Lawmakers Aim To Stop Patent Trolls From Shaking Down Businesses For Using Basic Office Equipment

We’ve written before about the lowest level of patent troll, the kind that claims to have a patent on some widely used technology — like photocopying or scanning — and instead of targeting the companies that make products that allegedly violate those patents, they try to bully small businesses into paying thousands of dollars for the use of basic office equipment.

The particular trolls we mentioned in that previous article were demanding that allegedly offending businesses pay $1,000 per employee for violations of a supposed patent on photocopiers that can scan documents then e-mail them.

It’s much like the porn troll lawyers who threaten a lawsuit against alleged file-sharers but who will forget about the suit for the payment of a few thousand dollars.

In the patent cases, the patent troll is betting that the cost and hassle of mounting a legal defense would be more onerous than simply paying what the troll demands.

Ars Technica writes that in recent weeks, members of both the House and Senate have made bipartisan efforts to put an end to this sort of nonsense.

First there was the bill introduced in the House by Virginia Congressman Bob Goodlatte. Among many changes aimed at making life harder for trolls, the law would give end-users of a technology the ability to stay any lawsuit filed against them by the supposed patent-holder until the troll has resolved his case against the manufacturer of the allegedly offending product.

In a Senate committee hearing earlier this week, a lawyer for Cisco explained how one patent troll company, Innovatio, had tried to convince end-users to settle patent violation claims regarding a Cisco product.

“They told [letter recipients] that thousands of companies had already paid Innovatio,” the Cisco lawyer recalled to the panel, saying that Innovatio left out a crucial point in those letter. “Did they tell them that manufacturers like Cisco were eager to defend them? No.”

While Cisco was unable to convince the courts that what Innovatio was doing was illegal, a recent ruling did limit the company to only demanding a few cents per alleged end-user violation in that case. Since that takes away any financial motive on the troll’s part, it effectively ends those demand letters.

“We spent $13 million fighting Innovatio,” said the Cisco counsel. “But I’m proud of every cent.”

One lawyer representing a large group of patent holders argued before the Senate panel that there is no real statistical evidence that this sort of trolling is widespread, mostly because no central body keeps track of all the demand letters that are sent out every year. At the same time, he argued against a proposal that would require patent holders to register each of their demand letters.

“Isn’t a registry [of patent demand letters] a way we would get past anecdotal evidence?” pointed out Senator Claire McCaskill of Missouri.

Senator wants end to demand letters from “bottom feeder” patent trolls [Ars Technica]