I live and work in Eugene, Oregon. We have a small but vibrant software industry here, and along with other software companies up in Portland we are collectively making an Oregonian dent in the universe.
A problem that costs real jobs
Two years ago our local congressman, Peter DeFazio, visited a software company in Eugene, Oregon and learned the company had been attacked by a patent troll. Patent trolls are entities that abuse the patent system by threatening hundreds of small businesses with legal action without even checking if products truly infringe on a patent. Most of the target companies end up paying the “license” fee rather than going through a lengthy and expensive litigation process, even if the patent doesn’t even remotely apply to their products.
The company visited by Rep. DeFazio wanted to hire more developers but concerns about potential patent litigation forced them postpone the hiring process. It became painfully obvious that patent trolls are not just a problem for big companies but that small businesses are especially vulnerable too. In this case the problem of patent trolls was costing real jobs.
The solution: give patent trolls a downside
DeFazio went back to DC and came up with a very simple, surgical solution to minimize the havoc caused by these abusers of the patent system: Disincentivize trolls by empowering judges to make plaintiffs liable for the legal expenses of the defendants if the suit had no realistic chance of winning.
That will make a patent troll will think twice before adding a company to the list of parties to sue: if the court finds the developer did not infringe, the court can order the troll to pay for the legal expenses of the developer. OR if a court finds the plaintiff is a troll, they can require them to pay a bond that will be used to pay for the legal expenses of the developer if the developer wins.
Proud to be part of the solution
In May of last year, ACT Members — app developers and software entrepreneurs from all over the country — were flying into Washington DC for our annual ACT Policy Summit. We spent the first day on policy discussions and explorations. The next day we shared our real-world experience with tech policy in over one hundred meetings with policy makers on Capitol Hill.
During one of these meetings I met with Rep. DeFazio along with two of my friends and colleagues: one was part of a brand new, fast growing software company in Eugene, and another had just received a threat by a patent troll. Needless to say, it was a very productive meeting with lots of sharing of both specifics and personal experiences. We were all very encouraged and proud that Rep. DeFazio had decided to tackle a problem that was important to us.
The initial version of the SHIELD Act was introduced a few months later, in August 2012 as a bipartisan bill that was co-sponsored by Rep. Jason Chaffetz. The legislative process often moves in slow and mysterious ways: while the bill didn’t get an immediate vote, we were optimistic that Congress would eventually address the patent troll problem. I met with Congressman DeFazio again in Eugene during the congressional recess and shared (overwhelmingly positive) feedback on the bill from ACT members. Over time, the SHIELD Act was fine-tuned and support for the bill has grown across the industry.
A few days ago, Rep. Peter DeFazio and Rep. Jason Chaffetz introduced the new version of the SHIELD Act. The bill is receiving widespread industry support and positive reactions. We’re excited about this simple and creative approach to address a complex problem that too many of ACT member companies have faced first-hand. Please let your member of Congress know that you support this bill.