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President Obama declares war on patent trolls

By Michael Mayday , Jun 04, 2013 08:42 PM EDT
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President Barack Obama announced plans on Tuesday to enact a series of executive actions aimed at reigning legal action taken by certain types of patent-holding firms.

Those firms are commonly referred to as patent trolls, and they've been bothering Silicon Valley, financial institutions and other companies for some time.

Patent trolls manage is upset companies, both large and small, by buying and sitting on vague patents. When a successful company produces a product or service which closely resembles those patent, the firms act by either suing the alleged offender in the hopes of landing a settlement, or demand licensing fees from the companies.

But the White House, The Wall Street Journal reports, is moving to make life a little harder for those firms by enacting five executive order. One of the orders would instruct the Patent and Trademark Office to require the disclosure of both the inventor of a patent, and the patent's owner. Another, The Journal reports, could force litigant to be sanctioned for filing lawsuits considered abusive by the courts.

Another possible order could also restrict large tech companies, like Apple and Samsung, too. That order, if it comes to fruition, would reduce the role played by the International Trade Commission (ITC) in determining the import status of some goods based off of patent cases filed with the agency.

Using the ITC to block imports until an importer agrees to pay a royalty fee, or, as the case may be for some, using the ITC as a means to block competition, is a method growing in popularity.

Just today, in fact, Samsung Electronics won an ITC case against Apple for infringing on a Samsung patent. That suit resulted in a cease and desist order for AT&T models of the iPhone 4, iPhone 3GS, iPad 3G and iPad 3G. Provided Obama doesn't veto the ITC decision, Apple could see a drastically tightened supply of its wireless products.

Other companies, like Nintendo, have faced the ITC over patent allegations. In Nintendo's case, an Ohio firm sought to ban the import Nintendo's Wii system. The Ohio company failed largely because it couldn't prove it was trying to manufacture a product.

The White House issued an outline of its goals, including seven steps Congress could take to tackle the issue on its website.

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