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Patent Trolls and How They are Affecting Main Street

By | 03.20.14

During the South by Southwest music, film and interactive conference and festival in Austin, Texas last week, a group of patent attorneys convened to discuss how the nation’s patent laws need to be reformed to protect small business owners.

“More and more, we’re seeing Main Street businesses being sued on patents, often for using basic online tools. We need to find a solution that can reduce the risk for small and medium companies,” said Google Senior Counsel Lee Dunn, who participated in the gathering.

An example of this is a small retailer who utilizes something as benign as a store locator on their website.  Patent assertion companies, referred to by critics as “patent trolls”, purchase patents on ambiguous functionality, like a store locator, and then demand royalty fees from small companies using it. If the companies don’t comply, they sue for intellectual property infringement.

According to Dunn, most of these cases rarely make it in front of a judge because the patent firms tend to go after companies that cannot afford to pay for all of the legal feels required to adequately defend themselves.

In an attempt to cut down on these types of frivolous lawsuits, Congress passed the America Invents Act, but Dunn goes on to say that more work needs to be done to truly combat litigation.

“It’s very important that we get this right,” Dunn stated. “If we don’t, it will cause all sorts of angst and uncertainty in the market.”

Additionally, the House of Representatives is now considering a bill that would require infringement lawsuits to go into more detail about exactly which patent was infringed upon and how.

Reference:

Harrison, J.D.,“SXSW: How to reform the nation’s patent laws for entrepreneurs and small businesses”. Washington Post. 3/11/2014.

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