The Senate Commerce Committee is expected to vote on a bill soon aimed at addressing patent demand letters from entities frequently referred to as "patent trolls."
Clearly the momentum in Washington toward remedying concerns related to these trolls, also called patent assertion entities, or PAEs, and their impact on innovation and the economy hasn't lost any steam in the new year.
This is important because patent enforcement provides the necessary legal protection to the entrepreneurs whose creativity energizes the unique engine of U.S. innovation.
At least that's the way it should work.
The past two decades has seen the rise of a trend toward trolling by exploiting shortcomings in patent law. PAEs buy up patents for unrealized products and technology and use them to extract license fees from small businesses, retailers and manufacturers whom the PAEs threaten with demand letters in hopes of cashing in with a quick settlement.
Despite federal action in the House and now potentially the Senate, the patent trolling problem afflicts certain areas more than others.
In 2010 alone, the Central District of California saw 2,289 filings for patent infringement. In Nevada, however, there were only 198 such filings.
This is largely attributed to a provision in the law allowing a plaintiff in a patent suit to file anywhere in the country where the product or service utilizing the disputed patent is sold. It's no surprise that plaintiffs choose court districts where patent holders, who can often be considered trolls, tend to get favorable rulings.
Silicon Valley boasts a reputation as the hub of the American high-tech sector, one that earns us accolades for our innovative companies and people across the globe.
However, this region sits in the center of a state whose courts have become disproportionately popular with entities that threaten its future as a center for technology growth.
With unfathomable discrepancies in case totals like those between California and Nevada, there is no wonder the White House recently issued guidance to curb the surge in frivolous suits by plaintiffs.
The patent trolling problem is not just a U.S. problem, and in some instances seems even more egregious internationally.
For example, Sisvel, an Italy-based PAE, serves as a perfect example of what could happen when trolls' actions go unchecked. This troll has been in practice since 1982, when it was formed with the goal of acquiring and asserting patents related to television technologies.
Sisvel has had a busy 31 years swelling to become a mammoth of patent assertion, controlling the access to 12 different technology standards pools operating out of multiple offices in seven countries.
Sisvel made news when it requested that law enforcement raid the German CeBIT Trade Show, claiming that 51 of the show's booths were infringing upon their patents. Though profiteers like Sisvel claiming infringement was nothing new, raids by armed guards drew international attention to just show how far these bad actors were willing to go.
Interestingly, late last month Sisvel announced a new CEO named Karel van Lelyveld, who was one of the original founders of MPEG LA, a U.S.-based, patent-pooling entity that also has been accused of troll-like behaviors.
Patent trolls use their often-significant legal and financial resources to bully smaller entities without the financial resources to sustain a prolonged defense.
Often the least costly course of action is to settle out of court. This is the desired outcome for the troll, which gets paid and avoids a trial and the risk that its patent claims might be invalidated.
This is a trend that must stop.
California must shake its reputation as an advantageous battleground for trolls to launch their lawsuits and threats against innovators.
The federal government taking notice and actively working toward remedies like the Innovation Act in the House is a positive step. Hopefully, the Senate will continue to make this issue a priority with its actions in the coming months.
Silicon Valley is known for having the brightest minds with the best ideas. Let's hope lawmakers in Washington will continue to work to protect those ideas by putting the brakes on patent trolling and encourage innovation rather than discouraging it under the looming threat of frivolous patent suits and threats.
Steven Titch is an independent policy analyst based in Sugar Land, Texas. His work has been published by the Reason Foundation and the R Street Institute.