Patents, Compulsory Licensing, and NPEs

The United States House of Representatives just introduced a proposed bill called the SHIELD Act which is meant to curb the amount of lawsuits brought by Non-Practicing Entities (NPEs sometimes referred to as "patent trolls"), companies that buy patent rights in order to file suit against infringers of those patents. Many think that patent trolls hinder innovation by tying up developers' time and money in lawsuits, but that position is not unanimous. Most of the debate seems to focus on whether software patents should even exist. The bill, if passed, would give the judge discretion to award the defendant with the costs of his legal fees if "the court finds the claimant did not have a reasonable likelihood of succeeding, and for other purposes."

My first reaction to this issue is a question. Why can't a compulsory licensing scheme like Israel's Chapter 7 of the Patent Law- 1967, solve the problem of NPEs? If an entity is not using its patents to develop new products and is just using them to sue infringers, the courts would be able to grant a license to the infringer in exchange for royalty payments to the patent owner. Presumably, this option is not favored in the US where property rights are very strong. They don't want the courts to have the power to mandate a license when it is not for government use. Instead they would apparently prefer to deter lawsuits by charging frivolous plaintiff's with defendants' costs.

For an article on compulsory licensing and NPEs, see here. And for an article on compulsory licensing under the TRIPS Agreement and in the US and Canada, see here.

All Your Work is Belong to Us (for Compensation?)

An article in Haaretz today reports on a recent Supreme Court decision suggesting that the inventor listed on a patent application may be entitled to compensation for a service invention even where he signed an agreement assigning the invention to his employer and waiving his rights to compensation. A service invention, described in Section 132 of the Patent Law, is an invention created during the employees' term of service for the employer and as part of his work which, unless agreed otherwise, belongs to the employer. It is similar to a work for hire in the US copyright context.

I think the article makes two errors (but correct me if I'm wrong).

Israel Enacts Patent Amendments

One of the major aspects of the new patent amendment is the change to publication of patent applications after 18 months instead of the 30 months that was previously the case.

For more on the new amendments, see the America-Israel Patent Law Blog.