In view of 35 USC 285 allowing for attorney fees in exceptional cases, Congressman DeFazio's bill: "Saving High-Tech Innovators From Egregious Legal Disputes Act of 2012" strikes me as superfluous with a highfalutin title to boot. Congressman DeFazio refers to this bill as the SHIELD Act, and proposes a patent owner of a software or hardware patent pay all litigation costs including attorney fees if a court later thinks a patent owner did not have a reasonable likelihood of succeeding. Congressman Chaffet is co-sponsoring the bill.
What about defenses that did not have a reasonable likelihood of succeeding? Should patent owners have a claim to defendant paying its attorney fees? Apparently not under the SHIELD Act.
The SHIELD bill also defines software broadly as "a process that could be implemented in a computer" regardless of whether or not computer is mentioned in the patent so this bill may have more reach than one might expect.
Congressman DeFazio talks lots about how patent trolls are harming small high tech companies in his press release here, but the language of the bill has no such limitations. "Patent trolls don’t create new technology and they don’t create American jobs,” said DeFazio. “They pad their pockets by buying patents on products they didn’t create and then suing the innovators who did the hard work and created the product. These egregious lawsuits hurt American innovation and small technology start ups, and they cost jobs. My legislation would force patent trolls to take financial responsibility for their frivolous lawsuits."
The bill not only fails to limit its application to trolls, it may prevent small businesses from pursuing rightful claims of patent infringement against a large company with greater resources to litigate even the meritious claim to death, e.g., in discovery and to apply to court for the small company to pay its costs of defense.
Congressman DeFazio's proposal fails to suggest how it squares with the American Rule: each party is responsible for paying its own attorney's fees unless a statute allows assessment of attorney fees against the other person. But such are the times. Special interests run to Congress and Congress proposes laws to placate them even when interests run contrary to many decades of court cases and 35 USC 285.
I am not expecting this bill to pass, but expect if it does it will serve well as a "big company club."
Copyright © 2012 Robert Moll. All rights reserved.