The government is finally gearing up to squash patent trolls

Congress Patent Reform Support

42 state Attorneys General on Monday sent a letter to ranking members of Congress showing support for patent reform against patent trolls. The Attorneys General letter uses the term “troll” no less than six times in the letter to describe companies or individuals that would attack companies with “dubious claims of patent infringement and using the threat of expensive litigation to extort money,” thus harming the economy and stifling innovation in the process. The letter proposes several amendments that would make it easier for Attorneys General to fight against patent trolling, in light of recent patent-based trolls attacks that have targeted thousands of businesses and non-profits. 

“While these threats were once focused on tech businesses, they are now levied at all manner of businesses, including banks, hospitals, restaurants and hotels,” the letter says.

“The Main Street Patent Coalition applauds the efforts of the Attorneys General in nearly every state for standing up to patent trolls on behalf of main street businesses across the country and for their outspoken support of comprehensive patent reforms,” coalition spokesperson Michael Meehan said. “Congress has an opportunity before it to grow the American economy and to stand with small, main street businesses. The time to act is now.”

Additionally, the coalition who represents various business associations, calls for “Congress to pass common sense patent reform,” proposing several amendments of its own, including requiring patent owners to disclose who they are, fund the Patent Office to better asses patent applications, “sharpen FTC authority to stop fraudulent and deceptive demand letters” and “abusive shakedowns,” protect end users from patent trolls and make trolls pay when abusing patent-based litigation.

The Main Street Patent Coalition press release follows below, and the full Attorneys General letter to Congress is available at this link.

Main Street Patent Coalition: 42 State Attorneys General Call for Patent Reform
AG Letter Attached – mainstreetpatents.org

Washington, D.C. (February 24, 2014) – The Main Street Patent Coalition applauds the efforts of 42 state Attorneys General who today sent a letter to ranking Members calling for patent reform and relief for the main street businesses in their states that are being aggressively targeted by patent trolls.
“The Main Street Patent Coalition applauds the efforts of the Attorneys General in nearly every state for standing up to patent trolls on behalf of main street businesses across the country and for their outspoken support of comprehensive patent reforms,” said coalition spokesperson Michael Meehan. “Congress has an opportunity before it to grow the American economy and to stand with small, main street businesses. The time to act is now.”

The Attorneys General letter (attached) states:

“So-called patent trolls stifle innovation and harm our economy by making dubious claims of patent infringement and using the threat of expensive litigation to extort money from small businesses and nonprofits. We have received many complaints from these businesses and nonprofits, our constituents, who are desperate for relief from the misuse of the patent system. While these threats were once focused on tech businesses, they are now levied at all manner of businesses, including banks, hospitals, restaurants and hotels.

Our offices have responded to these complaints by launching investigations and bringing enforcement actions against patent trolls, which have threatened thousands of businesses and non-profits for their use of common, everyday technology such as scanners and Wi-Fi networks. Our authority to protect businesses derives primarily from state statutes that prohibit unfair and deceptive acts. Though any patent holder has a right to fight infringement, it may not do so in a manner that is unfair or deceptive.”

The Main Street Patent Coalition is calling on Congress to pass common sense patent reform including:

1. Eliminate trolls’ ability to hide behind multiple shell corporations: Require patent owners that threaten and sue to disclose who is really lurking in the shadows and will financially benefit from the scheme.

2. Disarm trolls by improving patent quality and providing a way to fight bad patents: Fully fund the Patent Office so there is more scrutiny of patent applications. Expand inexpensive post-grant review opportunities so trolls think carefully before threatening Main Street with patents that never should have been approved. Trigger automatic post-grant reviews of patents abusively exploited by trolls.

3. Make it easier to punish trolls that send fraudulent and abusive shakedown demand letters: Sharpen FTC authority to stop fraudulent and deceptive demand letters.

4. Protect end users from troll lawsuits based on infringements by intermediary manufacturers and producers: Require trolls to sue the party that is actually responsible for infringement, not the end users who had no input into the product.

5. Make trolls pay when they sue companies frivolously and stop runaway litigation costs: Require courts to assess sanctions against trolls that file baseless lawsuits.

The Main Street Patent Coalition members include: American Association of Advertising Agencies, American Bankers Association, American Hotel and Lodging Association, American Gaming Association, Application Developers Alliance, Credit Union National Association, Direct Marketing Association, The Emob, Food Marketing Institute, Independent Community Bankers of America, International Franchise Association, National Association of Realtors, National Council of Chain Restaurants, National Grocers Association, National Retail Federation, National Restaurant Association, Retail Industry Leaders Association, TicketNetwork and the U.S. Travel Association

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The Main Street Patent Coalition is a national, non-partisan coalition of organizations dedicated to stopping patent abuse from trolls by encouraging Congress to pass comprehensive, common sense patent reform legislation – now. More at http://www.mainstreetpatents.org

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