U.S. panel takes action aimed at needless patent lawsuits

WASHINGTON Mon Jun 24, 2013 6:46pm EDT

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WASHINGTON (Reuters) - A U.S. trade panel that deals with patent infringement cases took a step on Monday that could rein in companies, often known as patent trolls, accused of embarking on frivolous litigation.

The International Trade Commission said it will soon require some complaining companies to prove upfront that they have a significant presence in the United States.

The commission said it created a pilot program in which its six administrative judges will in some cases determine within 100 days if companies that sue for infringement have adequate U.S. production, research or licensing to use the court.

Previously, the ITC would establish that a company met the "domestic industry" standard at the same time it determined if a patent or patents had been infringed - at the end of the case.

The pilot program was praised by the ITC Working Group, which includes representatives from Avaya Inc, Broadcom Corp, Cisco Systems Inc, Google Inc, Hewlett Packard Co, Intel Corp and Oracle Corp.

The group has been working to rein in "patent assertion entities," or trolls, which create nothing, but often buy and license portfolios of patents from others and then file infringement lawsuits.

"Addressing this will require more than administrative fixes, but the pilot program is a step forward that could help limit costly and unnecessary patent cases," ITC Working Group Executive Director Matt Tanielian said in a statement.

The ITC became a favorite venue for companies to pursue patent litigation after a 2006 Supreme Court decision called eBay v. MercExchange, which made it harder for district courts to ban sales of products for patent infringement.

The White House suggested recently that Congress change the ITC's statute so the same standard is used for rulings by the commission as in district courts.

(Reporting by Diane Bartz. Editing by Andre Grenon)

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