Mercury News editorial: Patent trolls finally are in the cross hairs
Mercury News Editorial
Posted: 03/14/2014 10:00:00 AM PDT | Updated: about 20 hours ago
Patent trolls are creatures that prey on Silicon Valley. They're so evil, they give other trolls a bad name.
Using what FindTheBest.com's Danny Seigle calls weapons of mass innovation destruction, they force the valley's most promising companies -- big and small -- to waste time and energy fighting nuisance lawsuits.
Every year, patent trolls cost the U.S. economy an estimated $30 billion, hitting companies such as Apple and Google with more than 100 active patent claims.
Congress has a chance to largely rid the valley of this legalized extortion. In a rare display of bipartisanship, the House passed a bill in December by a 325-91 vote offering strong deterrents to bogus suits.
U.S. Rep. Zoe Lofgren, D-San Jose at her office in San Jose, Calif., on Friday, January 11, 2013. (LiPo Ching/Staff) (LiPo Ching)
Rep. Zoe Lofgren, of San Jose, was a leader in that accomplishment. We wish Sen. Dianne Feinstein were playing a similar role in the Senate, but the California Democrat is missing an opportunity to champion legislation.
Because of this, 70 California companies have signed a letter that Feinstein will receive Monday asking her to help lead the way. Among them are Apple, Cisco, Facebook, Google, HP, Netflix, Oracle, Twitter and Yahoo.
Feinstein reportedly wants to make sure the legislation protects valuable patents derived from California universities' research. It's a legitimate concern, but it can be accomplished while also protecting valley firms.
The companies worry that the Senate bill scheduled to be finalized in the next three weeks will lack key provisions of the House bill. Their letter asks Feinstein to support "enhanced patent case fee shifting and discovery reforms, provisions to protect end users and consumers of technology from abusive litigation, as well as language to provide needed transparency in the patent system."
It isn't just an issue for Silicon Valley stalwarts. According to a study by Robin Feldman, a professor of innovation law at the University of California's Hastings College of the Law, 1 in 3 startup companies and 70 percent of venture capitalists are hit with patent challenges, many of them bogus.
Patent trolls acquire strategic patents from small companies and then start looking around for other companies to sue for using the technology. The average legal cost of fighting a patent challenge for a small firm is about $500,000, which can be devastating. Most are forced to settle, even when they know the challenge is bogus.
When companies are spending time and money responding to patent challenges, they're not inventing or hiring.
President Barack Obama has said he's eager to sign patent legislation. He mentioned it in his most recent State of the Union address. Feinstein should join Lofgren and help lead the charge to put patent trolls out of business.
mercurynews.com |
