We have recently posted on various developments relating to the surge of litigations involving non-practicing entities, or patent assertion entities, also called “patent trolls.” Last week, the Obama administration launched its latest attack on these litigious parties.
Last Tuesday, the President issued seven legislative recommendations and five executive orders aimed to reduce the number of patent troll cases being filed in federal court. Those recommendations and orders can be found at the White House’s website.
Reviewing these, it appears that the President’s actions will have nominal impact on the patent troll epidemic, but certain of his legislative recommendations — which many practitioners have been advocating for years — may help buck the trend. Though well-intentioned, the Executive Orders announced last week, including Patent Office training, education and outreach, will do little to address the economic incentives fundamental to the non-practicing entity model. But, legislative proposals aimed to strengthen § 285 of the Patent Act (regarding the award of attorney fees), if enacted, might make trolls think twice before filing lawsuits.
Even without such legislation, District Courts can help by using their current sanctioning power more frequently when appropriate. Chief Judge Randall Rader of the Court of Appeals for the Federal Circuit made such an argument last week in an op-ed piece in The New York Times. Referencing § 285 and Rule 11 of the Federal Rules of Civil Procedure, Judge Rader explained that while courts currently have the tools to address the problems connected with certain patent troll litigations, they are seldom used. To this point, his closing words are instructive “Judges know the routine all too well, and the law gives them the authority to stop it. We urge them to do so.”.