Patent trolls continue to target SMBs despite upcoming Innovation Act ruling

Small and medium businesses frequently targeted by patent assertion entities

When it comes to patent trolls, big enterprises and manufacturing companies primarily have the upper hand over small-medium sized businesses (SMBs) due to their assisting legal teams and deep pockets. So what does an SMB, embedded in the technology sector do to protect itself from patent trolls who not only attempt to collect licensing fees from potential infringers, but have no actual intent to sell or license the product in question to begin with? The unfortunate answer is, not much.

With new technology entering the market faster than manufacturers have time to keep up, the war on patent trolls is continuing to become more prevalent in the U.S. In fact, a recent Southeast Texas Records report suggests that our legal system is actually increasingly being manipulated to allow entities to threaten and bring frivolous lawsuits against legitimate businesses around the country.  

According to Southeast Texas Records, patent suits only continue to increase and put small businesses at risk. Since 2011, the number of these lawsuits alone has tripled, costing our economy $80 billion each year.

“The shakedown process over questionable patents has become so widespread that the business community has sought additional relief from Congress in the form of The Innovation Act,” Scott Joslove, president and CEO of the Texas Hotel & Lodging Association said. Patent trolls repeat the pattern of utilizing alleged patents as a way of seeking quick financial compensation through abusive lawsuits against the underdog.  By targeting vulnerable SMBs, larger organizations have a better chance of winning the patent claims and preventing small businesses from distributing their products associated with the technology in question, which can be detrimental to their business depending on their size and revenue.

While it may seem that SMBs will never stand a chance against the bigger manufacturers, the good news is that a number of partner state associations around the country are working directly with policymakers on Capitol Hill to try to protect smaller companies from these predatory practices.  If the U.S. House of Representatives votes in favor of The Innovation Act, smaller businesses will gain financial security and relief from unreasonable predatory lawsuits and patent trolls.

 

For more news on patent trolls, check out these related reports on Inside Counsel:

Pennsylvania’s AG joins fight against patent trolls

From the Editor: Trolls, trolls everywhere

A troll by any other name: Patent reform from the top down

Contributing Author

Stefanie Mosca

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