Congress: Protect businesses like ours from abusive patent trolls

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As three entrepreneurs from South Carolina, Connecticut and Florida working in different lines of business, we have encountered a variety of stumbling blocks in starting our own companies. But one barrier in particular has challenged our abilities to thrive: abusive litigation from patent trolls. 

We have seen firsthand how our broken patent system incentivizes patent trolls to target small businesses with frivolous and onerous litigation. Unlike entrepreneurs who strive to bring their innovations to better consumers’ lives – bringing jobs and other benefits to their local communities in the process – patent trolls do not contribute anything of value to society. Instead, they simply buy up vague, low-quality patents – many of which never should have been granted in the first place – and use them to launch patent infringement litigation against innovative businesses.

{mosads}No industry is immune from the reach of patent trolls, and hotels, real estate offices, coffee shops, tech startups, employment agencies, and many more have found themselves on the receiving end of a demand letter from a patent troll. These aggressive letters effectively extort their victims into settlements, threatening an expensive and drawn-out litigation process if they try to fight back. One study found that for a small or medium sized company to defend itself against a patent troll case in court, it would spend an average of $1.75 million, and to take that case through to judgement it could cost up to $3 million. It’s no wonder many small companies like ours are persuaded to pay unjustified settlements to trolls simply to stop the financial bleeding.

Patent trolls are aware of this enormous price tag, and use it to their advantage; evidence shows that trolls are increasingly targeting small businesses because they know they often lack the deep pockets and legal resources to fight back. That’s why it is more critical than ever that Congress close the loopholes in our patent system that allow trolls to thrive and cause hard-working American entrepreneurs to suffer, and in some cases even shut their doors for good.

Some mechanisms do exist to help us fight back. One of us was able to use the Supreme Court’s ruling in the Alice case – which held that abstract ideas using generic computer methods are not eligible to be patented – to win a crucial victory against a patent troll. This decision provides a lifeline to small businesses that helps us defend against meritless patent claims and makes fighting back in court slightly more accessible, and its legacy should be preserved at all costs.

We are visiting Washington this week to ask Congress to reform our patent laws to prevent frivolous litigation from hurting other entrepreneurs across the country. Austin created X-Plane, a flight simulator, that was targeted because it was sold on the Android app store. Michael founded Capstone Photography, a business sued by a troll that claims to own the patent for “providing event photographs via a computer network.” Eric received a demand letter regarding the app he created to help tune drum sets. Like the majority of defendants fighting patent trolls, together we have endured years of sinking thousands of hours and dollars into frivolous patent litigation – hours and dollars that could have been spent building better products.

But the harm of this type of litigation is not limited to monetary cost. We have not been able to move forward on long-anticipated product upgrades and have had to halt development on new services for fear they would also be targeted. We have not been able to hire new workers, have had to lay off staff, and have even gone without benefits ourselves (and in one of our cases cashed out our 401(k)) in order to keep our businesses afloat. When we come up with our next creative idea, we don’t think about how we can bring it to market – instead, we wonder whether we should risk attracting another round of litigation by yet another patent troll. The three of us are still standing, but many of our peers were not so lucky.

It’s time for Congress to once and for all close the loopholes that patent trolls exploit to target American businesses and to preserve our ability to challenge the low-quality patents wielded against us. By supporting the important gains that the courts and the U.S. Patent and Trademark Office have started to make in cleaning up our broken system, as well as legislative reform efforts, members of Congress can have a real impact on the strength and vitality of the small businesses in their districts, states and around the country. Patent trolls impose a tax on innovation; remove this burden, and watch Main Street businesses thrive.

Austin Meyer is the owner and developer of X-Plane, a flight simulator based in South Carolina. Michael Skelps is the General Manager of Capstone Photography based in Connecticut. Eric Rosebrock is the developer of iDrumTech and other apps, and is based in Florida.

The views expressed by this author are their own and are not the views of The Hill.


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