More voices join the chorus for patent reform

No readers like this yet.
reform puzzle

Patent reform is hot! The momentum seems to be building in Congress for patent reform to address the problem of nefarious patent exploiters (also known as non-practicing entities, patent assertion entities, and, less politely, trolls). As previously noted here, there are a number of serious legislative proposals circulating, and the President is pressing for new legislation.

This week a broad coalition of businesses added their voice to the pro-reform chorus with a ringing letter to Congress. The letter asked for legislation to expand the Covered Business Method program, which allows for special challenges to the validity of business method patents involving financial services. The letter proposes that the program be expanded beyond financial services to address "these frequently abused patents."

The tone of the letter was not tentative. It gave a strong account of why reform is needed:

In 2011 alone, patent troll activity cost productive companies $29 billion in direct payouts, and even more in indirect costs. Increasingly, PAEs are targeting small and medium-sized companies in every sector of our economy.

Too often, abusive PAE litigation exploits low-quality business method patents. The vague and sweeping scope of many business method claims covering straight forward, common sense steps has led to an explosion of patent claims against processes used every day in common technologies by thousands of businesses and millions of Americans. PAEs often buy questionable business method patents and assert them against dozens of diverse businesses that use standard technologies like document scanners and common features of the Internet, like promoting discounts or conducting live web chats with customers. Indeed, business method patents are litigated nine times more often than other types of patents. These low-quality claims fuel suits seeking settlement payouts based on the costs of litigation, not the merits of the case. It rarely makes sense for a defendant to spend years in litigation and millions in legal fees to prove that a PAE patent is invalid when it could settle for much less.

The letter was signed by a group of 44 companies that was striking in its breadth and diversity. There were many tech and e-commerce companies (including Amazon, Dell, eBay, Google, Facebook, Netflix, and Red Hat), but also retailers (Kroger, Eddie Bauer, J. Crew, Macy’s, Safeway, Wal-Mart), and others. These are not small players!

To be sure, the letter discusses only one reform, and neither it nor other pending proposals will completely solve the problem of bad software patents. Open source supporters should continue to speak out for broader reform. But, it’s good to see that meaningful reform looks increasingly likely.

User profile image.
Rob Tiller is vice president and assistant general counsel for Red Hat, where he manages patent, trademark, and copyright matters. He is a frequent speaker and writer on open source legal issues. Before coming to Red Hat, he was a partner with the law firm of Helms, Mulliss & Wicker, PLLC, where he specialized in commercial and IP litigation.


'abusive PAE litigation exploits low-quality business method patents'

Their definition of 'low-quality ...patents':
patents used to sue us

Just because they call it patent "reform" doesn't mean it is.

These are mere dissemblings by China, huge multinational thieves and their paid puppets -some masquerading as reporters, some in Congress, the White House and elsewhere in the federal government. They have already damaged the American patent system so that property rights are teetering on lawlessness. Simply put, their intent is to legalize theft -to twist and weaken the patent system so it can only be used by them and no one else. Then they can steal at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED. Meanwhile, the huge multinationals ship more and more American jobs to China and elsewhere overseas.

Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.

Most important for America is what the patent system does for America’s economy. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they included inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity and the jobs the commercialization of those inventions bring. For 200 years the patent system has not only fueled the American economy, but the world’s. If we weaken the patent system we force inventors underground like Stradivarius and in turn weaken our economy and job creation. For a robust economy America depends on a strong patent system accessible to all -large and small, not the watered down weak system the large multinationals and China are foisting on America.

For the truth, please see


No one suggested we ignore the patent rights of practicing entities (e.g., inventors), but that we curb the rapacious litigation practices of Non-Practicing Entities.

The numbers quoted in the article are quite real, and the generality of so many "business method" patents is a real problem.

Patents in this country have gone from protecting small dedicated inventors to weapons of war for the big boys in their endless round of non-innovative, non-inventive forms of competition.

I've said it before, and it's still true. When big companies can't innovate, they litigate. I mean, why spend megabucks on R & D when a few hundred grand will net you megabucks in a patent suit over a patent your company bought as part of its arsenal a couple of years back?

NPEs are turning patent protections into a profit center, and that was never the original intent of the U.S. patent system. Let these creeps go out and get honest work for a change.

Creative Commons LicenseThis work is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License.