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Bill will curb business litigation abuses by patent scavengers

One enterprise largely spurned in recent years is a fiendish kind of company that has as its sole purpose the suing of other companies for patent infringement and licensing royalties. Active in California and most other high technology areas, this pariah entity buys up patents and patent licensing rights voraciously and somewhat indiscriminately, and then sues any business, large or small, that is thought to be potentially using any of the technology contained in its patent holdings. Thus, the bringing of business litigation against unsuspecting victims is the sole purpose of these entities, which have universally been dubbed as "trolls" in the business community at large.

The attacking company thrives on the expectation that most of its victims will settle prior to trial for at least the cost of its legal and other expenses necessary to fight the case through to the end of the trial. It expects that most companies will not risk an adverse judgment for far greater damages than the settlement cost. Many of its targets are in the high-tech industries where technology builds upon prior discoveries at a fast pace of change so that it is difficult at times to distinguish whether a particular usage has a prior patent association. That ambiguity makes such lawsuits stand on a vague but threatening enough platform to warrant a payoff.

Criticism and growing antagonism against these "bottom-feeders" is building across political and economic boundaries so that even in the U.S. Congress there exists an unlikely alliance across the aisles. A committee of the House on Nov. 20 approved to the floor for a vote on a bill that makes it harder for these aggressors to bring frivolous and indiscriminate lawsuits. For one thing, they'll have to provide details up front regarding the specific patents and uses in question, something they've not had to do in the past.

Furthermore, massive discovery requests will be more closely monitored by the courts for abuses. The court will have the discretion to award fees and expenses be paid by the losing party which is also generally not a common remedy found in business litigation cases. These cases are usually brought in the federal courts, and they are fairly pervasive in the high technology regions in California.

Source: MSN Money, House panel passes bill targeting 'patent trolls', Diane Bartz, Nov. 20, 2013

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