By Jennifer Martinez and Brendan Sasso - 07/31/13 12:33 AM EDT
Facebook, Google, Yahoo and other Internet companies joined with major retailers like J.Crew, Macy's and Wal-Mart on Tuesday to call on Judiciary Committee leaders to crack down on patent trolls.
More than 40 top U.S. companies told House and Senate Judiciary panel leaders in a letter that patent trolls have "exploded in size and scope" and represent the bulk of all current patent litigation.
"We need to ensure that our patent system promotes innovation and job creation, not abusive litigation," the companies write in the letter.
They voiced support for a legislative solution that would expand a Patent Office program currently used to re-examine patents related to financial services, known as the covered business method program. That approach is taken in legislation put forward by Reps. Darrell Issa (R-Calif.) and Judy Chu (D-Calif.) last week, as well as another bill by Sen. Charles Schumer (D-N.Y.) that was introduced earlier this year.
Expanding the scope of the covered business method patent program beyond its financial services limit "would enable the Patent Office to reconsider the validity of issued business method patents and provide a targeted 'surgical strike' against the worst of these frequently abused patents," the companies argued in the letter.
Amazon, Netflix, Twitter, eBay, Verizon, Dropbox, LinkedIn, Samsung, Salesforce.com and Spotify were among the other tech companies that signed the letter.
Patent trolls are entities that acquire bundles of patents and make money off of them by threatening to sue other companies for infringement. Critics say patent trolls stunt innovation because they go after up-and-coming companies that can't afford costly court battles and force them to agree to an expensive settlement instead.
The firms target companies creating products, but they also go after small businesses using common technologies such as an office scanner or a Wi-Fi network.
The White House announced a series of executive actions to crack down on abusive patent litigation in June.
Federal Trade Commission Chairwoman Edith Ramirez has also encouraged the agency to use its authority to conduct a comprehensive review of "patent troll" activity. During a keynote address in June, Ramirez said patent trolls file half of their lawsuits against non-tech companies that simply have IT software embedded into their products, such as financial services companies with mobile banking apps or restaurants with websites.