New legislation introduced to reign in NPE activity

On Wednesday, 02/28/2013, Representatives Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) introduced legislation that would make plaintiffs liable for defendants’ legal costs should a patent lawsuit be unsuccessful.

Dubbed the SHIELD Act, and then laughably reverse engineered “from” the backronym Saving-High Tech-Innovators from Egregious Legal Disputes, the bill appears to have bi-partisan support (and clearly has third-party, grass roots support) as it addresses the complaints from technology companies that are being threatened with lawsuits by non-practicing entities (NPEs), so-called “patent trolls.”

The Hill reports plaintiffs would be exempt if they invented the patent or could show that they had made a substantial investment in trying to bring the patent to market. This is the second time around for like legislation.  This one has a better chance of passing, both because of the number of companies NPEs are now affecting and because the new legislation is broadened to include all companies, not just those in technology.