Iowa Attorney General Tom Miller today urged leaders of two U.S. Senate committees to enact legislation that addresses "patent trolls," entities that try to profit from innovations they had no hand in creating.

Miller and a bipartisan group of 41 state attorneys general submitted a letter to the ranking members of the Senate Judiciary, Commerce, Science and Transportation committees, voicing support for federal legislation to address patent trolls.

 

The Senate bill, S.1720 (Patent Transparency and Improvements Act of 2013), and the related H.R. 3309 (Innovation Act), which recently passed the House, would require greater clarity in patent demand letters and include patent litigation reforms that will help limit the power of patent trolls.

 

"Patent trolls use threats or file abusive litigation to extract money from Iowa businesses, nonprofits and sometimes even from consumers who did absolutely nothing wrong," Miller said in a release. Miller noted that Iowa businesses have complained to the Consumer Protection Division about alleged patent trolls.

 

Patent trolls, also called patent assertion entities, acquire patents solely for the purpose of using them to extract license fees and settlements from those they target as alleged infringers. They target businesses, nonprofit agencies and consumers who purchased or used products with a wide range of patented technology such as printers, scanners, wireless routers and other products commonly used in businesses and homes.

 

The patent troll business model works because defending patent infringement lawsuits is expensive, particularly for small businesses. Successfully defending a lawsuit may cost $1 million or more. Although patent laws make some provision for awarding attorneys' fees, a party that defeats a patent troll in court has little hope of getting its money back.