Major Companies Back U.S. Bill To Fight Patent Trolls

By | Aug 16, 2013

Many major U.S. companies, including Morgan Stanley, Google, Wal-Mart and Dell, recently urged lawmakers to pass bills intended to protect new products against "extortive demands" on patents.

Abusive patent litigation has been of increasing concern for companies recently, many of whom who have been hit with lawsuits from firms known as "patent trolls." A patent troll is a person or company which buys intellectual property to collect royalties from companies which might infringe on those patents.

A letter to top Democrats and Republicans on the Senate and House of Representatives' Judiciary Committees included support from 44 major companies in favor of broadening the power of the U.S. Patent and Trademark Office to review patents and strike any which should not have been granted. Although the patent office currently can review business process patents related to financial services with a stricter standard, the proposed legislation will expand that power to include all business method patents.

The expanded program "would increase certainty for innovators actually bringing new products to market, who now face an increasing threat of extortive demands based on low-quality patents," the companies said in a letter. They also estimated the cost of frivolous patent lawsuits at $29 billion in 2011.

The Senate version of the bill was introduced in May by New York Democratic Senator Chuck Schumer. California Representatives Darrell Issa, a Republican, and Judy Chu, a Democrat, launched a similar measure in the House this month.

No action has been taken on the legislation but the backing from major companies might help the bill to gain traction. In June, the White House urged Congress to take steps to reduce the amount of lawsuits filed by patent trolls.

Other notable signatories of the letter include Amazon, Netflix, Newegg, Facebook, Eddie Bauer LLC, Samsung Electronics America, SurveyMonkey, Macy's and the Kroger Co.

Charles Costa, Produced by IBM's Midsize Insider, based on Reuters reporting

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