June 10, 2013 by Silvana Bolocan
The White House has taken steps at the beginning of the year to combat frivolous patent claims that allegedly harm firms creating new products. According to one Boston University study, as much as $29 billion were spent in 2011 in legal fees by firms targeted by patent trolls which buy cheap patents and then threaten legal action against companies that are using similar technologies in order to secure a financial settlement.
President Obama has urged Congress to pass legislation combating such abusive patent claims. By this action he raised the profile of the issue, thus forcing attention to the issue. According to the White House, patent trolls now account for 62% of all patent lawsuits.
This situation should be viewed in connection to the future free trade agreement with the EU. One of the first issues that come to mind is the fragmentation of patent protection in the EU. The negotiations for setting up a European Unified Patent Court was long and difficult, leading to a politically brokered compromise by the European Council in the summer of 2012. The agreement needs to be ratified by a majority of the Member States before it comes into force. With all political efforts this will not happen before the spring of 2014.
The EU is not foreign to the issue of patent trolling. However,compared to the US, the phenomenon is reduced, albeit on the rise. A unified patent system in the EU will help deal with the potentially rising number of cases. The economically depressed EU needs to set its institutional framework in order to be able to tell apart the valuable use of patent monetization from patent trolling. This may be an issue to look into over the coming negotiations from a constructive approach of best practices sharing.