AUSTIN, Tx. — Senate staffers who got a lot of emails about "patent trolls" today can thank South by Southwest.
Speaking to an audience of about 150, Reps. Hakeem Jeffries and Blake Farenthold said the other chamber of Congress needs to move on legislation to combat frivolous patent lawsuits.
The freshman New York Democrat and sophomore Texas Republican, both members of the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, co-sponsored the Patent Litigation And Innovation Act (HR 2639), one of a number of proposals to combat patent trolls.
Patent trolls make money by filing suits against companies making vague claims of patent infringement. Rather than take the case to court for a long, expensive fight, defendants often choose to settle, which can bring in tens of thousands of dollars per case for the trolls.
Jeffries recounted that when he first heard the term “patent troll,” he thought it was a little harsh. But as he encountered descriptions of patent trolls as extortionists and terrorists, he realized calling them trolls was in fact “genteel.”
“It’s an insult to the other kind of trolls,” Farenthold injected.
“I think trolls might be offended,” Jeffries joked.
The economic effect of patent trolls in the United States is estimated to be $20 billion annually; individual lawsuits can cost a company $2 million to $5 million to defend, according to the panelists. The cost is often too much for new businesses to bear.
The session, Clubbing the Patent Trolls: How We Can Fight Back, also included Alan Schoenbaum, senior vice president at Rackspace, a cloud data storage company, and Julie Samuels, executive director of tech advocacy group Engine and formerly the “Mark Cuban Chair to Fight Stupid Patents” at the Electronic Frontier Foundation.
Farenthold first learned of the issue when he met Schoenbaum at 2013’s SXSW festival. The legislation he and Jeffries crafted focused on shifting legal fees for the defendant to the plaintiff in cases where suits were determined to be frivolous and limiting the discovery period (the longest and most costly portion of a lawsuit), until a complaint is determined to be legitimate. Other measures in consideration also include overhauling the U.S. Patent Office and increasing its funding. The Supreme Court has two cases in its docket regarding patent trolls.
Farenthold emphasized the importance of citizens reaching out to members of Congress in person to make their opinions heard. The Senate is “full of old guys in wheelchairs with IVs, and they don’t understand tech stuff,” he said, with an added apology to the “younger guys” in the chamber.
During the panel discussion, moderator Michael Petricone of the Consumer Electronics Association encouraged the audience to text a CEA service that would send messages about fighting patent trolls to the senders’ home-state senators.
“This isn’t a Republican problem; this isn’t a Democrat problem; it’s an American problem,” Petricone said.
Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station's Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act on July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.