Sen. Orrin Hatch (R-Utah) introduced a bill Wednesday that would curb frivolous patent infringement lawsuits by placing higher financial burdens on the companies bringing those suits.
Hatch’s bill – the Patent Litigation Integrity Act – would require courts to penalize companies that bring frivolous and meritless by having them pay the winning party’s legal fees.
{mosads}Additionally, the companies being sued could ask the court to require the company bringing the suit to post a bond for the cost of those fees.
“Many small businesses in Utah and throughout the country simply don’t have the resources to fight back against the predators in our patent system, and my bill gives them adequate resources to fight back,” Hatch said in a statement.
Hatch’s bill comes on the heels of House Judiciary Chairman Bob Goodlatte (R-Va.) introducing his patent reform bill last week. Goodlatte’s bill would require losing parties to pay the legal fees of winning parties in some cases, but it does not contain a bonding provision.
Requiring the losing party of a patent infringement case to pay “without the option to seek a bond is like writing a check on an empty account, and that’s why it’s important to include both in any legislation dealing with patent trolls,” Hatch said.
Julie Samuels, senior staff attorney at the Electronic Frontier Foundation, applauded Hatch for his bill’s bonding provision.
“We favor the type of bonding provision that Sen. Hatch included because it would require patent trolls, and especially their shell companies, to put their money where their mouth is,” she said.
Samuels hopes other lawmakers, including Goodlatte, include similar bonding provisions because they are “an important piece of the puzzle” that is patent reform.
In a letter to Hatch, the Coalition for Patent Fairness commended Hatch’s bill. The coalition includes Google, Verizon and Blackberry.
The bill “responds directly to well established and demonstrable abuses of the patent system while remaining flexible enough to ensure that innovators, both small and large, are able to properly defend their patent rights,” the group said in its letter.