The issue of "patent trolls" is an emerging one in the biosciences industry. Nonpracticing entities (NPE) are increasingly resorting to abusive practices to profit from innovations they themselves often had no hand in creating. They acquire patents for the purpose of collecting
royalties from innovators and manufacturers whose products or technologies allegedly infringe
patents owned by the NPE. The "patent trolls" themselves are often immune from patent
infringement claims because they do not produce, or intend to produce,
The bio-industry has largely been spared from patent trolling, but that is quickly changing for both the pharmaceutical/biotech and medical device sectors. Even major companies are now forming separate NPE and began filing patent infringement lawsuits against competitors. It's likely only to get worse unless appropriate legislation is passed to curb these abusive practices.
Congress took a major step to address the problem of patent troll litigation when the House of Representatives passed the Innovation Act of 2013. Many provisions within it are broad in scope and have unintended consequences. Key concerns remain: 1) it fails to address the issue of USPTO fee diversion, 2) the fee shifting threshold is not balanced, 3) the heightened pleadings proposal is not balanced, 4) there's a weakening of the post-grant estoppel, and 5) current customer stay provisions are ripe for abuse.
The Senate has now taken up the legislation and is taking more time to review the specific provisions and understand competing perspectives among stakeholders. Our national bio-industry partners are actively engaged with the Senate Judiciary Committee to modify the "patent troll" legislation and make it more targeted. MichBio is tracking this issue closely.
As of May 23rd, legislation in the Senate seems stalled and it looks unlikely that it will be marked up by the Judiciary Committee and moved to the full floor for a vote. In the mean time, the House has a renewed its interest on the issue, and its Energy & Commerce Subcommittee on Commerce, Manufacturing
and Trade held a hearing with the intent on drafting a bill everyone can agree on.