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National Restaurant Association - NRA urges Senate action on patent reform

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NRA urges Senate action on patent reform

The National Restaurant Association and 36 state restaurant associations have called on the U.S. Senate  to support reforms to provide restaurants and other technology end-users with relief from abusive infringement lawsuits brought by patent trolls.

Patent assertion entities, also known as PAEs or patent trolls, are organizations that seek to profit by claiming ownership of patents on widely used business tools or technologies. Their demand letters often cite the estimated cost of defense, which typically exceeds the cost of a settlement. Because of the costs involved in challenging a claim, many businesses targeted by patent trolls choose instead to settle.

Over the course of the past year, the restaurant industry has been hammered by frivolous patent-infringement lawsuits, which challenge “the use of basic technologies in our establishments, on our websites, and on individuals’ smartphones,” the NRA and state partners wrote in a letter to two key Senate committees.

Some of the technologies targeted by patent trolls include in-store WiFi access, online nutrition calculators and restaurant locators on websites and smartphones.

“Many of the technologies that have come under fire from patent trolls are ones that provide extensive value-added services to our customers,” the NRA and its state partners wrote. “The restaurant industry is constantly evolving to provide exceptional service to our customers…Unfortunately, even the threat of litigation deters restaurants from partnering with new and innovative third-party technology providers.”

Congress and the White House in recent months have shown an interest in legislation to curb patent abuse. In June, President Obama issued five executive orders and made seven legislative recommendations aimed at protecting businesses and consumers from patent abuse and improving transparency and disclosure in demand letters. In October, Rep. Bob Goodlatte, (R-Va.) introduced legislation to address the problem of abusive litigation by PAEs. Last week, a Senate Commerce subcomittee held a hearing on the impact of demand letters sent by patent trolls to small businesses.

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

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