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Continued: Patent trolls collect "nuisance fees" and political enemies

  • Article by: JIM SPENCER , Star Tribune
  • Last update: June 15, 2013 - 9:32 PM

The House and Senate seem poised to act, as they did two years ago when they agreed to the America Invents Act, the first comprehensive patent reform in more than 50 years.

“Patent trolls are a clear drag on innovation,” Sen. Amy Klobuchar said. “This is not just some made-up anecdotal problem.”

The Minnesota Democrat expects to examine the issue as part of a larger patent hearing she will hold as chair of the Senate Judiciary Committee’s Anti-Trust Subcommittee.

Rep. Erik Paulsen, a Republican representing Minnesota’s Third Congressional District, believes the House and Senate will come quickly to a bipartisan agreement.

“There is abuse that’s going on,” he said of patent trolls. “The challenge is to target the abusers in an effective way without casting too wide a net.”

The way patent laws work, anyone who makes, sells or uses a legally patented device, technology or idea without paying a licensing fee breaks the law, the U’s Cotter said. This fact has led patent assertion entities and non-practicing entities deep into the supply and demand chain.

“They blanket the country with suits on the hunch that some people will pay,” Mike Lafeber of Minneapolis law firm Briggs and Morgan said. “They have stepped over a line.”

A decade ago, “patent owners rarely if ever sued consumers,” Cotter noted. “Today they might go after a coffee shop for using wireless technology.”

Or they might go after an online seller like Mason Cos. for using software it had no role in developing or selling. What started more than a century ago as a shoemaking company is being coerced into paying licensing fees merely “for selling stuff on the Internet,” Scobie said.

“It’s not Oracle calling us up saying we’re using their spreadsheet,” he explained. “It’s law firms that bought a bunch of patents at a fire sale.”

Paying off those people is a “gut-wrenching ordeal,” Scobie said. But it is also an inevitable business decision.

“We are a small organization in a small town,” he said. “If it’s going to cost us $25,000 for a license fee or it’s going to cost us $250,000 to fight, don’t even bother asking me.”

 

Jim Spencer • 202-383-6123

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