Intellectual Property

Is There a Solution to the Software Patent Crisis?

, The Legal Intelligencer

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Larry Ashery
Larry Ashery

Patent trolls use discovery as a strong weapon to try to obtain a settlement. Discovery rules can require a defendant to disclose millions of documents. The expense to an accused infringer for producing such documents can be astronomical.

The Innovation Act bill referred to above requires that: "If the court determines that a ruling relating to the construction of terms used in a patent claim asserted in the complaint is required, discovery shall be limited, until such ruling is issued, to information necessary for the court to determine the meaning of the terms used in the patent claim."

By limiting discovery in the above manner, the costs and burdens of discovery would be removed from the arsenal that patent trolls use to coerce early agreement to their demands.

While many applaud the above proposals, some IP litigators express concern regarding the effect of these solutions on the ability of small companies and individual inventors to assert patent rights. Typically, those patent owners rely on venture capital to fund the suits against infringers of their patents. Would the proposed rules discourage venture capital from funding such a lawsuit? Without venture capital, those patent owners would find it much more difficult to obtain royalties for their inventions. Some attorneys argue that frivolous litigation is more likely to be brought by large practicing entities against small startup companies that are competing with one of their products. Hence, there is concern that some of the proposals do not address needs of the small patent owners. While it is important to fix the patent troll problem, it needs to be done in a way so that legitimate inventors and small companies are still able to assert their claims.

The software patent problem is now so huge that the urgency to find a fix is at unprecedented levels. Each proposed solution has its pros and cons and much further consideration will be required to formulate the best possible outcome. This topic will attract much attention in the months to come.

Lawrence E. Ashery is an intellectual property attorney at RatnerPrestia with more than 20 years of experience procuring patents, building portfolios, drafting legal opinions, counseling clients, and lecturing extensively throughout the United States and Asia. Contact him at leashery@ratnerprestia.com.

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