The U.S. House of Representatives today overwhelmingly (325 to 91) passed the Innovation Act (HR 3309), a major blow to non-practicing entities (NPEs), more commonly known as patent trolls, and their ability to stifle innovation and leverage the legal system to extort money from businesses, developers and individuals.
By now we’ve all heard about the enormous damage that patent trolls inflict on U.S. companies, large and small. Business owners are telling their stories, sharing information about the demand letters they receive and the vexatious lawsuits they are forced to defend. Still, most of the shake downs and payoffs are done in private, cloaked in secrecy and protected by so called “confidentiality agreements.” Now the Federal Trade Commission (FTC) wants to get a better understanding of patent trolls by going directly to the source – the trolls themselves, and they are going to use their statutory power to get it.
Startups and their venture capital investors are caught in the crosshairs of patent trolls, but the damage these unscrupulous litigants are inflicting isn’t just legal or financial – it’s hampering business and stifling innovation, according to a new report that reaffirms the urgent need for aggressive legislative action by the U.S. Congress.
For months, we’ve written about our opposition of patent trolls and their attempts to extort hundreds of thousands—or even millions—of dollars from companies that actually create value. These patent-powered parasites kill innovation, drain the economy and strip away capital from businesses both large and small.
The patent abuse fight is picking up momentum, and we have new ammunition. Yesterday, the senior Senator from Texas, John Cornyn, introduced the Patent Abuse Reduction Act of 2013 (the “PAR Act”). My home state U.S. Senator has just taken a huge step to solve the patent troll epidemic. This bill is a breath of fresh air in the battle against patent trolls and their brazen abuse of the patent system. The PAR Act is designed to “deter patent litigation abusers without prejudicing the rights of responsible intellectual property holders,” Cornyn said in a statement.
For the past several months, we’ve exposed the flaws in the patent system and how they’re being exploited by opportunistic patent trolls looking to extort a quick buck – or hundreds of thousands of bucks, if you will – from businesses large and small. It’s a drain on innovation, a plague to all of technology and a drag on the economy.
For years Senator Charles Schumer of New York has been a driving force in the battle to abolish low quality business method patents, the type that patent trolls regularly use to attack businesses with vexatious lawsuits. He authored Section 18 of the America Invents Act, which is known as the transitional program for covered business method patents. The purpose of the program is to create an effective and fair post grant review for business method patents used in the “practice, administration, or management” of a financial product or service.