SUPPORT H.R. 9/S.1137; A310
The NJCPA joined United for Patent Reform, a national coalition of diverse businesses fighting to stop the abusive activities of “patent assertion entities” (PAEs), commonly referred to as “patent trolls.” PAEs are companies that use patents for the express purpose of filing patent infringement lawsuits against individuals or businesses to obtain licensing fees or a legal settlement rather than actually supporting or developing any products.
PAEs typically approach small- to medium-sized businesses alleging patent infringement through letters threatening litigation and demanding payment for licensing fees. Often, these entities create shell companies making it difficult for companies to know who is threatening them. Their targets have included CPA firms and state CPA societies.
The PAEs’ claims are made in bad faith and are based on overly broad patents related to common business practices and technologies. According to a 2013 report prepared by the President’s Council of Economic Advisers, the National Economic Council, and the Office of Science & Technology Policy, suits brought by PAEs have tripled in just the last two years, rising from 29 percent of all infringement suits to 62 percent of all infringement suits. Estimates suggest PAEs may have threatened over 100,000 companies with patent infringement in 2013 alone.
Instead of creating new jobs and investing in new technologies, businesses large and small across many industries—from national realty, construction, and technology businesses to Main Street retail shops, hotels, grocers, convenience stores, and restaurants—continue to be forced to divert scarce resources to fighting frivolous lawsuits and overly broad claims made by patent trolls.
Congress is pursuing a solution to this problem, with two bill pending (S. 1137 and H.R. 9). On a state level, more than 20 states have introduced legislation aimed at combating this abuse, including New Jersey (A310).