US President Barack Obama has issued a series of actions targeted at safeguarding technology, finance and retail firms against frivolous litigation known as ‘patent trolls’.
The White House has issued five executive actions and seven legislative recommendations, which aim to protect innovators from frivolous patent cases.
The announcement comes in the midst of the US lawmakers and courts seeking new ways to trim down the number of unwarranted patent lawsuits.
The White House said in a statement that new action is needed in the face of a flood of recent patent litigation, mainly in the smartphone sector, and because several major firms spend more on patent litigation and defensive acquisition compared to research and development.
"Innovators continue to face challenges from patent assertion entities (PAEs), companies that, in the president’s words ‘don’t actually produce anything themselves’, and instead develop a business model ‘to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them," the White House said.
One of the signed orders requires patent holders to have by default a real party-in-interest in a patent, which would increase transparency, and reveals the true owners of patents, to avoid the use of secretive shell companies holding patents.
In addition, Obama measures to ensure overall patent quality to cut down the number of unclear or broad patents which can be used to take legal action against inventors.
The announcement also formalises modifications being considered by the US Patent and Trademark Office, which include making patent owners and applicants recognise who benefits financially from the patent and enhancing application examinations.