Senator Charles Schumer has introduced legislation that will make it easier for patent infringement cases to be reviewed by the US Patent and Trademark Office (USPTO) before heading to court.
The bill aims to slow the onslaught of infringement cases from patent assertion entities, or patent trolls. Senator Schumer says the bill will impede excessive patent litigation and help shepherd innovation in the tech sector.
Senator Schumer believes that the bill will be most helpful to small and mid-sized business that are in danger of being caught in court with a patent troll. The senator reports that 82 percent of companies targeted by patent trolls make less than $100m a year in annual revenue.
"This legislation will provide small technology start-ups with the opportunity to efficiently address these claims outside of the legal system, saving billions of dollars in litigation fees," said Senator Schumer in a statement.
Patent assertion entities, are companies that buy broad patents with the aim of suing other firms for royalties. Such companies have made numerous headlines over the years. Cloud service provider Rackspace made news last month for its legal fight with famed patent hoarder Parallel Icon.
Schumer's recent legislation looks to curb the excessive fees involved in fighting patent cases in court. Currently, if an operating company gets accused of illegally infringing on a patent, it can either take the case to court or pay licensing fees to the accusing company.
According to Senator Schumer, both current methods cost huge amounts for the company alleged to be infringing.
The Senator reports that the average patent settlement for a small or medium-sized business runs upwards of $1.33m. While an in-court case could cost a company approximately $1.75m per trial.
With the proposed legislation, patent infringement cases would be eligible for a USPTO review before going to court. The review would help to resolve pending cases and stymie patent assertion entities from issuing improper infringement claims.
It extends a provision that Senator Schumer introduced last year as part of the America Invents Act (AIA).