This month, transit agencies around the country are in D.C. for the American Public Transportation Association legislative conference. An issue that surfaced in many of our meetings is “patent trolls” — shell companies that purchase patents with no intention of innovating or inventing, but rather, suing those who do — and how they are crippling transit agencies with meritless threats.
To move America forward, U.S. transit agencies can no longer be threatened by frivolous lawsuits from brazen patent trolls. They are draining time, money and resources that would be better used deploying high-efficiency buses, investing in improved light and commuter rail systems or enhancing public transit options throughout the country.
In the next month, the Senate Judiciary Committee will meet to discuss reforms to our patent system. We spent our time in D.C. meeting with key staff in the offices of Sens. Richard J. Durbin, D-Ill., and Mark S. Kirk, R-Ill., and several congressmen to ask them to pass meaningful patent reform legislation immediately. Without a change in the law, patent trolls will continue to wreak havoc on transit agencies and all types of businesses. They already suck $80 billion out of the U.S. economy and show no signs of stopping.
In Illinois, transit agencies provide transport for millions of passengers every year, getting residents, students, workers and visitors where they need to go. We are proud to provide transportation across our state, reducing congestion on our roads. We want to continue creating positive transit experiences and innovative technology for our customers but are worried we will be derailed by bogus patent infringement claims from patent trolls. A number of transit systems in Illinois have been targeted by trolls, including Metra, serving suburban Chicago, and the Champaign-Urbana Mass Transit District — both of whom settled, agreeing to discontinue use of technology vital to a seamless public transportation system, rather than pay cumbersome legal fees.
The fact is, we are run by public money and we’re at a disadvantage to defend ourselves from frivolous lawsuits by patent trolls. When we are forced to defend ourselves or settle meritless lawsuits, it comes at the expense of taxpayers at a time when public transit needs are great. And it’s not just transit agencies. All types of businesses, including manufacturers, restaurants, tech firms, retail stores, coffee shops and many more have suffered from the attacks of patent trolls.
The approach patent trolls take is deceptive and misleading. That is the business model of the troll — threaten people into settling for large sums. They are not inventors. They are not entrepreneurs. In fact, many are owned by venture capitalists looking to make quick returns. The trolls send vague demand letters and take a shotgun approach in their accusations. These threats are expensive and time-consuming and deprive agencies of key resources we need to serve our customers. Congress has spent a great deal of time and resources making investments in transit projects across the country, and we want to see that trend continue without the distraction and threat of trolls.
To combat this loss of resources and innovation, we are urging Congress to support critical solutions to end the abusive practices of patent trolls. Meaningful patent reform should make the covered business method available to all industries, including transit, which is not currently protected. Only financial services companies have the benefit of a second set of eyes at the Patent and Trademark Office. Reforms should also require holding companies with no assets, who do the dirty work for patent trolls, to put up a bond to ensure victims are paid when they win in court.
We are joining with a broad coalition of other businesses and organizations in supporting patent reform. Our stories aren’t unique. This issue affects the entire country. We believe reform will strengthen the patent system and ensure American transit agencies continue to be leaders in the fields of innovation and technology. Without reform, patent trolls will continue their attacks on transit agencies and all types of businesses across the country.
Laura Calderon is the executive director of the Illinois Public Transportation Association.