Imagine being sued for doing something as common as using a copy machine – it’s a real fear thousands of small and large businesses face because of so-called patent trolls.
Roberta Hurley remembers when she got a letter in the mail accusing her business of patent infringement.
Southeastern Employment Services of Old Lyme, which helps the disabled find jobs, was being accused of violating a patent simply using a copier to convert documents to emails, according to a lawsuit from a Delaware company with a strange name and a phone number that didn’t work.
“It was a very legal looking letter and very threatening,” Hurley said.
It turns out, after hiring a patent attorney, Hurley stopped getting the letters, and didn’t have to pay the $70,000 – $1,000 per employee – the lawsuit was demanding.
Hurley also learned that the lawsuit actually came from something commonly called a patent troll, a party that doesn't invent anything but buys other entities’ patents cheaply in an effort to siphon money from businesses that usually have often done nothing wrong.
“It’s really a huge problem,” Hurley said.
She went to Washington to make her case as a bill was working its way through the Senate to put a stop to this practice.
“I really felt that we were being listened to and I know, I felt we had a lot of people in our corner,” she said.
The chief sponsor of the bill, Sen. Patrick Leahy of Vermont, certainly sounded like he was strongly behind his proposed legislation.
“You don’t have to be a patent expert, to know what is going on. I mean this is as close to robbery as you can think of,." Leahy said. "These actions abuse the patent system. Trying to extort settlements from customers and small businesses that have no real means of fighting back.”
Then in late May, he pulled the bill, saying people on both sides of the issue were far apart on the bill’s final language.
“It’s discouraging. I was really hoping that this practice would be stopped," Hurley said. "It’s a huge money making industry.”
But who are the people on the other side of this issue? There are a number of players, including drug companies, research universities and inventors, for example, who say the proposed patent reforms went too far.
Attorney Raymond Van Dyke says he represents inventors, and believes most of those filing patent infringement cases are trying to protect their intellectual property, though the U.S. Patent Office says there are no figures available to verify that.
“Any legislation should target that particular abuse, those particular actors, not everyone in the patent community,” Van Dyke said.
He said that, among other things, his clients take issue with a reform to stop patent trolls called fee shifting, when the party that loses a patent infringement suit must pay the legal fees for both sides.
“If the small inventor or the small company that sues the larger company loses, the larger company could put a lot more resources into that equation and then the loser would have to pay, it does shift the equity, so to speak,” he said, adding that existing patent law gives judges leeway to make the loser pay the legal fees for both sides.
Hurley said waiting for a judge to possibly decide in your favor in a patent infringement case is a financial gamble many small businesses can not take.
“You have to get to court to have that happen and I don’t know if I would have been able to afford going to court," Hurley said. "And that’s what’s happening. People can’t afford an attorney, can’t afford to go to court, so they’re paying these people off.”
Last month, the U.S. Supreme Court issued rulings that make things tougher on patent trolls, tightening the rules on how patents are awarded.
But many businesses say that will not stop patent trolls from trying to enforce existing patents, and reforms from Congress will still be necessary.