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The STOP Act Aims To Thwart Patent Trolls

The patent reform effort on Capitol Hill continues to make progress. Yesterday, Representatives Darrell Issa, R-Calif., and Judy Chu, D-Calif., introduced H.R. 2766, Stopping the Offensive Use of Patents Act (the STOP Act). The STOP Act is very similar to the Patent Quality Improvement Act, introduced by Senator Charles Schumer of New York just a few weeks ago, which we blogged about previously.

Both the Schumer bill and the Issa-Chu bill would expand and continue what is now known as the transitional program for covered business method patents. The purpose of the program is to create an effective and fair post grant review for business method patents. These reviews take place in the Patent Office, and not in the court house. The current law limits the program to business method patents used in the “practice, administration, or management” of a financial product or service. The proposed legislation would expand the law so that it will apply to all types of business method patents, to include more businesses, and would also make the program permanent.

This is a very important approach to patent reform. Senator Schumer was responsible for the transitional program to begin with. The idea of expanding it will give businesses another tool to combat patent trolls who bring lawsuits based on low quality patents. We commend Reps. Issa and Chu for introducing this bill in the House.

One other interesting part of the Issa-Chu bill is a mandate to the Director of the Patent Office to work with and support intellectual property law associations throughout the United States, within established pro bono programs, to assist financially under-resourced resellers, users, implementers, distributors, or customers of an allegedly infringing product or process. This could help startups and small businesses battle patent trolls who attack companies when they are the most vulnerable.

About the Author

This is a post written and contributed by Alan Schoenbaum.

Alan Schoenbaum is Special Counsel for Rackspace.

Prior to joining Rackspace in 2005, he was a partner at Akin Gump Strauss Hauer & Feld LLP in San Antonio, Texas. Alan has more than 25 years of experience in corporate and securities law and mergers and acquisitions. Throughout his legal career he has represented public and private growth companies, venture capital funds and their portfolio companies. Alan received his B.A. in English and his law degree from the University of Texas at Austin.


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