Removal of Covered Business Method Patent Expansion From The Innovation Act A Disappointment

i2Coalition appreciates Chairman Goodlatte’s leadership on patent reform;
Covered Business Method patent expansion still needed

Washington, DC – According to a recent study by the Government Accountability Office (GAO), Patent Assertion Entities, or “patent trolls,” cost defendants and licensees a staggering $29 billion in 2011. While The Innovation Act takes steps to address many of the issues concerning patent trolls, the removal of the Covered Business Method (CBM) patent expansion and changes which impact other patent review programs (such as Post-Grant Review) are a disappointment.

“Unfortunately, Chairman Goodlatte’s decision to strike portions of the bill that would allow companies being sued for infringing on software patents to challenge those claims would still leave some companies vulnerable to further abuse from patent trolls,” said Dawson. “i2Coalition looks forward to working with members of Congress on expansion of the Covered Business Method patent review and to ensure that our members continue to have a seat at the table when it comes to discussing changes to our patent system.”

The Innovation Act will reform the patent system in a way that makes it harder for patent trolls to hide their identities while insisting that they provide specific information about the suspected infringement and become responsible for the legal costs of their targets when they lose, helping to stop the extortionist behavior of patent trolls. As originally proposed, the bill would make it easier for companies to challenge dubious patents without resorting to expensive and protracted litigation in the judicial system.

Small to medium sized businesses like many of those that make up i2Coalition are particularly vulnerable to the malicious tactics of these trolls and have borne the brunt of PAEs’ efforts, making up 90% of defendants sued by PAEs and bearing 37% of the aggregate costs from 2005-2011.

“Patent trolls represent a clear threat to American innovation, and we applaud Chairman Goodlatte for his leadership on an issue that is hurting legitimate Internet companies across the country,” said Christian Dawson, i2Coalition Co-Founder and Board Chair. “Chairman Goodelatte’s bill contains a number of provisions that would arm the victims of these frivolous lawsuits with the tools they need to fight back against the trolls.”

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