Industry Groups Demand Congressional Action on Anti-Patent Abuse Bills

NEWS ANALYSIS: A new lobbying campaign under way in Washington is seeking congressional action on legislation aimed at reducing the abuse of federal patent law.

Sometime during the long Labor Day weekend you may start hearing a series of ads by an unlikely group of trade associations pressing members of Congress to put patent reform legislation at the top of their priority list.

The associations, including the National Retail Federation, the National Restaurant Association, the Food Marketing Institute and the Internet Association, are targeting the home districts of committee leaders in the U.S. House and Senate, as well as their staffs in Washington with ads explaining that aggressive patent litigation by so-called "patent trolls" is hurting the economy and killing jobs.

According to the NRF, patent trolls are unfairly attacking retailers, small restaurants and grocery stores for simply using technology that they bought off the shelf or from on-line retailers. "Patent trolls use bad patents to bully companies of all sizes, in every economic sector, from coast-to-coast," Michael Beckerman, president and CEO of the Internet Association, said in a prepared statement. "This is essentially legalized extortion, forcing hard-working businesses to go to court or write a check—money they can't spend on hiring and growth."

"Litigation demand letters from patent trolls is a significant and growing concern for the restaurant and food service industry," Scott DeFife, executive vice president policy and government affairs, National Restaurant Association, said in a prepared statement. "It is critical that we increase transparency and disclosure around who these companies are in order to change the market dynamics behind these frivolous and litigious claims."

The concern is growing in all areas of the retail sector, including in the restaurant business because the patent trolls have started changing their focus to users of technology, such as stores and restaurants. Some of the patent claims that these businesses have been sent demand letters for include activities such as providing WiFi in a coffee shop, listing calorie counts in online menus or sending a scanned image as an email attachment. And the proportion of actions against retailers and other technologies is growing.

According to a new report just released in August by PatentFreedom, the percentage of companies involved in such patent litigation is shifting to the point that 50 percent of all such actions were against companies in retail. It's worth noting that PatentFreedom does not use the term "patent trolls" to describe organizations asserting patent claims. Instead, the organization refers to them as NPEs, or "non-practicing entities," which includes all such companies that own patents, but don't use them in their own business.

PatentFreedom also points out that not all NPEs could be classified as "patent trolls," a term that the organization says is not helpful in dealing with the issue.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...