FMI, NRF Combat Patent Trolls

The Food Marketing Institute (FMI) and National Retail Federation (NRF) each issued statements today in support of the Innovation Act of 2013 patent reform legislation.

“This new legislation will bring greatly needed reforms to our nation’s patent system by addressing the growing problem of patent trolls,” said FMI Regulatory Counsel Erik Lieberman. “By increasing transparency, leveling the playing field in the courts and providing relief to end-users of technology, we believe this legislation, if enacted, will significantly reduce the billions of dollars of costs patent trolls impose on our economy each year. Entrepreneurs, retailers and consumers will all benefit from this important legislation. We commend the House Judiciary Chairman, Rep. Bob Goodlatte (R-VA), and the cosponsors on their efforts to address the problem of patent trolls.”

According to its website, Stop Bad Patents, patent assertion entities (PAE) or “patent trolls” are entities that buy patents and launch lawsuits, but do not create or sell anything. They prey on small software start-ups, hotels, airline companies, restaurants, retailers and mom-and-pop shops. In fact, half of the companies targeted by trolls are not in the technology industry, and the majority are small businesses.

“Patent trolls intentionally abuse the patent and legal systems to extort payments from companies large and small,” said NRF SVP of Government Relations David French. “Trolls purchase arcane patents and then sue susceptible companies to extract hefty payments, whether in the form of licensing agreements or legal settlements.

“Patent trolls are increasingly targeting chain restaurants and retailers,” he continued. “Traditional brick-and-mortar merchants and e-commerce companies alike have had to deal with a growing number of patent troll lawsuits over the last few years. Restaurants and retailers are targeted by trolls not just for their use of cutting-edge technology and innovations but for more practical applications as well.

“Patent trolls account for close to half of all patent lawsuits in the United States, and their suits cost the economy tens of billions of dollars a year. Lawsuits that hamper technological innovation and adoption, crowd our court system, and ultimately drive up costs for retailers and prices for consumers. Addressing and combating the rise of patent trolls is a top priority for retailers, and the introduction of this bill shows that it is a growing congressional priority as well. NRF welcomes continued congressional attention to patent troll abuse, and looks forward to working with policymakers to bring the issue under control.”