Three Ways That Congress Can Help Stop Patent Trolls
Published in Forbes
Who would have thought that everyday business practices like scanning documents would be the target of patent lawsuits? In 2012, patent trolls sued more non-tech companies than tech companies, costing the U.S. economy $80 billion in litigation costs. Now is the time for comprehensive patent reform, not just for tech but for Main Street businesses too. The real estate industry, for example, was caught off guard in 2011, when CIVIX-DDI sued the Multiple Listing Service for infringing its patent on “systems and methods for remotely accessing a select group of items from a database.” As a result of this patent infringement lawsuit, a number of MLSs have been required to pay millions of dollars in licensing fees to the patent holder.
Litigation is disruptive at a minimum and a downright disaster in other cases. Businesses are making choices to not offer certain features or products, and the expense of the litigation–a single lawsuit can easily cost tens of thousands of dollars or more to defend–means displacing other activities like hiring people, research or expanding.
With the economy still slogging its way to recovery, now more than ever, we all have a stake in patent reform. We can’t afford not to. Patent trolls are harming the ability of small business to evolve and innovate and are in turn stifling their ability to compete and succeed.
Congress must stop patent troll abuse by passing comprehensive common sense patent reform legislation – now.
There are several courses of action that Congress can take to end the billions of dollars of waste caused by patent trolls:
Congress should require “demand letter transparency,” which makes it illegal for patent assertion entities to hide behind multiple shell corporations. That way, businesses will know what they’re up against when they receive a demand letter.
Congress should create a cheaper, swifter alternative to litigation by allowing the Patent Office to review business method and software patents when evidence substantiates that the plaintiff is a troll. Patent trolls are able to exploit low quality and overly-broad patents because there are few ways to challenge them without litigation.
Congress should create disincentives for trolling behavior. If a court declares a lawsuit is frivolous, the patent assertion entities should pay court fees. They should also be prevented from suing end users who are easy targets, and instead go after the intermediary manufacturers and producers.
Patent trolls, once the bane of the tech industry alone, are now antagonizing any business that adopts emerging technologies to improve customer services and transactions, and especially the small business owners who lack the resources to defend themselves. That includes realtors in every city and state.
Fortunately, there is a solution. Congress must pass comprehensive patent reform that protects innovators and main street businesses from broad claims of patent infringement.