The Retail Industry Leaders Association (RILA) issued the following statement in response to the White House plan to rein in the activities of patent trolls. Retailers have increasingly become ensnared by frivolous lawsuits brought by patent trolls filed with the singular intent of generating settlements.
“We welcome President Obama’s focus on this important issue. Increasingly, retailers are forced to defend themselves against infringement suits simply for using off-the-shelf products that incorporate patented technology,” said Bill Hughes, senior VP government affairs. “The prospect of costly litigation to resolve even the most dubious of claims enables patent trolls to generate settlements that neither reflect the intent of the law nor the actual value of their claims. Meaningful action must be taken to rein in this abusive practice.”
According to the National Retail Federation (NRF), retailers have seen an increasing number of patent lawsuits in recent years, and about 40% come from litigants known as “patent trolls.” The “trolls” are firms whose business model focuses on buying obscure patents for things they didn’t invent, then threatening to sue companies that use the technology involved unless they pay a licensing fee. The threats often involve technology or practices users don’t realize are patented, and aren’t clearly linked to the patent in question. Of cases that make it to trial, patent trolls lose more than 90% of the time. But the cost of defending against the claims is so high -- the average case costs $2 million and can take 18 months -- that many victims settle out of court. The cases cost legitimate businesses close to $30 billion a year.