North Carolina Department of Justice
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Congress should act on patent trolls, AG Cooper says

Release date: 2/24/2014

But legislation must not stifle innovation, prevent state consumer protections

Raleigh: Consumers and businesses need protection from so-called patent trolls that try to charge them high fees for using everyday office equipment, Attorney General Roy Cooper said Monday.

Patent trolls don’t invent or manufacture anything, but instead acquire patents and then make questionable claims of patent infringement to extract fees.  

Cooper joined 42 other state attorneys general today to send a letter to the ranking members of the Senate Judiciary and Commerce, Science and Transportation Committees, calling for federal legislation to address patent trolls.

“Patent trolls stifle innovation and harm our economy by making dubious claims of patent infringement and using the threat of expensive litigation to extort money from small businesses and nonprofits,” the attorneys general wrote in their letter. “We’re getting complaints about this misuse of the patent system.”

Senate Bill 1720, and the related H.R. 3309 which recently passed the House, would require greater clarity in patent demand letters and reform patent litigation to help limit the power of patent trolls. 

Cooper and the other state attorneys general want to make sure that any federal legislation to tackle patent trolls does not hamper innovation or undermine existing state authority to enforce state laws against consumer protection and unfair trade practices.

“We need laws that attack the problem of patent trolls without weakening the patent laws in ways that could hamper innovation and research,” Cooper said.  “It’s also critical that states be able to move quickly to enforce their own laws to protect consumers and businesses without having to wait on Washington.”

Consumers, small businesses and non-profit agencies are targeted by patent trolls because they purchase and use off-the-shelf commercial products that rely on common technology such as printers, scanners or wireless routers.  Patent trolls are often successful at getting victims to pay them because defending complex patent lawsuits can be expensive.  Cooper is reviewing state consumer protection laws to see if further strengthening would help fight patent trolls.

Cooper’s Consumer Protection Division is currently investigating a possible patent troll based on complaints from North Carolina small business owners.  Cooper recently spoke about patent trolls to in-house attorneys from major companies including Google, Cisco and Amazon at a conference hosted by SAS in Cary. 

In addition, the Federal Trade Commission has announced plans to conduct a wide-ranging national investigation of known patent trolls, also known as patent assertion entities (PAEs).  Cooper and the other attorneys general have previously asked the FTC to share with them information it gathers through its probe.  

Contact: Noelle Talley (919) 716-6413