ACT, the largest association of startups and mobile app companies, praised today’s congressional action to protect small business innovation from predatory patent litigation.
Today’s House Judiciary Committee passage of the Innovation Act addresses the growing threat of patent trolls. These entities threaten small technology companies with patent litigation without identifying the patent holder or what patent was allegedly infringed. Small businesses find it less expensive and burdensome to pay several thousand dollars for a license fee instead of challenging these often meritless claims in court.
“There is a serious problem when startups and small tech companies have no choice but to pay huge attorney’s fees or licensing fees without any evidence of wrongdoing,” said ACT President Jonathan Zuck. “Something must be done about patent trolls that send thousands of spurious claims at a time targeting small businesses that lack the resources to fight back.”
Today’s action was a victory for the innovation economy, but hopes were almost dashed when a controversial provision threatened to sink the bill. At the eleventh hour, the bill’s authors dropped the “covered business method” provision that would have exposed startups and small businesses to even more litigation.
“Today’s Committee passage of the Innovation Act helps entrepreneurs fight back against patent trolls,” continued Zuck. “Thankfully, the right decision was made to drop the covered business method provisions that would have given patent trolls added opportunity to heap legal fees on small businesses. Requiring more transparency and forcing litigants of meritless claims to pay opposing counsel’s fees is urgently needed. We applaud today’s Congressional action that brings us closer to enacting those provisions into law.”
ACT members sent this correspondence to the Judiciary Committee Chairman to convey support for the bill after the removal of the covered business method provision.
Today’s Judiciary Committee vote on H.R. 3309, the Innovation Act, was 33-5. The bill now heads to the House Floor for further action.