“Shield Act” Introduced to Thwart NPEs . . . .

We previously reported on the new 35 U.S.C. § 299 of the America Invents Act. This statute aims, inter alia, to reduce the ability of a patent owner to join multiple, unrelated defendants in a single action, which is a tactic often employed by non-practicing entities (“NPEs”), sometimes referred to as “patent trolls,” who press defendants for nuisance value settlements.

Last week, a bipartisan bill entitled “Saving High-Tech Innovators From Egregious Legal Disputes Act of 2012,” (“Shield Act”) was introduced in the House of Representatives to permit fee-shifting in patent litigations involving computer hardware and software.

The proposed legislation, introduced as HR 6245, states in pertinent part that “upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the Court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.” Aimed to curb suits brought by NPEs that are frivolous or otherwise lacking merit, HR 6245, if passed, could have significant ramifications going forward in the field of computer hardware and/or software patents.

Gibbons will continue to track the progress of this proposed legislation, as well as other developments relating to the America Invents Acts.

Ralph A. Dengler, a former Director in the Gibbons Intellectual Property Department, and Todd M. Nosher, a former Associate in the Gibbons Intellectual Property Department, co-authored this post.
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