CES Panel Looks At Patent 'Troll' Issue
January 8, 2014 at 1:02 PM (PT)
The hot-button issue of "patent trolls" got attention at International CES in LAS VEGAS on WEDNESDAY (1/8), with a panel moderated by ARSTECHNICA's JOE MULLIN looking at the issue and legislative solutions.
After FTC Commissioner JULIE BRILL gave an overview of "Patent Assertion Entities" (PAEs, also derisively referred to as "patent trolls") and explained her agency's study-in-progress of the patent troll situation, TMSOFT CEO TODD MOORE told his story of getting a "patent troll" letter over a hyperlink in his white noise sleep app and a demand to pay to an overseas account (to avoid U.S. taxes), likening the trolls to the Mafia and noting that if one pays to settle a demand, other trolls will "line up" to file suit as well. IPNAV CEO ERICH SPANGENBERG represented the other side of the issue, asserting that there are abuses "on both sides" but agreeing that lawsuits should be resolved on a "loser pays" basis. He also called for shortening the time cycle for hearing and resolving suits to lower costs.
NEBRASKA Attorney General JON BRUNING told the story of a constituent, an elderly Alzheimer's patient, getting a troll letter, noted the expense of hiring a patent attorney to defend one's self, and asserted that state Attorneys General need to be active in helping businesspeople being attacked by trolls, adding, "If the AGs don't do it, who's gonna do it?" "These guys are thugs," BRUNING said of the trolls. "We are going to take them down."
ELECTRONIC FRONTIER FOUNDATION MARK CUBAN Chair to Eliminater Stupid Patents Sr. Staff Attorney JULIE SAMUELS said that "it doesn't matter what you call them, certain behavior is troll-y," including sending demand letters to small business and individuals. She added that "no one cared" when large companies were getting sued, but now, with individuals being sued, "it makes for good TV." With patent litigation, "there is a chilling effect on innovation," SAMUELS charged.
NEVADA RESORT ASSOCIATION President VIRGINIA VALENTINE voiced the concerns of the state's resort and casino industry, saying that while her members use technology as an essential part of their business, technology is not their core business and having to expend energy and resources on defending patents diverts funds and attention from the actual core businesses of gaming and hospitality.
RPX CEO JOHN A. AMSTER offered what he termed a market-based solution to the problem, buying patents to resolve litigation and then promising never to litigate the patents. And online electronics retailer NEWEGG General Counsel LEE CHENG discussed his company's loss of a $2.3 million patent case to SPANGENBERG's firm and policy of fighting patent suits. "We kind of don't get screwed anymore," CHENG said of the result of getting a reputation for fighting back.
BRUNING called for concurrent jurisdiction for the federal and state attorneys over patent litigation cases, while MOORE said that he and other software developers are being stifled to the extent that some are removing functionality and even internet access from apps due to fear of being sued. "It all starts with the demand letter," he added. "It's just stupid, and it's affecting my business... there's something wrong with this system."