Small Businesses do not have Resources to Fight Patent Trolls

Original Source 

As a pilot and a developer, I set out in 1995 to develop the most realistic and advanced flight simulator ever created for use on personal computers. Remarkably, I succeeded, and the X-Plane flight simulator attracted early attention and users from NASA, the Federal Aviation Administration and Boeing. For nearly 20 years we have continued to improve X-Plane, and it has been used by thousands of pilots and aviation enthusiasts. Our company is proud to have built an extraordinary product for our loyal customers and to have improved the level of safety in our skies.

In 2010, we decided to make X-Plane available on the Android operating system. This was a significant investment, but was justified by the opportunity to reach the large, global audience that uses Android OS phones and tablets.

We sell X-Plane on Android for only a few dollars, which we can afford because Google provides copy protection code for apps in the Google Play store. Copy protection software — which is also commonly used for digital movies and video games — confirms that an app is paid for, and is not pirated, whenever a user starts to play.

After 15 years of developing and selling X-Plane, imagine my surprise when I was sued for patent infringement in 2012, and the complaint was because we use the Google-provided copy-protection software. The patent owner, Uniloc, has sued dozens of companies, but I’m not sure why X-Plane was picked, out of thousands of Android apps, to be its next victim.

Uniloc has a long history of suing companies for patent infringement. Sometimes Uniloc sues large companies that can afford to fight back, including Microsoft and Rackspace. But X-Plane’s entire existence is threatened by a patent lawsuit, as average costs for infringement litigation exceed $2 million.

I understand why most companies settle patent infringement lawsuits even when they believe they will win the fight — because the price of fighting dwarfs the price of settlement. I also understand the simplicity of the patent troll business model: Buy a cheap patent, threaten to sue and force companies to pay millions of dollars in legal fees, and then settle for a mere $100,000.

X-Plane is not unique. The majority of defendants battling patent trolls are small businesses, and we simply do not have the resources to endure the uncertainty, high cost, and hours of distraction required by patent litigation. And the costs go well beyond monetary expense. X-Plane has abandoned product upgrades and new products that were in development because we fear they will attract more lawsuits. Our vision of making skies safer is less attainable because we are busy fighting scammers who exploit our patent system and judicial system to extort “licensing fees.”

The good news is that the Congress is working to stop abusive patent lawsuits, and President Obama reiterated the need for patent reform during his State of the Union address earlier this year. Last December the House of Representatives passed the Innovation Act, which will help small business by requiring patent trolls to pay defendants’ lawyers’ fees when lawsuits are meritless, and help end users when an infringing activity is simply using a product that is provided by others. But the Senate Judiciary Committee — including Sen. Lindsey Graham — must do more to stop abusive trolls by passing patent reform legislation in 2014.

I am pleased that the Senate bill will require more specific information about the patent and the basis of the infringement accusation in “demand letters” that patent trolls send to scare companies into paying unjustified fees. But the Senate should also expand opportunities to challenge and invalidate poor-quality patents — like the one that I was sued over — in less expensive administrative proceedings instead of in federal court. Low-quality, business-method patents are fueling patent troll litigation and extortion, and victims like X-Plane need more options to fight back.

Though we were blindsided when Uniloc sued X-Plane, we were able to work with several small companies also sued by Uniloc to hire lawyers together and defend ourselves. Our fight in court continues and we’re hoping for a positive outcome that will keep all of us in business.

Patents were designed to benefit society and spur innovation. But our system is broken when it rewards bad actors that threaten entrepreneurs and innovators who have done nothing wrong. I hope Sen. Graham will stand with small business and with innovators by supporting patent reform and stopping patent trolls.