By: David Bloom
As the victim of a patent troll that ultimately cost me my small business, I am adamant about the need for patent reform. Most recently I wrote about the need for reform in the New York Business Journal. Afterward I received emails and messages from small inventors, concerned that reform will hinder their efforts to win in court.
From a distance the legislation being considered looks “pro-defendant,” and the false rhetoric put out by trolls and their enablers is confusing. As a small inventor, I understand that changing the rules is scary. But in reality, the House and Senate reform bills are bad for trolls and good for every legitimate patent holder who wants to enforce their hard-earned patents.
The legislation in the House and Senate removes the incentives for frivolous lawsuits. The result will be lower litigation costs for everyone—troll victims and legitimate plaintiffs alike.
First, patent troll cases are clogging the courts making the road to justice longer for everyone. If you are a small inventor you’ll get in front of a judge or a jury much faster without the thousands of troll cases blocking your way.
Second, if you have a legitimate case you’ll be protected from the drag-it-out, drive-it-up tactics of deep-pocketed infringers. Defendants can use unlimited discovery and other motions just as easily as plaintiff trolls.
Third, these bills give you a clear shot at getting your patents confirmed. This is big for legitimate patent holders and terrifying for trolls. Patents that cover real innovation can be reviewed and upheld fast, clearing the way for settlements that make sense.
Opponents of reform argue that fee-shifting and bonding provisions will harm small businesses. This is false—a lie told to scare small inventors into advocating against reform that will help improve the system for everyone. The reform bills in the House and Senate take somewhat different angles but agree the standard should be that fees can only be shifted if the case was not “objectively reasonable and substantially justified.” Trust me, no small business is wasting their money and time with a lawsuit so frivolous as to be considered unreasonable. And there is no bonding provision or any requirement for plaintiffs to demonstrate their ability to pay cash before bringing a lawsuit. This is complete misinformation. These provisions will protect small plaintiffs, while changing the calculus for trolls bringing frivolous lawsuits.
The Innovation Act and the Protecting American Talent and Entrepreneurship (PATENT) Act, in the House and the Senate respectively, will rebalance the asymmetries in the patent system that allow trolls to exploit it, while protecting the rights of legitimate patent holders. Both bills require greater specificity in complaints, modify discovery, protect end users, and make plaintiffs who bring frivolous lawsuits pay the legal fees of the prevailing party.
Most critically, the current system makes us all hugely vulnerable to troll attacks. Trolls don’t care that you own a patent. They don’t care about justice. They just care that defending yourself is more expensive than settling. Your patent won’t do you any good until you get it in front of a judge and jury. That can easily cost you more than a million dollars.
The result of legislative reforms will be a better functioning patent system for all businesses. Trolls that assert weak patents are devaluing all patents, including legitimate patents held by inventors and small businesses. Companies that are frequent targets for patent trolls may ignore smaller legitimate licensors merely because they are lost in the deluge of frivolous license demands and lawsuits. With fewer bad actors poisoning the system, inventors, startups, and all legitimate patent holders have faster access to justice at lower cost while being protected from frivolous suits brought by trolls.
Change can be scary but it is far, far less scary than the situation we all face today. The facts are clear: reform helps all legitimate patent holders and hurts trolls. Plaintiffs and defendants should be united in this effort. No matter which side you’re on, reform makes us all winners.
In 2010, David Bloom founded Ordrx, an app that enables restaurants to share their menu and take orders from many apps and websites. Ordrx quickly attracted customers, investors and press. At its height, David employed eight people. Then his company was sued by a known patent troll with an active practice of suing companies of all varieties.
When companies receive a demand letter or are sued, most decide to settle because the cost to settle is less than the cost of going to court. David decided to fight. Unfortunately, the cost and distraction of defending himself proved damaging. After years of litigation, David's company shut down in April. David is a passionate advocate for patent reform and has written about the need for reform in the Brooklyn Eagle, New York Business Journal, LinkedIn, the App Developers Alliance, and more.