Fight Over Patent Trolls Heating Up

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    NEWSLETTERS

    In an NBC Connecticut Troubleshooters update, Congress looking to stop companies from doing what one small business owner calls extortion . Meanwhile, a company many would consider a so-called patent troll, comments for the first time to the Troubleshooters.

    Legislators are making progress in the fight against a practice said to be draining billions from businesses both large and small.

    Those businesses are targeted by companies often called “patent trolls.”

    Last year, the NBC Connecticut Troubleshooters showed you a woman who stood up to them, and now she has some powerful people joining her cause.

    Earlier this month Roberta Hurley of Old Lyme got a rare opportunity to speak her mind to members of Congress in Washington.

    “I felt welcomed, people listened,” she said.

    For a while, the small business owner, who helps the disabled find jobs, was not sure she would stay in business.

    Hurley said a mysterious company was threatening to sue if she didn’t pay them more than $75,000 for something done in millions of offices every day.

    “We got a letter that we were infringing on a patent by scanning documents to an email,” Hurley explained.

    The letters came from Folner LLC, and the Troubleshooters learned that Folner, along with dozens of similarly named companies, are owned by a Texas based parent called MPHJ.

    In the patent world, MPHJ is something many would call a “patent troll,” a company that doesn’t create technology, but buys patents from original owners for the sole purpose of enforcing them.

    “Federal law is clear that MPHJ’s patent enforcement actions are lawful, and its process to identify infringers is not unfair or deceptive,” the company said in a statement “Just because such products and processes now are considered commonplace does not affect the validity of those patents.“

    Hurley hired a patent attorney around the time our first story aired.

    “Our patent attorney got another letter... saying that we were scanning documents on email, they were taking us to court," Hurley said. "And he pretty much asked for evidence for whatever we were doing against the patent and we haven’t heard from them since.”

    Many small businesses though cannot shell out the $600 per hour patent attorneys can command.

    “It’s going to shut their business down or they are going to pay off these trolls who are extortionists, basically," Hurley said.

    For that reason, and following research by Boston University indicating patent trolls cost our economy $29 billion dollars in 2011, there is now bipartisan support in Washington, D.C. for patent troll legislation.

    Forty-two attorneys general, including Connecticut Attorney General George Jepsen, support the efforts.

    “It’s sucking billions out of our economy every year," said Jepsen. "I’m glad the U.S. Congress is looking very seriously at this. It’s a national problem that needs more federal intervention.”

    Hurley met this month with members of Congress in Washington on the matter, and she is far from the only Connecticut business dealing with so-called “patent trolls.”

    Large companies in our state say they have also been victims of patent trolls, including Ticket Network, café chain Cosi, and online travel company Kayak.

    Ticket Network CEO Don Vaccaro said the company has been spending half a million dollars to deal with patent troll issues “to prepare for lawsuits, to defend claims, and any way to protect us from this. And unfortunately, it’s becoming a bigger and bigger part of our budget going forward.”

    People watching this situation closely believe the legislation could be passed before Congress’ spring recess.

    It’s a complicated bill because lawmakers have to balance the interests of the people who truly invent things, and need their intellectual property protected.