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Enough is Enough: Patent Abuse is Costing Us $1.5 Billion Per Week

Michael Petricone

December 5 marks an important anniversary. One year ago today, the House of Representatives passed the Innovation Act, a bill aimed at ending abusive patent litigation. Since then, the Senate has delayed, resulting in a staggering cost to the American economy. Patent abuse costs the U.S. economy $1.5 billion per week and the cost is skyrocketing.

We talked to Michael Petricone, CEA’s Sr. Vice President of Government and Regulatory Affairs, about patent trolls and how they are draining both money and innovation from the U.S. economy. 

Do you have any stories about startups that were targeted by patent trolls? How did CEA help?
“Patent trolls frequently target small businesses – they know that startups don't have big legal budgets and are likely to pay off a troll to avoid expensive litigation. One of our members, Todd Moore, creates apps such as ‘White Noise.’ He was sued by a notorious patent troll who claims ownership of a variety of basic Internet technologies. Fortunately, Todd was able to find cost-effective legal counsel and fight off the troll. We then took Todd to Capitol Hill. Here he persuasively urged lawmakers to crack down on patent abuse.”

What resources does CEA have to protect startups when they are sued by patent trolls?
“The patent troll problem is within Congress' power to fix. The problem is that there is now virtually no disincentive to filing large numbers of bogus patent suits. CEA supports a number of changes to patent law, including forcing trolls to pay court costs when they bring frivolous lawsuits. We hope to get a bill passed by Congress in 2015.”

Why should we care about patent trolls? 
“Patent trolls cost Americans approximately 80 billion dollars per year. This is money that is spent on hiring new workers or developing new products. Essentially this is a massive ‘innovation tax’ on the US economy.”

Why is it important to acknowledge the one-year anniversary of the House passing the Innovation Act? 
“One year ago, the House of Representatives passed a common-sense patent reform bill by a huge bipartisan margin. President Obama declared his support and said he would sign the bill. Unfortunately, Majority Leader Harry Reid has blocked the Senate from considering a bill. The majority of lawmakers supports the bill – they just need the Senate to act.”

When you talk to legislators on Capitol Hill about this issue, what do they say?
“Most policymakers agree on the need for reform. They are hearing stories from their constituents targeted by patent trolls – not just tech companies, but retailers, coffee shops, banks, restaurants and more. As expected, the trial lawyers and patent troll lobby are fighting hard to block any reform. We hope to see a strong patent bill pass in 2015, but it will be a tough battle.”

We need people like you – innovators, small business owners, those who work in the tech industry, and all those who believe that innovation is imperative to the American economy. Act now to stop the trolls. 

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