Still more legislation is introduced to limit infringement suits by non-practicing entities

Dennis Crouch in Patently-O offers an explanation of two recently introduced bills that would affect the market for patents, at least the market as now defined by Non-Practicing Entities (NPEs).

H.R. 845, the SHIELD Act, would require the patent-holder plaintiff to post a bond to guarantee payment of attorney fees of the defendant should plaintiff not prevail. That bill would affect cases where:

1. the party lodging the infringement complaint is not the original inventor or original assignee;

2. the party bringing suit does not use the patent in the product or sales of a product.

The bill would also exempt the U.S. government and universities.

S.1013, the Patent Abuse Reduction Act of 2013 would require plaintiffs in patent infringement suits to reveal the identities of all interested parties when they file suit.

As reported most recently in National Law Review, the average legal cost for defending patent infringement remains about $3 million. As to be expected, SME defendants tend to settle rather than pay the high attorneys’ fees, even if the lawsuit is frivolous or weak.