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Patent Troll Legislation Criticized for Potential Overreach

It is easy to get mad at patent trolls. After all, these are companies that buy patents, they rarely develop the patents on their own, with the expressed purpose of making money off those patents not through products or service roll outs–no. The reason that they bought these patents so they can basically participate in legal extortion.

The typical modus operandi of the patent troll is to compile a list of companies that are using specific technology. It may not even be infringing but these activities are within the range of potentially infringing activity. The patent troll then, through its lawyers, sends scary letters stating that the recipient’s activities may be infringing on a patent which is then described in the letter. The letter will then have an invitation for the recipient to get a hold of the patent holder to discuss settlement. Nobody likes to be shaken down especially if you are a fast moving business and cash flow is tight.

The fact of the matter is that it costs money just to have a lawyer read a scary letter, much less show up in court to defend your case. As a result, many of these scary letters actually works. For a few hundred dollars, small to medium sized businesses would just rather roll over, cut a check and get a settlement to make the problem go away. Sadly, patent trolling has reached its epidemic stage that congress has felt the need to step in and there are many potential solutions being floated through congress.

The problem is that many of these criticisms is the contention that the cure might be more fatal than the disease. In particular, one section of the patent litigation reform movement in congress is to expand the covered business method proceeding to cover all of the software industry. A lot of the critics are saying that if this happens, the US patent trade office or USPTO will have such a huge workload that it would really flood the markets and would add to the software industry’s expenses.

While the intention of the law is good because this helps protect financial firms from being hit by patent trolls claiming ownership of a certain finance related software, the bureaucratic costs might be too much that at the end of the day it might not offer much protection at all and worst, it ends up jacking up the costs of software companies.

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