If Congress needs another reason to act on the Protecting American Talent and Entrepreneurship (PATENT) Act before the end of the year, perhaps we could introduce our legislators to Michael Skelps.
Michael Skelps is the general manager of Capstone Photography, a Connecticut business that created a system of making photography from sporting events available to athletes.
It was a successful small business that employed five full-time people around three years ago, when Skelps received a letter claiming that Capstone had infringed on somebody else's patent and threatening a lawsuit.
Capstone appeared to have been the victim of patent trolls. A patent troll, according to Wikipedia, is a person or company that attempts to enforce patent rights beyond a patent's actual value. Sometimes trolls buy up vague patents and, with no intention of ever using them, go after businesses that provide services that are at least vaguely similar to what their overly-broad patent defines.
Many people confronted with a patent troll will try to work out a deal to buy off the troll. Capstone decided to go to court instead.
Capstone won in court, with a federal judge invalidating the three patents that were used to go after the small photography company. But during the process, Capstone endured ten months of legal wrangling, incurred a legal bill of $100,000, and had to reduce its staff to to three part-time employees. It could have been worse: some businesses end up out a million dollars if they challenge a patent troll.
Skelps writes at Breitbart:
I am a strong supporter of the intellectual property system and believe it should be robust in protecting against genuine innovation being stolen. However, our current patent system is ripe for exploitation. Like the abusive patent litigation we endured, malicious actors are abusing the system and using it as a weapon against legitimate businesses, harming innovation, driving small companies out of business, and overtaxing our already overburdened litigation system.
Abusive patent litigation is happening in high volume, affecting both large and small businesses. Patent trolls operate in the shadows and use overly broad patents as tools of intimidation. For most companies, it’s cheaper to settle out of court rather than go through the expensive process of litigation. But without legal challenge, trolls can never be stopped. This is a problem that costs our economy billions of dollars every year, with estimates ranging from $29 to $80 billion a year. That’s money that could be invested in innovation, job growth and new technologies.
We believe in private property rights–and that includes intellectual property.
A well-crafted patent law would protect both genuine property rights and would also protect businesses from being scammed by trolls.