Main Street businesses across Utah and the rest of the country are feeling the pinch from patent trolls. This year, in one single day in April, patent trolls filed 184 lawsuits across the U.S. in a race against the much-needed protections the Senate’s patent reform legislation would have provided to businesses. More than 6,000 patent lawsuits were filed in 2013 alone. Despite these figures, the Senate chose special interests over Main Street and shelved the bill in late May, leaving businesses like mine at the mercy of patent trolls. But Main Street isn’t giving up and, fortunately for us, both U.S. senators from Utah have been particularly active in the fight against the trolls.
Patent trolls are firms that buy rights to broad technologies and then target companies with licensing lawsuits. Often, trolls send thousands of assertion letters at a time, suing over extremely common business practices such as Wi-Fi or a store locator on a website.
I am the President and CEO of UtahRealEstate.com, which is a regional Multiple Listing Service (MLS). Many realtors and MLS’s in the nation have received demand letters from a patent troll suing over the use of common real estate websites, claiming that they infringe its patent covering "systems and methods for remotely accessing a select group of items from a database." As a result of this patent infringement lawsuit, a number of businesses in the real estate industry have collectively been required to pay millions upon millions of dollars in licensing fees to this patent holder. I made the tough decision to pay the licensing fee instead of risking being brought to court. In exchange for the hefty license fee, my company received no new technology, service or benefit.
This is a serious threat to our economy, and business owners across the country are scared they could be the next to receive a demand letter. A new poll released by Small Business Majority shows that 73 percent of small business owners believe patent trolls should be deterred by penalizing them for filing fraudulent patent assertions or sending abusive demand letters, and 76 percent believe courts should impose financial sanctions against patent trolls that file baseless lawsuits. An overwhelming 82 percent support the creation of new judicial rules to reduce the costs of discovery in patent litigation, so that high legal fees do not force main street businesses to settle out of court when they don’t need to.
Some believe patent reform will stifle innovation and weaken the patent system. Realistically, it will do just the opposite. Developers are holding capital simply fearing a troll might sue them. If we strengthen the patent system and discourage patent trolls from suing arbitrarily, companies can get back to what they do best: investing in their businesses.
I had an opportunity to meet with Sen. Orrin Hatch, R-Utah, on this issue and he is committed to fixing the problem for Utah businesses like mine. I would like to thank Hatch as well as fellow Utah Republican Sen. Mike Lee for their continued support of comprehensive patent reform. Speaking from experience, I know that I was not able to create jobs because I had to pay patent trolls – this is why I, along with many of Utah’s small businesses, urge Congress to shut down patent trolls, work until they get the job done and let us get back to growing our economy.
Rebecca Jensen is president and CEO of UtahRealEstate.com