Guest Opinion: Patent trolls are hurting Iowa
Friday, April 25, 2014 7:00 AM
Iowa is no stranger to innovation.
Tej Dhawan & Christian Renaud
Principals at StartupCity Des Moines
Our history is filled with those who have innovated in areas of agriculture, manufacturing, biosciences, and medicine and even our nascent tech startup community.
StartupCity Des Moines is home to several young companies, IC Co-Lab and Vault Co-working are growing in the Iowa City-Cedar Rapids corridor, and numerous locations around the state from Sioux City to Dubuque, Davenport to Spencer, have spawned their own homes for startups.
Similarly, industry associations for manufacturing, agriculture and bioscience research support the researchers and innovators from our cities to rural laboratories.
The innovation economy is robust and growing in our companies, colleges and even K-12 schools.
Since its passage in the U.S. House, the Innovation Act has been given low probability of success in the Senate. We are writing in support of comprehensive legislation to address the unfortunate growth and continuing success of the patent troll business model.
Although patent trolls may make waves on the coasts, their exploitive reach has crept into Iowa and affects household names such as Hy-Vee Inc. and Kum & Go LLC as well as Iowa-based startups such as Betterlife and ClickStop.
Our patent system has created extraordinary value for America by promoting innovation, but patent trolls do not innovate, produce goods or offer legitimate services.
Trolls buy old, inexpensive patents associated with bankrupt companies or shelved technologies, and often the patents are vague and overbroad business method patents that never should have been approved.
In the hands of trolls, these patents are weapons that scare companies into settling and paying unjustified royalties because the cost of patent litigation averages more than $2 million.
We urge Sen. Grassley, in his role as the ranking member of the Judiciary Committee, to ensure passage of patent reform legislation that:
• Reduces expensive litigation by allowing more poor-quality patents to be challenged administratively at the Patent and Trademark Office.
• Requires patent demand letters to specify which patent and which claims are infringed, and precisely how the offending technology is infringing.
• Requires trolls to pay defendants’ legal fees when the troll loses in court.
• Protects consumers and small businesses against infringement claims when they are simply using software (such as Wi-Fi at coffeehouses) and hardware (scanners and fax machines) that others produce and provide.
Iowa’s high-tech economy is as veteran as anywhere else in the industry and has extraordinary growth potential.
Innovators from computer pioneer John Atanasoff or Gary Vermeer to present-day researchers continue to develop technologies that are used worldwide.
The Senate needs to join the House and the president to help Iowa innovators grow by limiting the spread of patent trolls in Iowa by enacting strong, comprehensive patent litigation reform legislation.
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