The US House is currently considering legislation that would make patent litigation more costly. But only for the losing party, and only in lawsuits involving "computer" patents. While the legislative goal of discouraging excessive litigation is a worthy one, there are some issues with this particular bill.
The legislation is called the "Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012", or the SHIELD Act. The SHIELD Act was introduced on August 1, 2012, and is currently referred to the Subcommittee on Intellectual Property, Competition and the Internet. Under existing law, 35 U.S.C. 285, a court has discretion to award attorney's fees to the winner of a lawsuit, but only in "exceptional cases." A case is exceptional if, for example, the losing party engaged in unfair conduct, bad faith, or delay tactics. Generally, the winner's attorney's fees are not shifted to the loser, section 285 is not applied to ordinary patent lawsuits.
The SHIELD Act would change that by adding section 285A, which covers lawsuits over patents on "computer hardware and software." Section 285A would apply to cases where the patent owner claims infringement and the court determines that he or she "did not have a reasonable likelihood of succeeding." In such cases, the court then has discretion to award not just attorney's fees but also other litigation costs to the winning party.
The intent of SHIELD Act is to discourage frivolous lawsuits where the plaintiff is suing simply to extract a settlement from the accused infringer. By making it easier to collect attorney's fees from the patent owner, the SHIELD Act would provide any party accused of patent infringement with additional motivation to proceed to trial and additional leverage in negotiating a settlement. There is no similar provision for an unsuccessful defendant, if a party accused of infringing a patent takes the case to trial without a reasonable likelihood of succeeding, the losing defendant would still only be subject to fee-shifting in exceptional cases under section 285.
The Act is and is aimed particularly at non-practicing entities or "patent trolls." However, there is nothing in the law that is specific to NPEs or excludes business actively implementing their patents.
The creation of different rules for different technologies is problematic from a practical standpoint. The policy goal of the Act is apparently to weaken software patents. However, the Act broadly defines a "software patent" as "a patent that covers any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent." The definition of hardware is similarly broad. The use of the phrase "could be" will potentially create significant unintended consequences. The SHIELD Act could be applied to patents that include computer hardware or software as just one part of a larger system, or even that don't include a computer at all, creating potential collateral damage across a larger group of patents.