On August 23, we reported on the recently proposed SHIELD Act which targets patent assertion entities (PAEs) by permitting courts to award attorney fees in some cases involving “computer patents.”

A recent report by the Congressional Research Service cautions that the SHIELD Act may run afoul of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS, which is administered by the World Trade Organization, requires that patent rights be granted without discrimination as to the field of technology, although some differentiation may be possible for “legitimate reasons.”

The CRS report rounds up several other possible legislative options for reform, which include:

• improving notice by more robustly using the definiteness requirements of § 112;
• reducing leverage, hold-up, and settlement pressures available to PAEs by shifting burdens and costs away from defendants;
• instituting a scheme of escalating costs or diminishing rights over time to reduce the number of outdated late-in-life patents that are asserted;
• making consequences for patent dormancy, including: shifted costs and burdens to the PAE; removing the presumption of validity; subjecting plaintiff to heightened pleading and production requirements; freezing rights until use resumes; or even a complete loss of patent rights akin to trademark abandonment;
• creating a more efficient patent market by requiring publication of patent assignment and license terms.

For more: “Patent Troll Bill May Conflict With Trade Deal, Report Warns” Ryan Davis, IP360.com

This article was prepared by Andy Liddell (aliddell@fulbright.com / 512 536 3043) of Fulbright’s Intellectual Property and Technology Practice.