The long-anticipated Government Accountability Office report on rising patent litigation and the role of nonpracticing entities was published in August to relatively muted response from corporate America and legislative bodies. Rhetoric lobbed from both ends has long defined the public discussion on NPEs, or “patent trolls,” as they are more commonly known. The conversation seems poised to change based on the GAO’s data and conclusion, though, which revealed contradictions regarding the NPE effect.
The GAO report, “Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality,” was mandated by Section 34 of the America Invents Act, which made several fundamental changes to U.S. Patent and Trademark Office procedures. The report’s inclusion came in response to overwhelming frustration with NPEs, expressed up and down supply chains at every level of industry, from small business owners to America’s largest manufacturers and retailers. At the time of the GAO report’s publication, there were no less than six bills in committee in the House of Representatives and Senate, with a seventh bill under discussion, all meant to obstruct NPE practices. Just two months prior, in June, President Obama issued an executive order to combat NPEs, prescribing greater measures of scrutiny for the USPTO to follow when examining software patents. Also in June, the chairwoman of the Federal Trade Commission, Edith Ramirez, announced the commission’s intent to assert greater authority against NPEs by enforcing antitrust laws and commissioning studies of NPE business models. Even state legislatures had started to react. Though patent law is traditionally the domain of the federal government, in May, Vermont passed legislation making a bad-faith threat by an NPE a violation of state consumer protection laws.
