Tech Giants Turn to Courts for De Facto Patent Reform

With patent trolls emerging as an increasing threat to American innovation, tech firms including Google, Facebook, Dell and Zynga are now asking the federal courts to dismiss claims based on overly broad patents.

Eight tech firms recently signed on to a friend of the court brief asking the U.S. State Court of Appeals for the Federal circuit to deny the patent claims of Alice Corp., an electronic marketplace seeking a broad patent on closing financial transactions via a computer.  They join other online firms like  LinkedIn, eHarmony and Travelocity, which have filed similar briefs in the case, as well as the  Electronic Frontier Foundation.

Though the briefs specifically attack the patent claims of Alice Corp., the Google-Facebook filing addresses the broader problem of vague software patents:

Many computer-related patent claims just describe an abstract idea at a high level of generality and say to perform it on a computer or over the Internet. Such barebones claims grant exclusive rights over the abstract idea itself, with no limit on how the idea is implemented. Granting patent protection for such claims would impair, not promote, innovation by conferring exclusive rights on those who have not meaningfully innovated, and thereby penalizing those that do later innovate by blocking or taxing their applications of the abstract idea.

Technology patent trolls exploit such overly broad patent claims essentially to extort money from tech companies, which typically settle rather than face the costs fighting even dubious claims in court.  The pile-on against Alice Corp. is the first concerted effort by the tech sector to short-circuit the patent-troll business model.

A better solution would be a legislative fix that discourages spurious claims, such as the bipartisan patent reform bill proposed by Rep. Peter DeFazio (D-Oregon) and Rep. Jason Chaffetz (R-Utah).  Their bill, entitled the ‘‘Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012’’ would force plaintiffs to pay the legal fees of companies that fight patent claims deemed spurious by the courts.

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