Incentives to encourage companies to adopt the US Cybersecurity Framework were introduced in a White House blog post on Tuesday

White House Recommends Legislative Action to Curb Patent Troll Abuse

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The White House announced on Tuesday a plan to protect innovators in the high tech space from patent trolls, an issue that has affected web hosting providers for years.

The plan includes five executive actions and seven legislative recommendations, according to the White House. The legislative recommendations include provisions that would require patentees and applicants to disclose the “Real Party-in-Interest,” permit more discretion in awarding fees to prevailing parties in patent cases, and use demand letter transparency to help curb abusive suits. According to recent research out of Boston University, patent trolls cost the US economy about $29 billion in 2011.

The idea that the patent system fails to keep up with modern technology is nothing new, but it has taken legislators a seemingly long time to do anything about it. This seems to be a step in the right direction, and industry organizations the Electronic Frontier Foundation and i2Coalition are in support of the movement towards patent reform.

“The White House’s executive order and legislative recommendations, coupled with movement we have seen on this issue in both the Senate and House, would deal the patent trolls a big blow,” Christian Dawson, co-founder and board chair, i2Coalition, said in a statement. “These reforms to the patent system would arm innovators with the legal tools to conduct their business without the threat of litigation and bogus lawsuits that steal away time and money they could be spending elsewhere. High-tech innovators create well-paying jobs and are the lifeblood of our nation’s economy. i2Coalition thanks Senators Cornyn and Schumer and Chairmen Leahy and Goodlatte for their efforts to stop patent trolls, and looks forward to working with Congress and the White House to ensure that the fruits of innovation are not spoiled by these egregious actions.”

The executive action to “tighten functional claiming” will offer new targeted training to patent examiners on scrutiny of functional claims. Over the next six months, there will be strategies in place to improve claim clarity, such as the use of glossaries in patent specifications to assist examiners in the software field.

Other executive actions include expanding dedicated outreach and study, and empowering end users with education and outreach materials, “including an accessible, plain-English website offering answers to common questions by those facing demands from a possible troll.”

A report by The Register questions whether these legislative proposals will ever translate to action, and if they do, if it could is enough to undo the damage caused by patent trolls.

“The White House proposals will do something to deal with the abuse of the patent system by trolls, but nowhere near enough, and in some cases may make the problems worse,” the report says. “Possibly the biggest hole is not asking for some kind of requirement for patent litigants to actually produce something related to the patents they are contesting. Two lawyers operating out of a New Mexico strip mall can claims huge damages simply because they own a patent – instead there needs to be a requirement that you are actually involved in the business you are launching legal action into.”

In the web hosting community, Rackspace has been the most vocal about pushing patent reform. In April, Rackspace announced that it would sue patent trolls IP Nav and Parallel Iron in court. Rackspace has been on the receiving end of many patent infringement cases in recent years, seeing a 500 percent jump in legal spend fighting patent trolls since 2010.

What do you think should be done to curb abusive patent troll and patent infringement lawsuits? Have you ever been victim of a patent troll? Let us know in a comment.

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