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U.S. Congress to consider law against 'patent trolls'

WASHINGTON (Reuters) - A U.S. congressman, who has led the charge against frivolous patent infringement lawsuits, introduced a bill on Wednesday to curb the behavior of so-called "patent trolls" but faced criticism that some of the proposals go too far.

The bill from Representative Bob Goodlatte, chairman of the House Judiciary Committee, requires companies to provide specific details on what patent is infringed and how it is used when they file a lawsuit.

It also requires judges hearing patent cases to award fees to the winner in an infringement lawsuit, unless the judge decides that the loser's position was "substantially justified" or some other circumstances exist

Goodlatte, a Virginia Republican, is working on the measure with his counterpart on the Senate Judiciary Committee, Vermont Democrat Patrick Leahy. Leahy indicated his legislation would be ready soon.

The White House urged Congress to take steps to curb abusive patent lawsuits in June. Other proposals are circulating on Capitol Hill, as well as a proposed study of "patent assertion entities" (PAEs) by the Federal Trade Commission.

PAEs or 'patent trolls' are companies that typically do not invent or manufacture products. Their business model is to buy the intellectual property of others and seek money from firms that may infringe those patents.

Goodlatte's bill was welcomed by retailers, some of whom have been targeted by PAEs with demands for licensing payments on technology like Wi-Fi.

"Traditional brick-and-mortar merchants and e-commerce companies alike have had to deal with a growing number of patent troll lawsuits over the last few years," said David French, a lobbyist for the National Retail Federation.

The legislation would allow high tech companies to jump into lawsuits filed against their customers. This means that a company that makes Wi-Fi equipment could defend a bakery accused of infringing Wi-Fi patents by simply installing a router.

Among the more controversial parts of the legislation is a section allowing an expanded review of business method patents, which are most often used to use to sue for infringement.

The bill would allow financially oriented, business method patents to be given a second look by the U.S. Patent and Trademark Office to determine if they are valid or not. Litigation can be stayed during that process.

Internet companies largely supported the bill, and the effort is backed by Cisco Systems Inc, Apple Inc, Google Inc and other technology powerhouses.

Still, some worried that the patent review process might go too far. "We are for a lot of changes that curb abusive litigation but we are not for undermining the patent system," said Tim Molino, director of government relations at BSA The Software Alliance.

(Reporting by Diane Bartz; Editing by Leslie Gevirtz)

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