Senator McConnell, don't ignore Kentucky's small businesses
© Haiyun Jiang

Those who follow Congress are rarely optimistic about what changes the legislative branch can make in an election year. However, this year could be different because of one issue that has historically attracted high levels of bipartisan support: patent reform. The Innovation Act, a patent reform bill, passed the previous Congress by a bipartisan 325-91 majority. Now, Congress has the opportunity to act on a bill that would crack down on patent trolls and put an end to venue abuse. As this year brings yet another prospect for attaining comprehensive patent reform, the leadership of Senate Majority Leader McConnell will be crucial to bring this important legislation closer to a vote and ultimately protect small businesses and the citizens they employ.

Though the fight against patent trolls has been underway for years, it has never been more critical that Congress close the loopholes in our patent system that have allowed trolls to flourish. Instead of creating new inventions and contributing to the type of innovation that drives America’s economy forward, patent trolls seek only to initiate infringement lawsuits, using patents as weapons against American businesses. While some patent trolls do target large companies, most have specialized in going after small and medium size businesses that lack the resources to properly fight against the troll’s frivolous claim. Between 2005 and 2014, trolls filed a total of 97 lawsuits against 42 companies in Kentucky, with nearly three-quarters of those suits filed in the past five years alone.

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Patent trolls’ tactics are nothing less than extortive, but they are unfortunately perfectly legal under our current patent system. Trolls send vague, threatening demand letters to businesses, expecting that the company will not be willing or able to finance an expensive and lengthy battle and will instead opt to pay the troll an amount of money to settle the case. If this wasn’t bad enough, the deck is also stacked against businesses that do decide to fight against the troll’s wrongful patent assertion in court – the typical troll will sue in the Eastern District of Texas, which is widely considered to be the most troll-friendly court in the country.

For its part, Kentucky has taken some measures to show it is not a friend to patent trolls. In February 2014, the Senate passed a bill that would protect the recipients of bad-faith demand letters and allow them to sue trolls that try to extort money from them. This provision was very important to me, and I came out in favor of this legislation at the time. My company, On Call Central, had received threatening communications from patent trolls, and I was not willing to let them have their way without a fight. I told my story to Kentucky legislators and urged them to push forward with this important legislation. While the bill did make it through the Senate, it never came to a vote in the House and was never signed into law.

Kentucky’s situation is not unique: in 2015, 21 attempts to pass patent reform by state legislatures either did not succeed or have not yet come to a vote, and, nationwide, only 27 states have enacted anti-patent troll legislation. While these efforts are important, their moderate success highlights why it is so critical that Congress pass comprehensive patent reform. Rather than trying to enact 50 different ways to address this issue in each state, Congress has the power to pass an overarching solution that will have a universal impact on our country’s broken patent system.

This year, Sen. McConnell will have a chance to push forward on the newly-introduced VENUE Act, which would pass common-sense reforms requiring patent infringement lawsuits be brought in courts tied to one of the parties in the litigation, rather than a court selected by the plaintiff for its friendliness to patent trolls and willingness to award huge settlements. Together with other bills that have already been introduced, such as the PATENT Act in the Senate and the Innovation Act in the House, these bills promise to reform abusive demand letters, close the loopholes that trolls exploit to extort businesses, and minimize trolls’ incentive to engage in abusive and frivolous patent litigation.

Each layer of our current patent system favors trolls and fails to protect the innovative entrepreneurs and inventors it is meant to protect. Sen. McConnell faces an important decision: continue to allow patent trolls to extort America’s businesses, or defend entrepreneurs and the jobs they create. His leadership on patent reform will help to right these injustices and protect small businesses across the country from the abuses of patent trolls.


Sidney VanNess, Ph.D. is CEO of On Call Central, a Lexington-based software company.