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National Restaurant Association - Congress finds common ground in patent trolls

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Congress finds common ground in patent trolls

Democrats and Republicans in Congress agree: Patent trolls are bad for business.

Several pieces of bipartisan legislation to curb patent abuse have been introduced in the House and Senate over the past few weeks, which is welcome news for the many restaurants that have been targeted by patent trolls.

Lawsuits brought by patent trolls—businesses that seek profit by purchasing patents on common business tools or practices and demanding fees from businesses that use them—have tripled in number over the past three years. Restaurants are a common target of the suits, often for offering free in-store Wi-Fi or employing Web-based tools like nutrition calculators or store locators. Faced with the choice between paying a licensing fee and incurring the high cost of defending an infringement suit, many operators choose to pay the fee or stop using the technology. It’s estimated that actions by patent trolls cost the economy $29 billion in 2011.

The National Restaurant Association has been a leader among business groups in advocating for increased demand letter transparency and other legislation to curb patent abuse. The Demand Letter Transparency Act, introduced yesterday in the House by Reps. Jarid Polis (D-Colo.), Tom Marino (R-Pa.) and Ted Deutch (D-Fla.), would require those who send demand letters claiming patent ownership to identify the patent in question and specify the nature of the alleged infringement.

“Patent trolls have placed a restrictive and unnecessary burden on the restaurant and small businesses looking to build towards the future,” said Scott DeFife, NRA executive vice president, policy and government affairs. “This continued assault on innovation is draining billions of dollars from our economy and inhibiting job creation. Demand letter transparency is critical to comprehensive patent reform as Main Street businesses continues to tackle illegitimate claims made by patent trolls. The Demand Letter Transparency Act will help millions of restaurateurs nationwide fight these frivolous claims, and clear the pathway for enhancing their customer experience.”

Other recent legislative proposals to curb patent abuse include

The threat of being targeted by a patent troll has led some restaurants to reconsider plans to add services like free Wi-Fi. During a press call hosted by The Internet Association on Monday, Michael Gibbs, vice president and general counsel for Whataburger, said the threat of an infringement suit led the company to pull back on plans to offer in-store Wi-Fi.

Read the National Restaurant Association’s issue brief on patent abuse.

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