Senate Panel Plans To Make Losers Pay For Frivolous Patent Lawsuits

[March 28, 2014]  By Diane Bartz

WASHINGTON (Reuters) — U.S. senators seeking to curb frivolous patent litigation plan to add a "loser pays" amendment into a bill that many believe has a good chance of becoming law, a leading lawmaker said on Thursday.

The change would require parties that lose lawsuits to cover winners' legal bills, and is expected to deter prolonged, frivolous and vexatious litigation. Such measures have been pushed by big technology companies such as Google Inc and Apple Inc.

Patrick Leahy, chairman of the Senate Judiciary Committee, said in a committee meeting on Thursday that he and other senators planned to amend a bill introduced in November to "send a strong signal that patent trolls who pursue lawsuits with no reasonable basis should pay reasonable attorneys fees."

Companies that buy up large numbers of patents to extract licensing fees or damages for infringement are often called patent trolls or patent assertion entities by critics.

The bill also would require patent holders to disclose ownership and allow manufacturers to step into lawsuits to protect customers accused of using an infringing device.

Some retailers, coffee shops and other low-tech companies that offer free Wi-Fi to customers say they have been threatened with lawsuits unless they paid licensing fees for using routers that allegedly infringe certain patents.

"I think we can do this (pass a bill). I do think we need time to do it," Senator Dianne Feinstein, a California Democrat, said on Thursday. "I think we are united on the troll. The troll must go."

She noted that companies of all sizes in California have been hurt by patent fights. But she and some senators also cautioned in a discussion that any legislation should ensure that companies whose legitimate innovations have been stolen can still sue for infringement.

The Senate measure is similar to a measure overwhelmingly passed by the U.S. House of Representatives on December 5.

The White House supports the legislation.

(Reporting by Diane Bartz; editing by Ros Krasny and Richard Chang)

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