Obama Administration Plans to Thin the Patent Troll Herd

trollsTime Magazine online recently reported that in 2011, Apple and Google spent more money on patent litigation and defensive patent acquisitions than on research and development. As writer Sam Gustin noted, that’s “not a good sign for the U.S. economy; in fact, it’s a stark indication that our intellectual-property system is broken.”

He’s got a point. Managing a business — even a behemoth like Apple or Google — requires a delicate balance of constantly changing competing interests. To succeed, a business must devote sufficient assets to the right purpose at the right time more often than not. The fact that two of our technological powerhouses spent more on patent litigation than research and development does not bode well. How will U.S. companies blaze an innovative trail if they are tied up with each other in patent litigation?

Popular opinion places the blame of the overgrown patent litigation problem on investors, rather unaffectionately referred to as patent trolls. So-called patent trolls buy broad technological patents. Then they sit and wait — without actively using those patents — until the right time to sue a potential patent infringer. Some would call that smart investing, but the ultimate outcomes are clogged courts, bloated patent litigation and a disproportionate amount of corporate assets going to pay for it. (Rather than being spent on research and development or put in shareholders’ pockets.)

The current administration agrees patent trolls are a problem and has promised to do something about it in the five executive actions and seven legislative recommendations issued earlier this month. The resolutions are designed to protect innovators from frivolous litigation and ensure high-quality patents.

We all know that no single law or policy can fix the patent system and it certainly won’t happen overnight. Nonetheless, there is plenty of room for corrections which will foster innovation and limit patent-squatting. We’ll be watching to see whether the administration and Congress can work together toward finding and implementing solutions.

The broken patent system potentially affects every business, not just those directly involved in technological development. The experienced Bryan-College Station, Texas business law attorneys stay abreast of developing business trends and can advise you every step of the way in running your business. Call the Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.

About Chris Peterson

Chris Peterson is an attorney and the owner and founder of Peterson Law Group, a Texas law firm with offices in Bryan/College Station and Kingwood. He mainly practices in the areas of Estate Planning and Business Planning. Chris is also a Certified Estate Planner. Besides his law practice, Chris is a serial entrepreneur and community volunteer. He is known for his cutting edge law practice that utilizes technology to deliver efficient, excellent work.