Patent as generator of wealth image via Shutterstock.
A push for legislation cracking down on so-called “patent trolls” is gathering steam on Capitol Hill, potentially spelling relief for many businesses, including those in the real estate industry.
Last week, Rep. Hakeem Jeffries, D-N.Y., introduced the “Patent Litigation and Innovation Act of 2013″ (H.R. 2639) in the House, which is related to the “Patent Abuse Reduction Act of 2013″ (S. 1013) introduced by Sen. John Cornyn, R-Texas, in May.
The White House has also issued a series of legislative recommendations and executive actions to tackle the issue. The executive actions will require patent applicants and owners to disclose the true owner of a patent, train patent examiners to flag overly broad patent applications, and offer a website educating consumers and small-business owners about what to do if they are targeted, among other things.
Federal Trade Commission Chairwoman Edith Ramirez last month urged the commission to use its authority to collect more comprehensive information about the business models and scope of “patent assertion entities” — the formal name given to companies that are focused primarily on purchasing and asserting patent claims against companies with products currently on the market.
“These entities are driving the increase in patent litigation and targeting firms in a growing slice of the economy,” Ramirez said. Patent trolls have moved beyond their original primary targets — information technology firms — and are going after financial services providers and retailers, she said.
“Even hotels and coffee shops are not immune,” Ramirez said, and the costs to consumers “appear increasingly tangible and direct.”
While inventors and other patent holders must sometimes resort to lawsuits to protect legitimate patents, critics say patent trolls take advantage of broadly written patents, do not create their own products, and stifle innovation among other companies by tying them up in costly lawsuits.
The National Association of Realtors today signed on to a letter to congressional leaders urging them to address “patent abuse” and expressing support for legislation proposed or introduced by members of Congress as well as the White House.
NAR was one of 50 organizations to sign the letter, which included groups representing automobile manufacturers, bankers, grocers, software developers, hoteliers, retailers and restauranteurs, among others.
The organizations said there is a “growing consensus” that the issue of patent trolls should be addressed now and said they were “pleased” and “encouraged” by recent legislation efforts, including a bipartisan proposal from House Judiciary Committee Chairman Bob Goodlatte, R-Va., and his Senate counterpart, Patrick Leahy, D-Vt.
In 2011, NAR negotiated a blanket licensing agreement with CIVIX-DDI LLC, a company that holds several patents on location-based Internet search techniques, after the company filed patent infringement lawsuits against two of the nation’s largest multiple listing services and demanded licensing fees from several others.
NAR paid CIVIX a total of $7.5 million that it collected from Realtor associations, MLSs and MLS vendors to pay for a blanket licensing agreement that applied to the industry as a whole.
NAR, realtor.com operator Move Inc. and the National Association of Home Builders are still litigating a suit filed in 2007 by Real Estate Alliance Ltd. (REAL), which claims NAR and dozens of other real estate companies, brokers and agents violated its mapping technology patents.
Recently, NAR also warned its members about a company called MPHJ Technology Investments Inc., which claimed to have the exclusive right to send documents via email from a multifunction copier machine, and sent thousands of letters to brokerages and other companies demanding licensing fees of $900 to $1,200 per employee.
The company has since said it will no longer continue its enforcement activities, in part because of claims that have been filed with the U.S. Patent and Trademark Office challenging the scope of the company’s patents, according to NAR.