Still more protection needed from patent trolls in the EU

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26 February 2014 | 0

Leading tech vendors again urged European officials to protect them from patent trolls while creating a new pan-European patent system.

Almost 20 companies including Apple, BlackBerry, Cisco, Dell, Google, HP, Huawei, Microsoft and Samsung have written a letter urging the EU to make further amendments to the draft rules for the formation of a new unified patent court system in the EU

The vendors are worried that the unified system can lead to a one-stop-shop for quick region-wide sales bans. Another concern is a plan to allow disputes to be split up into infringement and validity cases that are decided in different courts. This could expose product vendors to penalties even before the patent in question is declared sound, according to the vendors.

Patent Assertion Entities (PAEs), popularly known as patent trolls, could particularly benefit from the proposed rules, according to the vendors. PAEs do not directly produce goods or services using the patented innovations and instead assert their intellectual property rights against companies that do.

As currently written, the draft could lead “to an influx of patent trolls who are eager to exploit the new system that allows them to ‘hold up’ manufacturers without having to first prove their patent is valid”, said Horacio Gutierrez, Microsoft’s Deputy General Counsel and Corporate Vice President, Legal and Corporate Affairs, in a blog post.

The cross-industry coalition voiced similar concerns in September and proposed changes that would provide the unified court with more specific guidance on when to permit splitting up lawsuits and when to grant sales bans.

The companies urged the EU to fully adopt their recommendations on March 18, when European policy makers are scheduled to finalise the draft rules of procedure for the new court.

“Europe has a unique opportunity to avoid the abuses of PAEs that reportedly cost US businesses $29 billion (€21 billion) for cases filed in 2011 alone and caused economic damage of approximately half a trillion dollars from 1990 to 2010,” they said.

A similar call to reform the patent system and curb the opportunities for patent trolls came from 42 state and territorial attorneys general in the US in a letter calling on the Senate to pass meaningful patent reform.

The trolls harm the US economy by making dubious patent infringement claims and use the threat of expensive litigation to extort money from small businesses and nonprofits, the officials wrote, adding that they had received many complaints from businesses and nonprofits who are desperate for relief from the misuse of the patent system.

 

Loek Essers, IDG News Service

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