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At Endurance International Group, we have worked very hard for more than 16 years to build a platform to help small businesses succeed. We have used open source technology and we believe in the open source principles of giving back and making the web a better place. But some holders of patent rights take a different view – they are often called "trolls" or “patent assertion entities."
Trolls present a clear threat to innovation and their frivolous lawsuits threaten to stifle growth. Trolls are not using the patents they hold to produce goods and services or to help others succeed. Rather they try to impose a “tax” on legitimate operating businesses, like our small business customers, through frivolous lawsuits brought by faceless entities. Trolls try to intimidate legitimate businesses and extort them into paying “license fees” or settlement payments, using the business’s fear of incurring substantial legal fees to defend themselves.
When a legitimate company sues a competitor, they risk countersuit by the competitor (think Apple and Samsung). So each has some skin in the game. Not so with trolls – since trolls do not do business and do not create or deliver products or services, unlike a competitor, they can’t be countersued based on use of technology.
More and more, trolls have also adopted the insidious strategy of not only suing IT companies, but suing or threatening to sue small businesses and end users, from online retailers to restaurants, for merely using technology they purchased “off-the-shelf” to help run their business.
That is why in the U.S. we need patent reform. Trolls should have some skin in the game – when trolls lose they should have to share in the defendant’s legal costs. And there should be alternate, faster and cheaper ways for businesses to get frivolous cases reviewed and dismissed. Companies should not be extorted by unfounded claims into paying nuisance license fees just to avoid paying thousands of dollars in legal expenses to defend themselves. Some estimate that a single patent case can cost upwards of $5 million and take years just to get through discovery, hearings and trial. Never mind appeals, those are extra!
If you have a dream or an idea and you want to use the web to bring it to reality, we are here to support that and help deliver your dream. Patent reform will help make that possible.
Recently there has been more of a spolight on the abuses in the system, such as the use by patent trolls of aggressive litigation tactics, and of sham or shell companies to hide their actual ownership.
Fixing patent law in the U.S. is not going to be easy. The rights of legitimate patent holders, who use them to contribute to the GDP, need to be protected. Remember that some of our forebears such as Alexander Graham Bell and Thomas Edison held patents – legitimately so, too! So patent reform will need to be balanced, but action is needed.
We value innovation. We value your ideas and want to continue to help deliver them!
David Bryson, Web Civility Advocate