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Patent “holders” who bring frivolous lawsuits could be forced to pay the legal costs of defendants under proposed legislation. A bi-partisan bill would apply to trolls and “legitimate” users alike.
The proposals would, if passed into law, become the “Saving High-Tech Innovators from Egregious Legal Disputes Act” (or SHIELD.) The big difference is that a court would be able to force a plaintiff to pay defense costs if it decides the claim “did not have a reasonable likelihood of succeeding.”
Congressman Peter DeFazio said the bill was aimed at patent trolls who buy up patents and effectively scare legitimate businesses into making a settlement because they fear risking a million dollars or more in legal costs by defending themselves in court: “Patent trolls don’t create new technology and they don’t create American jobs… My legislation would force patent trolls to take financial responsibility for their frivolous lawsuits”
However, as ArsTechnica spotted, the precise wording of the bill doesn’t appear to restrict the measures to patent trolls. Even companies that are actively producing the product covered by their patent would still be affected if they brought a case deemed frivolous. That could risk deterring small firms who have genuinely been ripped off by major competitors from taking action.
Realistically there seems little prospect of the bill becoming law. Even leaving aside the struggle any bill faces to make it through the legislative process, SHIELD opens a tricky can of legal worms.
The bill is designed to cover software patents, but there’s some dispute about whether software can be patented rather than it simply being a case of code being copyrighted. As a very rough rule of thumb, lower courts are perfectly happy to hear software patent cases, while on the very rare exceptions that a case gets to the Supreme Court, it’s not yet established that software patents will hold.
That’s led to some awkward wording in SHIELD, which tries to define what a software patent is, without taking any legal responsibility for establishing that a software patent is indeed valid. If SHIELD did take effect, that would likely be a red alert for more creative lawyers.
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