Despite unprecedented interest in so-called “patent trolls” coming from the public, Congress, and the White House, intellectual property lawyers have privately expressed great skepticism that anything will be done to curb the activities of these companies that exist primarily to buy up patents and assert them.
But anti-troll momentum continues to grow. On Wednesday, a letter [PDF] signed by 50 disparate organizations—including the American Bankers Association, the Motion Picture Association of America, the National Association of Broadcasters, the National Retail Federation, and the National Association of Realtors—was delivered to the chairs and minority leaders of both the U.S. House and Senate. The letter strongly urged them to pass some sort of reform legislation that would curb trolls’ activity.
“There is a growing consensus that now is the time to address this issue,” the letter said.
To date, half a dozen pieces of legislation, including the SHIELD Act, introduced by Reps. Peter DeFazio (D-Oregon) and Jason Chaffetz (R-Utah), and legislation introduced by Sen. Charles Schumer (D-NY), have presented different ways to deter trolls. The most recent bill [PDF] was introduced just last week by Reps. Blake Farenthold (R-Texas) and Hakeem Jeffries (D-NY). The White House has also taken executive action to stem the damage inflicted by trolls.
Clearly attempting to hit a nerve with members of Congress, the letter explained that companies are increasingly forced to deal with troll litigation at the expense of innovation, job creation, and economic growth. “Managing frivolous patent suits unfortunately has become an expensive distraction for a large cross section of American businesses” the companies said.
The letter notes that since 2005, the number of defendants sued by patent trolls has quadrupled, and in 2012 patent trolls sued more than 7,000 defendants and sent thousands more threat letters. “This activity cost the U.S. economy $80 billion in 2011, and productive companies made $29 billion in direct payouts,” the letter said.
It went on to explain that trolls no longer only sue large tech corporations, but also go after small and medium-sized businesses of all types.
“In 2012, trolls sued more non-tech companies than tech, spanning a wide range of American businesses,” the letter said. “We seek reforms to the current system that would significantly curb trolls’ ability to extort settlement demands from retailers, technology companies, small businesses, financial services institutions, state and local government entities, and many others who are today the targets of their outrageous claims.”
In the past year, patent trolls have targeted businesses ranging from cafés offering Wi-Fi to podcasters and users of standard office equipment.
Solving the patent troll problem is complicated, especially because there is no clear definition of “patent troll.” But attention is clearly being paid. And a wide range of associations—some with influence, power, and money—are hoping to prove the legal skeptics wrong.
Lisa Shuchman is a reporter with Corporate Counsel, a Recorder affiliate.
