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CTA Calls for Aggressive Reforms to Crack Down on Patent Trolls, Expresses Support for Inter Partes Reviews and USPTO

Arlington, VA – July 12, 2017 – 

Ahead of tomorrow's House Judiciary Subcommittee on Courts, Intellectual Property and the Internet's hearing examining "The Impact of Bad Patents on American Businesses," the Consumer Technology Association (CTA) has sent a letter to Chairman Darrell Issa (R-CA) and Ranking Member Jerry Nadler (D-NY) asking them to lead the effort in Congress to "pursue reforms such as heightened pleading standards, reasonable parameters on discovery, fee shifting, and customer stay to level the playing field between plaintiffs and defendants in patent suits."

“Patent trolls do not create any products,” CTA's President & CEO Gary Shapiro says in the letter. “Instead, they exploit loopholes in our patent system to shake down hard working American entrepreneurs. This behavior costs the American economy an estimated $80 billion a year. Low quality, broad and vague patents are the favored tools of patent trolls. An overly broad patent, often purporting to cover basic tasks or technological functions, allows trolls to claim infringement by an outsized number of companies."

CTA represents most of the top patent holders in the nation as well as many small companies that owe their success to patented technology. These businesses rely on a strong patent system, but unfortunately, they are also the victims of widespread extortion by patent trolls.

“When companies do fight back, it has been shown that trolls' lose infringement lawsuits approximately 90 percent of the time." the letter points out. “Despite this extraordinarily high rate of false infringement claims, fighting back simply is out of reach for most victims of patent extortion. Eighty percent of troll victims are small- and medium-sized businesses, and fighting a patent case until the end costs well over $1 million.”

The letter concludes, "In cases where the troll's patent is not valid, we need fair and efficient mechanisms to take that patent off the market and prevent it from being used for future extortion attempts. Weeding out bad patents indisputably leads to a stronger patent system. The Inter Partes Review (IPR) program at the U.S. Patent and Trademark Office (USPTO) allows an expert board to take a balanced and careful look at questionable patents and determine if they should not have been issued in the first place. The IPR process is more cost- and time-effective than district court litigation. This empowers small- and medium-sized businesses, who could not typically afford a court case, to challenge the validity of a bad patent. Congress should work with the USPTO to ensure that successful programs such as IPR remain fully operational.”