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US senators introduce bill to limit frivolous patent lawsuits

US Senators Patrick Leahy (D-VT) and Mike Lee (R-UT) [official websites] on Monday introduced a bill [press release] aimed at limiting frivolous patent lawsuits. The proposed legislation, known as the Patent Transparency and Improvements Act of 2013 [S 1720, PDF], is designed to increase transparency in the US patent process and improve resources for small businesses that are targeted in patent infringement lawsuits. The bill targets Patent Assertion Entities (PAEs) [white paper, PDF] commonly known as "patent trolls." In general, these organizations do not invent products, but they employ aggressive litigation tactics to obtain licensing fees from companies that are less likely to fight patent infringement lawsuits, such as small and medium sized businesses.

Not only has the bill garnered bi-partisan support in the US Senate, but the US House of Representatives recently addressed the financial strain imposed by PAEs on the American economy. Leahy and Lee wrote a commentary piece [Politico op-ed] on the issue, published in September. Last week, the Subcommittee on Oversight and Investigations in the US House of Representatives held a hearing that addressed the problems surrounding patent assertion entities. In the hearing, Lee Cheng, Senior Vice President of Corporate Development for electronics supplier Newegg.com, provided written testimony regarding the costs of patent trolls on the US economy: "Patent trolling is unfortunately a growing and uniquely American problem that was estimated to have cost the American economy over $80B in 2011 in legal fees, settlements, lost productivity and stifled entrepreneurism, due to loopholes in the patent laws."

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