Patent ‘trolls’ effective tax on innovation

American businesses have a target on their back. Patent trolls are using flaws in our current patent law to attack companies in nearly every economic sector with lawsuits.

Businesses large and small are unexpectedly receiving letters demanding money for alleged patent infringement. The businesses have a choice — pay legal fees to fight the unfounded allegation or pay a settlement amount to avoid the legal cost even though the company has done nothing wrong.

Realty, construction, retail shops, hotels, grocers, convenience stores and restaurants have all been affected — sued for something as small as having a search bar or “shopping cart” on their website. Members of the newspaper industry were recently part of a case that alleged the business methods used to convert their own content to be used on the Web was a patent infringement.

The total impact on our economy has been estimated as high as $29 billion. Rather than investing and growing businesses, companies are forced to divert valuable resources to fight frivolous lawsuits.

Patent trolls, or companies who do nothing but buy overly broad patents they then use to sue businesses, have effectively placed a tax on innovation. These companies do not make or produce anything that is consumed by the American public.

They exist to prey on hardworking Americans and abuse our current patent system. The country is on pace to have record numbers of patent litigation this year, breaking last year’s record.

Like all industries, the newspaper industry is ever-changing. We strive to deliver your news to you in the most efficient way possible. Being brought into a lawsuit to defend our ability to give you your news online would be a tax on efficiency and innovation. The resources used to defend our business or for you to defend your business could be better used by investing in the local community.

There is a solution. Congress has an opportunity to pass common sense patent reform right now. Earlier this year, the PATENT Act was introduced in the U.S. Senate and the Innovation Act of 2015 was introduced in the House of Representatives. Both have support from both sides of the aisle but have yet to be voted on.

We ask Indiana’s delegation in Washington to urge the Republican leadership in Congress to take a vote on this important issue, now.

If passed, this commonsense bill would make it harder for patent trolls equipped with overbroad patents to file baseless and frivolous lawsuits against businesses. It would increase transparency in our litigation process by heightening pleading standards so that assertion entities are required to provide more detailed information beyond vague and threatening demand letters.

The discovery process would also be streamlined so that defendants are no longer left with oppressive demands and costs, while provisions would require the most egregious plaintiffs to pay the legal fees of the defendant they dragged into a mess that has now disrupted their entire lives.

Congress should not let another opportunity to reform our patent system slip through the cracks. We can’t afford to delay legislation that will help American businesses invest in the things that matter — hiring the next generation of bright minds and investing in research and development.

At issue

Patent trolls are buying up vaguely written patents and then issuing demand letters against large and small businesses alleging patent infringement for things like having a shopping cart or a search bar on one’s website.

Our point

Don’t delay legislation that will help American businesses invest in the things that matter—hiring the next generation of bright minds and investing in research and development.