SIIA today called on congressional leaders to enact legislation that provides more safeguards to prevent the economic and consumer harm caused by abusive patent lawsuits. In a letter sent to the Congressional leaders who led the passage of patent reform last year, SIIA joined with several other trade associations in issuing a call for action against the abusive patent lawsuits.

Abusive patent lawsuits from patent trolls are a tremendous blight innovation and entrepreneurship in our country. With The America Invents Act, Congress took an effective first step in addressing the problem of abusive patent litigation by trolls. Despite this important initial effort, patent trolls continue to damage the economy, hurt America’s tech industry, and threaten innovation. We’re calling on Congress to continue its work on this vital issue by enacting legislation that protects legitimate companies and innovators from misuse of the patent system.

SIIA has outlined a specific proposal, which was articulated in the joint letter to congressional leaders, for legislation that would help address this problem. Under today’s system, the patent troll business model is to make litigation as expensive and disruptive as possible, forcing legitimate and law-abiding companies to settle regardless of the merits of the case. The troll requests millions of documents through the discovery process–much of which is entirely irrelevant to the suit.  Because the patent troll has few, if any, documents to produce in discovery, they can do this with impunity.

The point of the troll’s action is not to achieve legal justice, but simply to  place an enormous burden on legitimate companies and give them little choice but to settle the case. SIIA’s proposed legislation would address this imbalance by shifting the discovery burden to the patent troll for any information over and above the core documentation that is essential to the merits of the case. By doing so, SIIA’s proposal will help protect legitimate companies from being bullied into settlements when patent trolls request millions of documents that are not actually needed in a patent lawsuit.

This proposal will disrupt a damaging and expensive litigation tactic: the abusive use of discovery to drive up litigation costs for the purpose of forcing settlements. Meanwhile, it will do nothing to curtail the rights of legitimate patent holders that are seeking to have their day in court.

Ken Wasch is President of SIIA.

Yesterday President Obama signed into law a bill that would reauthorize the Federal Trade Commission’s authority to clamp down on cross-border fraud, providing greater assurances for US customers and business who want to shop, transact and earn a living on the Internet. The measure was spearheaded by Commerce, Manufacturing, and Trade Subcommittee Chairman Mary Bono Mack (R-CA), who is retiring. The bill, the U.S. Safe Web Act, allows the FTC to share information about cross-border online fraud with foreign law enforcement authorities and cooperate with them in tracking down and eliminating Internet scam artists.

At a time when many lament that partisan gridlock seems to prevent the enactment of good public policy, this bi-partisan reaffirmation of the FTC’s authority to go after cross-border crooks is a welcome sign that our policymaking institutions can still produce sensible policies that protect the public.

This law was first adopted in 2006 and has been an effective tool to combat cross-border spam, spyware and fraud. Fraudsters do not recognize national borders, and law enforcement efforts must be similarly global. Effective international cooperation on law enforcement investigations is crucial for providing consumers and businesses with the trust and confidence with each other online.
Hugh Stevenson, Deputy Director for International Consumer Protection at the Federal Trade Commission, has been leading FTC efforts to use the authority in this law to combat Internet scams, fraudulent telemarketing, spam, spyware, and other cross-border misconduct that harms US consumers. In his testimony in front of the Energy and Commerce Committee in July, he made it clear that reauthorization was needed to allow the FTC “to continue its current cross-border enforcement efforts and deal with new threats to U.S. consumers emanating from a growing number of jurisdictions.”

The Congress agreed and the legislation received bi-partisan support all the way through the process. The House approved the measure by voice vote on September 11 and the Senate followed suit and passed the measure on November 14. The President signed it on December 4.