In the case of patent trolls, the Federal Trade Commission and Department of Justice are in the process of assessing the impact of their activities on innovation and competition and their implications for antitrust enforcement and policy. In late 2013, Edith Ramirez, chairwoman of the FTC, planned to ask the full commission to approve an agency inquiry, a 6a(b) study of the so-called "patent troll" issue, that will include the issuance of subpoenas to these patent assertion entities.
The purpose behind this form of action by the government is to gather information from both small "legal shells" which gather patents and issue "demand letters" citing infringement, as well as the large firms who manage portfolio of patents that they license and to investigate if antitrust policy can mitigate the activities of these PAEs.
The government must understand that a one-size-fits-all antitrust enforcement policy approach is one that could possibly fail. While the vast majority of PAE litigation is concentrated in the information technology sector, the diverse range and intangible nature of IT services has led critics to urge Congress to undertake targeted reforms in the industry sector.
The Obama administration has listed several legislative recommendations to Congress that it believes will "bring about greater transparency to the patent system and level the playing field for innovators." These recommendations include requiring patentees and applicants disclose the "real-party-in-interest"; permit increased discretion in awarding fees to prevailing parties in patent cases; expanding the USPTO's transitional program for business method patents to include computer enabled patents; and providing off-the-shelf use by consumers and businesses to name a few of the possible reforms that the government could enact.
In 2013, we saw action take place in the form of two new laws: the re-introduction of the "Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013" ("SHIELD ACT") and the "Patent Quality Improvement Act of 2013" ("STOP Act"). The SHIELD Act applies to all patents (not simply software patents) and requires NPEs that are unsuccessful in suing for patent infringement pay the defendants legal costs if they lose their lawsuit while the STOP Act establishes a new process in which technology patents get reviewed by the PTO before being litigated for alleged infringement, essentially to eliminate "frivolous" claims brought by PAEs.
In essence, the three branches of the federal government are focused on a bipartisan patent law reform addressing PAE litigation abuse and reducing the possible harms that these entities bring about.
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