Someone PLEASE stop patent trolls' stroking their favorite tool, cries Google and friends

US trade watchdog ITC needs reform to end $bn blackmail


A consortium of tech giants have written to senior US politicians demanding a reform of the International Trade Commission, one of America's key federal watchdogs.

The biz goliaths, represented by the ITC Working Group, claim patent trolls are unfairly using the commission to extract money from their coffers, and hamper innovation.

The letter – signed by Google, Intel, Apple, Cisco, and 16 others – takes issue with Section 337 of the Tariff Act of 1930: this piece of law is routinely used by patent-hoarding trolls – or non-practicing entities (NPE) to use the polite term – to block or threaten to block the sales of products they don't like.

The trolls use Section 337 to demand from the ITC injunctions banning the importation of products into the US that allegedly infringe patents held by the trolls. The NPEs' ultimate goal is to extract money from the manufacturers.

"Since NPEs make no products, let alone competing products, they do not actually benefit from the remedy afforded at the ITC an exclusion order against products that infringe US patents," the letter, seen by The Register, notes.

"NPEs are simply using the threat or fact of an exclusion order to extract a monetary payment, thus a monetary award is sufficient to provide relief. A product exclusion order issued in favor of an NPE simply serves to penalize companies who invest and successfully bring products to market in the United States."

It sounds rich hearing Intel, Apple, Cisco and others complaining – of all people – about organizations being outrageously litigious with patents. The tech world loves using patents to destroy upstarts or force them into an acquihire deal. Their beef appears to be that patent trolls don't actually make or design anything, as if they are unworthy opponents.

It has been 21 years since last time Section 337 was amended, and the world is a very different place now. Patents, particularly in the software field, are big business, and – unfortunately – so is trolling. A study by Boston University found patent trolls cost US businesses $29bn in 2011, and the problem is only getting bigger.

The consortium recommends that US Congress instructs the ITC to "consider all relevant public interest factors" in future cases.

There are multiple bills before US Congress at the moment designed to deal with the patent troll issue, but the chamber seems more interested in legislation to defund Obamacare than doing something that could deal with NPEs. The Federal Trade Commission promised to investigate the issue back in 2012, but there's been nothing concrete yet.

"We think there's chance for legislation in this area, given the overarching patent debate. The likelihood of legislation in this area is high," ITC Working Group executive director Matt Tanielian told The Register.

"The ITC has the flexibility and the opportunity to use its public interest authority and Congress, as the policy making body, is the one who is charged with ensuring the public interest is carried out. When Congress tells an agency to use its public interest authority that matters." ®


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