Stopping the trolls
When a customer walks into a Vermont store like Onion River Sports, they do not immediately think, “I bet these folks deal with patent lawsuits,” but Main Street retailers throughout the state have had to deal with the arcane headaches of patent law.
Small and medium-sized businesses are often popular targets for “patent trolls” — people who buy up vaguely worded patents and extort business owners for licensing fees with the threat of legal action if they don’t comply. These trolls will buy up blocks of low-quality patents, then in a shotgun approach come after hundreds or thousands of businesses. Often they target businesses for using e-commerce services that we all take for granted, like an online shopping cart, sending an email confirmation, claiming the rights for the method of navigation on a site or even for using a fax machine. Their claims are baseless, but it is cheaper to pay out of pocket than to fight them in court.
This is a big problem. It costs Vermont millions and costs the United States billions and deeply affects Main Street businesses. We’re often easy targets for the trolls because we usually lack the deep pockets (and the time) to wage endless legal battles. We are forced to settle in order to move on.
As a state, we’ve done a great job of fighting these trolls. The governor, the Legislature and the attorney general have all taken unparalleled steps on this issue. We’ve passed some of the strongest language in the country cracking down on patent trolls. Now we need strong action on the federal level.
A practical solution to this problem is the expansion of the Covered Business Method Program. The program is a protection already afforded to Wall Street. It allows the U.S. Patent Office to revisit and, over time, eliminate glaringly bad patents. It is a fair and equitable solution that protects legitimate patents but ensures that bad ones cannot be used over and over again by the trolls.
Legislation also needs to address the many tricks these trolls employ to avoid paying for the litigation they start. They will often set up a shell limited liability corporation, with the only asset being the low-quality patent itself, thus insulating the troll from any liability.
Vermont is an innovative state that has allowed our small-town stores to provide products to the world. We also are in the unique situation where our congressional leadership can stop bad trolls and make innovation safer for small businesses across the country. Covered Business Method Program expansion will mean fewer lawsuits and more time for businesses to invest in creating jobs in Vermont.
The writer is owner of Onion River Sports.
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