Archive

ShareThis Page
‘Patent trolls’ draw congressional concern | TribLIVE.com
U.S./World

‘Patent trolls’ draw congressional concern

The Associated Press
PatentTrollsJPEG04044
Life360 co-founder and president Alex Haro, at his company headquarters in San Francisco on Tuesday, April 14, 2015, says some kind of patent-reform legislation is necessary. “It shouldn’t be so expensive to defend yourself from a completely meritless lawsuit,” he said.

WASHINGTON — The same week that Alex Haro and Chris Hulls raised $50 million for their mobile app, Life360, the business partners got a letter. It said they had three days to pay licensing fees to a company they had never heard of because their app violated its patented technology.

Haro and Hulls traced the company, Advanced Ground Information Systems, to a coastal home in Jupiter, Fla., with a phone number that initially went to an anonymous voicemail. They couldn’t find any employees on LinkedIn. To Haro, it was “a punch in the gut,” he said.

On the other side of that letter was Malcolm “Cap” Beyer Jr., a 76-year-old who had filed patents a decade ago on cellphone mapping. He said his attorney told him that he had a strong case against the startup, even though the general technology had been widely used for years. Beyer insists the mobile app’s $50 million in fundraising had nothing to do with it.

In the end, a jury sided with Life360 on all counts — but not before Haro and Hulls shelled out nearly $1.5 million in legal fees.

Congress is expected to take up legislation this year that would make it tougher for people like Beyer to claim patent infringement, and make them pay legal costs if they lose. The bill has become a top lobbying priority for the tech industry, which says it repeatedly fends off frivolous lawsuits because of poorly written software patents and laws that favor patent holders.

But lawmakers have repeatedly stumbled over the issue, which doesn’t fall neatly along party lines. America’s drugmakers, universities and trial lawyers claim that patents are the lifeblood of American invention and that the current bill goes too far.

On Tuesday, the House will pick up the issue again with a hearing of its Judiciary Committee. Among those testifying is Keven Kramer, Yahoo’s deputy legal counsel, who estimates the company has spent $100 million fighting bogus patent lawsuits since 2007.

“That’s money we could use elsewhere on research and development, people, jobs,” he said.

“Patent trolls” generally refer to businesses that buy up patents, particularly in technical areas like computer chips, cloud computing and wireless routers, with the sole intention of filing lawsuits or demanding licensing fees from tech companies, particularly startups around the time of their public offering.

Not wanting to pay for a protracted legal fight, the defendants almost always settle even if they think they’d win. Kramer calls it a vicious cycle — the more companies settle, the more lawsuits are filed.

“It’s like a legal version of a mob protection racket,” said Noah Theran, a spokesman for the Internet Association, a coalition of web-based companies. “The tactics are different, but the end result is a good, old-fashioned shakedown.”

Beyer said in a phone interview last week that he’s a defense contractor with more than a dozen employees, not “some vile animal that’s filing lawsuits” for sport.

“We are simply just trying to enforce our patent,” he said.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.