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.