President pushes patent reform: showdown over trolls set for spring

Obama

President Obama offered new hope for America’s troubled patent system on Tuesday night, calling on Congress to “pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.”

The plea, set out in a list of priorities recited by Obama in the annual State of the Union address, comes as the House and Senate are hashing out details of the Innovation Act, a law that could fix some of the worst aspects of patent trolling.

The trolling problem, which involves shell companies using old patents to extort everyone from major companies to small app developers, has become especially acute in recent years. Congress tried to fix the situation in 2011 with the “America Invents Act” of 2011 but the law proved to be ineffective.

Obama’s support for the new law in Congress comes as the FTC is investigating prominent patent trolls for anti-trust violations, and as the Supreme Court prepares to hear an important case that could limit or end software patents; in other words, the erosion of the patent system has become so severe that all three branches of government are working to fix it.

All of this doesn’t mean, of course, that reform will happen. Old-guard tech companies IBM and Microsoft have already stripped an important provision from the Innovation Act that would have provided a cheap, effective way to challenge bad patents. And the leader of the patent trolls, Intellectual Ventures, is pouring money into Washington to stop reform.

The final version of the Innovation Act is expected to arrive March or April, while the Supreme Court will hear the software case on March 31. In the meantime, recent news stories mean the frustration over the patent system is likely to mount: this week, a patent troll obtained a judgment worth potentially hundreds of millions against Google over old Lycos patents, while the cable industry sued to stop what it calls a troll’s “illegal conspiracy.”

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