BOMA International supports meaningful reforms to curtail patent trolls from filing unwarranted, vague and frivolous lawsuits.
A patent troll is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question. Recently, there has been an explosion in the number of patent trolls, which use vague and overly broad patents, to extort payments from small business. Fighting a troll in court can cost hundreds of thousands or even millions of dollars.
The explosion of patent trolls is a significant issue to building owners and managers as well as their tenants. For example, these trolls have been known to threaten a suit against a building claiming software infringement on its use of video surveillance equipment. In addition, buildings and tenants that offer WiFi to guests are being targeted. One common troll tactic is to sue an entity offering WiFi access for hotspots in places such as lobbies, restaurants, atriums, and other common areas of buildings. Rather than suing the technology vendors (such as the manufacturer of the WiFi equipment), these trolls will sue the entity offering the service. Many of these small-business defendants are intimidated into paying regardless of the merits of a plaintiff's case. Other instances where patent trolls have inserted themselves in a real estate context include:
- The Multiple Listing Service, a critical tool for real estate agents that uses location-based search capabilities to identify homes and other properties available for sale or lease;
- Businesses that attach scanned documents to emails to execute contracts, closings, and other commonplace real estate transactions; and
- Home builders and their contractors who use obvious processes to ensure that wood construction framing is sufficiently free of moisture for habitable, sustainable, and well-built environments.
At the end of 2013, legislation (H.R. 3309, the Innovation Act) aimed at curtailing these trolls from being able to extort money from businesses passed the House by a vote of 325 to 91. Similar legislation is pending in the Senate. The Innovation Act would, among other things:
- Require specificity in patent lawsuits;
- Make losing plaintiffs pay;
- Protect end users by permitting technology vendors to step into the shoes of their customers and fight lawsuits against trolls on their customers' behalf; and
- Provide cheaper, swifter administrative reviews of poor-quality patents by the Patent and Trademark Office.