Washington, D.C. (October 23, 2013) – The Application Developers Alliance and the Electronic Frontier Foundation (EFF) have urged a federal court to suspend a patent troll’s litigation attack against bedrock American companies, including Pizza Hut, Starwood, Hilton Hotels, Fandango, StubHub, and Open Table. The Alliance and EFF asked the court to suspend the infringement action against more than two dozen companies over their use of basic e-commerce technology until the U.S. Patent and Trademark Office reviews the suspect patent.
The companies are being sued by Ameranth to enforce its “21st Century Restaurant” technology, which it claims has a patented method covering all “wireless ordering systems.” Ameranth’s website suggests that it provides restaurant and service company technology to clients, but a deeper review makes clear that its sole business model is to rely on demand letters and lawsuits to extract “licenses” and “royalties” from companies that simply wish to avoid the cost of litigating. Simply put, it is a typical patent troll.
Last week several of the defendants in the case requested that the PTO reconsider its previous allowance of the Ameranth patent. The PTO has broad “do-over” authority under the Covered Business Method Patent program that was created in the 2011 America Invents Act.
“Thanks to U.S. Senator Chuck Schumer, whose amendment was adopted by Congress in 2011, the court in this case has the option to halt wasteful, expensive litigation that seeks to enforce a sham patent while the PTO considers whether this patent ever should have been issued,” said Alliance President Jon Potter. “This case clearly illustrates the brute-force, expensive, and wasteful litigation that is enabled when PTO improvidently approves low-quality patents that are used abusively by trolls and why Congress should expand the Covered Business Method program when it considers patent reform legislation this year.”
“Innovators and productive companies shouldn’t have to waste time and other resources stuck in expensive patent litigation for using everyday technologies, particularly with patents as ridiculous as Ameranth’s,” said EFF Senior Staff Attorney Julie Samuels, who holds the Mark Cuban Chair to Eliminate Stupid Patents. “The CBM process allows people a more efficient route to getting back to what they do best—making things, growing their businesses, and creating jobs.”
The CBM patent review was part of the America Invents Act of 2011 and allows for post-grant review of Business Method Patents related to financial services. Legislation recently introduced by Representatives Darrell Issa (R-CA) and Judy Chu (D-CA) and Senator Chuck Schumer (D-NY) would expand the CBM Program to all Business Method patents.
“Broadening the CBM program will allow the PTO to review and invalidate more bad patents, saving the courts and the taxpayers from wasteful litigation and saving innovators from costly and distracting legal battles,” concluded Potter.
Read the full brief here (PDF).
About the Application Developers Alliance
The Application Developers Alliance is an industry association dedicated to meeting the unique needs of application developers as creators, innovators, and entrepreneurs. Alliance members include more than 25,000 individual application developers and more than 135 companies, investors, and stakeholders in the apps ecosystem.