Representatives Peter DeFazio (D-Ore.) and Jason Chaffetz (R-Utah) recently reintroduced H.R. 845, the Saving High-tech Innovators from Egregious Legal Disputes, or SHIELD Act. The bill seeks to “protect American tech companies from frivolous patent lawsuits that cost jobs and resources” by implementing a “loser pays” system for patent infringement cases brought by some types of non-practicing entities (sometimes referred to as “patent trolls). The SHIELD Act would not apply to plaintiffs in lawsuits where the plaintiff invented the patent or produced evidence of having made a substantial investment in bringing the patent to market.

Both members of Congress first submitted the bill last August, but it failed to get enough support to pass. This time around, the co-sponsors believe its chances of passing are much better. It now covers all industries, not just the high tech industries covered in the previous bill. Support for the new bill has come from groups like the Consumer Electronics Association, the Electronic Frontier Foundation, Engine Advocacy, the National Retail Federation, the Coalition for Patent Fairness, and the Consumer and Communications Industry Association.

Also, President Obama has made recent statements suggesting he is in favor of making further changes to the patent system in this area as well. During a recent Google Hangout appearance online, President Obama specifically mentioned the problem patent trolls present to businesses, old and new. He stated that the America Invents Act passed last year and fully in effect this month “hasn’t captured all the problems.” He addressed the issue of non-practicing entities that “don’t actually produce anything themselves” but that are “just trying to essentially leverage and hijack somebody else’s idea” to “see if they can extort some money out of them.” President Obama mentioned that “our efforts at patent reform only went about halfway to where we need to go” and an additional consensus needed to be reached on “smarter patent laws.”

As H.R. 845 has resurfaced in a new form, new questions regarding its final wording, the scope of its coverage, and its effectiveness in dealing with patent trolls have reappeared as well. We will continue to provide you with updates regarding this important legislation as it proceeds through Congress.