Making sense of the White House "patent troll" announcement

The best succinct take I've read on the White House "patent troll" initiatives last week is this client alert from the Wilson Sonsini law firm.

Going off topic for a second: one of the ironies of all the attention being paid now in tech media to "big data" is that it isn't accompanied by a concern about information assymetry. Now connecting that thought to the "patent troll" debate: one theme of the White House's initiatives is to promote, through executive action and by proposing legislation, more transparency about patent ownership and patent actions.

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The WSG&R client alert expresses the executive action to promote transparency this way:

"Today, PAEs [patent assertion entities] often operate through shell companies that prevent defendants from knowing who the real parties-in-interest are and the extent of the patent portfolios they control. These shell companies are also sometimes used to avoid personal jurisdiction and to defeat declaratory judgment jurisdiction. Though it frequently is possible to determine who is behind a PAE through research, these new [Patent and Trademark Office] rules should result in greater transparency and hinder abusive PAE tactics, including repeat actions by the same patent owners."

On the legislative proposal side of promoting transparency, the WSG&R alert says this:

"This proposed legislation would incentivize public filing of demand letters in a way that makes them accessible and searchable by the public. There is currently no easily accessible, searchable repository of demand letters, and PAE activities are often secret. The White House's recommendation should provide more transparency and greater information about PAE activities, allowing for coordinated defense and attacks on the validity of suspect patents earlier in the process."

No question that the White House put a target on "trolls" in its announcements this week and in this report. But it's also interesting that the White House concedes the following at the very top of its report: "Some firms that own patents but do not make products with them play an important role in U.S. innovation ecosystem, for example by connecting manufacturers with inventors, thereby allowing inventors to focus on what they do best."

Photo: Alex Abboud / Flickr.


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