Sidney VanNess
Last Thursday, Kentucky became the latest battleground in the fight against patent trolls. Testimony was heard regarding SB116, the full text of which can be seen here. The legislation was co-sponsored by Sen. Chris McDaniel (R-Taylor Mill, @KyChrisMcDaniel) and Judiciary Chairman Sen. Whitney Westerfield (R-Hopkinsville, @KyWhitney). Fark.com CEO Drew Curtis (@DrewCurtis) and I (@sidneyvanness) were invited to testify about the merits of this bill, which will protect the economic interests of high growth businesses in Kentucky. SB116 was warmly received, with the 11 member Senate Judiciary Committee voting unanimously to advance the bill. The bill now moves to the full Senate and could be heard as early as this week.
Patent trolls, also known as “non-practicing entities” (NPEs) in the intellectual property field, are corporations created purely for the purpose of initiating patent infringement lawsuits. As their name implies, NPEs do not actually use patents to protect inventions they—or anyone else—are commercializing. They are vampires.
Patent trolls tend to follow the same pattern:
• They acquire the rights to patents—frequently in bulk—that often have little or no actual commercial value.
• They target, and send non-specific demand letters to small businesses that have little ability to finance a protracted legal battle.
• If they are unable to extract a quick settlement, NPEs often sue in the Eastern District of Texas, widely considered the most troll-friendly court in the country.
• Though the small business is rarely in violation of any portion of the troll’s patent portfolio, the small business determines that it is impossible to finance a multi-million patent battle and settles, even though not at fault.