The reforms offer a myriad of ways to curb frivolous litigation. | M.Scott Mahaskey/POLITICO W.H. to target 'patent trolls'

The White House is set to announce Tuesday sweeping reforms aimed at so-called patent trolls who stand accused of hurting American businesses.

The reforms offer a myriad of ways to curtail frivolous litigation, according to the administration’s press release obtained by POLITICO. The White House did not comment for this story.


The plan, which includes five executive actions and seven legislative recommendations, will likely be welcomed by the tech industry, which has complained that patent litigation has increased dramatically and threatens innovation.

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In recent weeks, lawmakers in both chambers have introduced five bills that aim to address some of the legal issues arising between a patent holder and a licensee.

President Barack Obama spoke about the problem of patent litigation at a recent Google+ hangout, saying that patent trolls “don’t actually produce anything themselves” and instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

The White House is offering its proposals to stop “this drain on the American economy,” according to the press release.

Many of the reforms come straight from the tech industry’s wish list.

The seven legislative recommendations include some of the same elements in bills introduced this Congress. They include requiring patent holders and applicants to disclose who really owns and controls the patent, changing how fees are awarded to the prevailing parties in patent litigation and protecting consumers with better protections against being sued for patent infringement.

One of the biggest changes suggested is to alter the International Trade Commission’s standard for issuing injunctions in patent cases. The concern, expressed by some in the tech industry, is that the ITC has become a fast-track system for patent trolls, enabling their ability to threaten and extort businesses. At the ITC, the risk of products being banned from the U.S. market is great. While Congress has held hearings on the issue, there has not been recent legislation.

Under executive orders, the White House is making the “real party of interest” the new default, requiring patent applicants and owners to regularly update ownership information when they are involved in proceedings before the Patent and Trademark Office. The White House says the PTO will begin rulemaking on the issue.

In addition, the PTO will issue education materials to help consumers and retailers who are increasingly targeted by patent firms with letters threatening litigation.

Tony Romm and Alex Byers contributed to this report.

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