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Patent Reform

Patent trolls are a menace to all legitimate businesses, whether they’ve been targeted already or not. Patent trolls are defined in many different ways, but are essentially companies that hold many broad technology-based patents—they do not manufacture anything, and the majority of their staffs are not engineers. Instead, patent trolls hire lawyers who write letters to companies demanding a licensing fee (also known as “demand letters”) under the threat of costly patent litigation. Patent trolls have been increasingly targeting small businesses and start-ups.

In the year 2011 alone, $29 billion was spent on patent trolls, and public companies lost $80 million in wealth. Their victims are increasingly outside the world of technology—hotels, retail, and restaurants. Patent troll litigation now makes up the majority of patent litigation in this country.

DMA recognizes that patent trolls pose a threat to almost all its members. At the same time, patent troll legislation could cut into legitimate practices used by our patent-holding members. As part of the Stop Patent Abuse Now (SPAN) coalition, with other trade associations, DMA is shaping the bipartisan discussion. Members of Congress want to protect constituents from “legalized extortion” without hindering the flow of innovation. DMA is uniquely situated to help Congress strike the right balance. Through SPAN, DMA is closely following the many bills now in front of Congress.