the Information Society Project and the Yale Journal of Law & Technology and funded through the generous support of the Kauffman Foundation.