The patent system of United States is very liberal in nature. It is occasionally claimed that anything under the sun is patentable in U.S. This has created a problem for U.S. patent systems where patent trolls are exploiting it for their benefits.

Patent trolls can affect the competition and the whole purpose of granting the patent is defeated. Patent trolls usually have no intention to manufacture or market the patented invention and their sole purpose is to make some quick money through cease and desist orders and Patents infringement litigations. Now even in India this practice has begun to surface.

However, compared to U.S. this menace has not affected India much. But U.S. need to take immediate action in this regard and realising this condition the Obama Administration will announce a set of executive actions on Tuesday that would regulate the acts of patent trolls in U.S.

As per media reports, President Obama will instruct the U.S. Patent and Trademark Office (USPTO) to initiate a rule-making process that would require patent holders to disclose the owner of a patent. Obama would announce five executive actions and seven proposed legislative changes, including asking Congress for legislation that would sanction litigants who file lawsuits deemed abusive by the courts.

The sole objective of patent trolls is to extract licensing fees from other companies rather than make products based on the patents they hold. They achieve this through threats of patent violation and corresponding litigations in this regard. Such lawsuits have increased tremendously in the past in U.S.

In 2011, Obama signed the Leahy-Smith America Invents Act, which changed the U.S. patent system into a “first-to-file” patent system as opposed to a “first-to-invent system”. The USPTO previously awarded patents based on when inventors had the idea, instead of when they filed a patent application.

However, this has put the entrepreneurs and individuals at risk at the hands of software patent holders who try to exploit them. High profile IP litigations involving Microsoft, Apple, etc have also been in limelight. Mozilla had also issued a cease and desist notice to Gamma International for maliciously using its brand and reputation. Kim Dotcom has also accused Google, Facebook, Twitter, etc of violating his two step authentication patent.

It seems the Obama administration is trying to bring some order in the otherwise chaotic situation. Some guidance from India can be taken in this regard where public interest still prevails against commercial interests.