NACS Joins Coalition Supporting Patent Reform

Diverse coalition of tech, retail and business giants working to end patent troll abuse.

January 16, 2015

WASHINGTON – NACS has joined with more than 20 of the diverse groups, industries and companies supporting patent reform over the last decade to announce the formation of United for Patent Reform, a coalition united around a set of core principals aimed at reining in the abuses patent trolls wreak on businesses, job growth, innovation and our economy.

Despite passage of the America Invents Act and several recent positive rulings from the Supreme Court, abuse of our patent system continues unabated. United for Patent Reform does not intend to achieve incremental victories or invalidate specific types of patents, but to take back a patent system increasingly held hostage by patent trolls and return it to its original purpose: fostering innovation and investment that benefits the entire American economy.

Yesterday, the coalition sent a letter to leaders in Congress and members of the Judiciary Committees in the U.S. House and Senate outlining the principles strong patent reform legislation should include.

With today’s announcement, United for Patent Reform becomes the preeminent national voice for the strongest possible patent litigation reform legislation. Along with founding member NACS, its members include the National Retail Federation, the American Hotel and Lodging Association, the National Association of Realtors, the National Restaurant Association, the National Association of Home Builders, the Coalition for Patent Fairness and many of its member companies, Google, Oracle, Cisco, Verizon, Salesforce.com, Adobe, Intuit and Dell — as well as JCPenney, SAS, the Retail Industry Leaders Association, Macy’s, Facebook, the Food Marketing Institute, Amazon, and the National Association of Chain Restaurants.

Part of the new coalition’s strength comes from the collective commitment in supporting the following seven legislative measures:

  1.  Reform Abusive Demand Letters: Require that patent demand letters include truthful, basic information. Patent trolls send vague and deceptive letters alleging patent infringement to demand unjustified payments from innocent individuals and businesses. Vague demand letters should not be used to bully innocent businesses into paying what amounts to protection money.
  2. Make Trolls Explain Their Claims: Require patent owners to explain in detail the basis for the alleged infringement when they file a complaint. Current law does not require that a patent holder explain how a patent is infringed, or even identify the product involved, which makes it nearly impossible for someone who has been sued to evaluate the case and decide how to proceed.
  3. Protect Innocent Customers: Ensure that claims between a patent owner and a manufacturer proceed before claims between the patent owner and the manufacturer’s end users. Under current law, anyone can be sued for infringement for simply using a product, system or method. We don’t want to change that. Instead, it simply makes sense for cases against end users to be stayed in favor of cases involving the manufacturer.
  4. Make Patent Litigation More Efficient: Make patent litigation more efficient so that weak cases can be dismissed before expensive discovery. Requiring patentees to explain and judges to decide what a patent means at the beginning of a case narrows the case to the actual legal issues in question, drives early resolutions, and avoids unnecessary and expensive discovery.
  5. Stop Discovery Abuses: Require trolls to pay for the discovery they request beyond core documents so that they cannot run up costs just to force a settlement. Since trolls don’t actually make or create anything, they have few documents to produce and no incentive to be reasonable in their discovery requests. Making trolls responsible for the costs of their discovery requests that go beyond the core documents needed to decide most patent issues will stop unreasonable demands made for negotiation leverage.
  6. Make Abusive Trolls Pay: Require that a losing party who brings a frivolous case pay the other side’s attorney’s fees — and make sure the troll can pay. Trolls currently have few barriers to litigation with no significant costs. A stronger presumptive fee-shifting statute and a mechanism to ensure court ordered fee shifting is enforceable will deter nuisance suits.
  7. Provide Less Expensive Alternatives: Maintain and improve administrative alternatives to litigation. Ensuring access to efficient and fair mechanisms to re-examine questionable patents, by among other things not watering down the PTO’s existing standards, will reduce litigation abuses and strengthen the patent system.

For more information, visit www.unitedforpatentreform.com.

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