WASHINGTON Feb 14 President Barack Obama, in an
unusual foray into patent law, on Thursday said U.S. patent
reform needs to go farther to address the trend of companies
that do not manufacture any products aggressively suing other
companies for patent infringement.
High-tech companies in particular have complained to
regulators about big patent licensing companies that manufacture
nothing but sue long lists of firms, often using weak patents to
do so. Many high-tech firms settle to avoid litigation risk but
some, like Google, fight back.
The polite term for these firms is "non-practicing entities"
but in private they are more rudely called "patent trolls."
After a years-long fight, Congress passed a patent reform in
2011 which did little to address the issue.
"Our efforts at patent reform only went halfway to the point
where they need to go," said Obama during an online question and
answer session, calling for "smarter patent laws."
Long focused on large corporations because of their deep
pockets, these entities have recently turned their attention to
start-ups which are not as established but have raised large
amounts of money and often have substantial revenue.
"I'm an ardent believer that what's powerful about the
Internet is its openness and the capacity for people to get out
there and just introduce a new idea with low barriers to entry,"
Obama said. "We also want to make sure that people's
intellectual property is protected."
The increase in patent lawsuits by these companies is so
pronounced that they now constitute the majority of U.S. patent
lawsuits, according to a study by Colleen Chien, a law professor
at Santa Clara University and a patent expert.
She found that about 61 percent of all patent lawsuits filed
through Dec. 1, were brought by patent-assertion entities, or
individuals and companies that work aggressively and
opportunistically to assert patents as a business model. That
compares with 45 percent in 2011 and 23 percent five years
These firms are asserting patents that were either
originally awarded to them or that they acquired.