Patent Reform Advocates Take Efforts Beyond the Beltway

The campaign oversimplifies the patent assertion issue into a “good guys versus bad guys” picture, said Russ Merbeth, chief policy counsel for Intellectual Ventures, which critics describe as a patent troll. Merbeth said the campaign was a way to make the problem seem bigger than it is, and that the campaign’s objectives might not help the small businesses it’s targeting. Other PAEs and their allies we asked for comment about the campaign didn’t respond.

In an effort to raise awareness about PAEs among small businesses outside Washington and outside the technology industry, the Internet Association (IA), National Retail Federation (NRF), National Restaurant Association (NRA) and Food Marketing Institute (FMI) began a campaign in Illinois, Iowa, Nevada, Ohio, Texas, Vermont, Virginia and other states to encourage voters to call on Congress to “stop bad patents and stop the trolls,” the groups said, referring to PAEs (CD Aug 30 p12). An associated website advertised in the group’s print and radio ads, stopbadpatents.com, lets users share how they have been affected by PAEs. “Victims of these patent troll suits [are in] every single town across this country, in every industry, and that’s the story we want to tell,” said President Michael Beckerman of the IA, with members including AOL, Amazon and eBay, in an interview. “We want to make sure small businesses speak up and talk to their member of Congress."

The groups chose to target specific states and congressional districts where they might make inroads with key members of the House and Senate Judiciary committees with jurisdiction on the topic, said Beckerman. “During the August recess and over Labor Day, all members of Congress are home and talking to constituents and starting to hear about” PAEs, he said. Members of both committees have introduced legislation this Congress to address the issue. House Judiciary Chairman Bob Goodlatte, R-Va., and Senate Judiciary Chairman Patrick Leahy, D-Vt., are both expected to release legislation on the topic this fall (CD Aug 23 p9). Aides in both chambers said the committees would take up the issue as early as within several months.

Taking patent issues to voters beyond the Beltway is a new strategy, industry stakeholders and patent reform advocates told us. The seven-year fight over the America Invents Act (AIA) was fought mostly between big companies that focused on ads in D.C. newspapers like Politico and Roll Call, said Executive Director Todd Dickinson of the American Intellectual Property Law Association, a group of intellectual property lawyers that opposes PAEs, in an interview. Computer and Communications Industry Association Vice President-Government Relations Cathy Sloan “really” doubts “that this grassroots campaign is going to teach the masses all the arcane intricacies of complex patent law,” said Sloan, whose group represents Dish Network, Facebook, Google, Microsoft, T-Mobile, Yahoo and other technology companies. “All they're going to do is say, ‘Oh, you heard about that business that’s spending all their money on litigation defense? That’s this problem.'” Dickinson isn’t “sure this is the kind of thing that would necessarily move everyday voters,” he said. “But this certainly has caught the attention of small businesses, and other businesses in probably every congressional district who have been sent these demand letters” by PAEs seeking to enforce their IP rights, he continued.

The campaign has targeted those small businesses much more than everyday voters, said Beckerman and General Counsel Mallory Duncan of NRF, representing online and brick-and-mortar retailers as well as chain restaurants. “We don’t really expect that the average person on the street is going to become a patent expert,” Duncan said. “But there are people out there who are opinion leaders, people at the Chamber of Commerce and elsewhere, who if they understand it’s a serious issue, are much more inclined to do something about it.”

Sloan said patent litigation reform was more suited to a grassroots campaign than the AIA or another patent issue, since it had more direct impact on smaller companies. “There is a whole new level of interest beyond the Beltway, because of the number of victims of this abusive litigation that there now are,” she Sloan. “The AIA had more to do with different things the [U.S. Patent and Trademark Office] could and should do, and that’s all well and good, but now there’s a clearer focus on the litigation abuse, which is a different dimension of the problem.” Beckerman agreed the issue was especially well-suited for a grassroots effort. “This has been a silent problem,” he said. “But there are businesses that are not in the tech world at all that got these letters, silently suffered through it, and didn’t know they could talk to anybody about it. They didn’t know the size or the magnitude of the problem. The more that we run these campaigns, the more people feel like they can raise their hand, talk about it, reach out to us and tell us their story.”

The Application Developers Alliance has been involved in a similar grassroots effort targeting the same issue this summer, ADA President Jon Potter told us. Its campaign targeted large cities with an existing awareness of the issue, rather than specific congressional districts, he said, but taking patent issues outside the Beltway wasn’t difficult. “This is a complicated issue if you take it from the beginning,” he said. “But people understand out there patent trolls are killing innovative companies, killing small companies, distracting folks and inhibiting investment. ... Channeling that energy has not been terribly difficult. Sometimes it is hard to persuade someone that they can have an impact,” but that’s why ADA is working to raise awareness and talk about how to fight back, he said. ADA’s campaign, which began earlier this summer, has already had an impact on Capitol Hill, said Potter. “We've heard from people on the Hill that our member companies were the first to bring this to their attention that this was a small business issue."

Grassroots campaigns targeting PAEs are “especially important, because we're seeing more and more end-users being sued for patent infringement by trolls,” said Adi Kamdar, an Electronic Frontier Foundation staff activist working on patent reform issues. PAE-initiated lawsuits are becoming “more than just a siloed issue,” Kamdar told us, noting that a recent study from the Santa Clara University School of Law showed six of the top 10 PAEs are now targeting end-users who may simply be using technology like Wi-Fi or scanners (http://bit.ly/139QY5T). “This just goes to show that it’s an issue that individuals have to deal with.” EFF plans to continue expanding its existing awareness campaign on PAEs, including its sponsorship of the recently begun “Trolling Effects” website, which collects and publishes demand letters sent out by “patent trolls” (CD Aug 7 p16). “We're hoping that by aggregating these letters and showing what tools these entities are using, that people can get behind reform,” Kamdar said. “People who didn’t think they were affected can realize this is a much broader problem.” EFF also hopes to “re-launch” its efforts to support patent reform legislation on the Hill as Congress gets ready to reconvene next week, and will “particularly push for support” of bills that explicitly protect end-users, he said.

Duncan said it was too soon to tell whether the IA, NRA, NRF and FMI campaign had an impact on the Hill. Aides in both chambers said they already hear a lot about PAEs from constituents -- especially larger businesses and associations, and increasingly from smaller constituents. Goodlatte has been receiving comments on the subject since May, when he released a discussion draft of legislation to address the issue, said a House Judiciary aide.

This campaign is “a page straight out of the lobbying playbook,” said Merbeth of Intellectual Ventures. “This is the kind of activity that big players take when there’s an issue that honestly is relatively small, but they want to make it look bigger. It’s an expensive way to do it, but it can be effective.” Merbeth said the associations want to attach themselves to something that could gain traction in an otherwise gridlocked Congress, and they saw an opportunity in patent reform.

The IA, NRA, NRF and FMI campaign is “trying to make it look relatively simple,” Merbeth said. “They're painting cartoon bad guys as being out to hurt good guys -- regional businesses, Internet players, things like that. To get traction outside the Beltway, and even sometimes inside the Beltway, on a complicated issue, you have to oversimplify it to get people to do anything about it.” The campaign was a “pretty crude characterization,” and based on outdated data about the issue, he said. That’s exemplified in a recent GAO report (CD Aug 23 p9) that tied an increase in patent litigation not only to PAEs, but also to provisions in the AIA that require separate suits even on the same patent, Merbeth said. “You have to really get to the point of cartoon villains to make any kind of point here, because the data doesn’t really support the campaign, and the legislative solutions that have been proposed aren’t going to prevent litigation, they're just going to drive up the cost of maintaining and getting patents.” Increased costs for patents will hurt small, regional businesses in mainstream America much more than it will big firms, he said.