WASHINGTON — Nebraska's all-Republican House delegation was united Thursday in supporting a bill aimed at cracking down on “patent trolls” who blanket businesses with baseless infringement claims.
“Out-of-control patent lawsuits shouldn't be chalked up as a cost of doing business,” said Rep. Lee Terry, R-Neb.
Terry was joined by fellow Nebraskans Jeff Fortenberry and Adrian Smith. Reps. Tom Latham and Steve King, both Iowa Republicans, also supported the legislation, while Rep. Bruce Braley, D-Iowa, voted against it.
The bill passed easily — 325-91 — despite concerns raised by universities and other groups that the measure could have unintended consequences that would stifle innovation.
Latham said it's outrageous that small businesses with limited resources are faced with defending themselves against such frivolous actions. He acknowledged the caution flags raised by some groups but said that, on the whole, the legislation is a step forward.
“You see by the size of the margin (of the vote) that there may be some concerns, but by far the abuse of the system that's going on today outweighs, I think, some of those concerns,” Latham said.
Patent trolls typically acquire — or claim to hold — rights to some part of a software package, fax machine or other product. They send letters to companies that have used the products, claiming the businesses owe them for years of unpaid licensing fees.
Terry cited a Boston University Law School report that found the overall cost of patent troll lawsuits to be $80 billion a year.
“Patent trolls are the equivalent of ambulance chasers, only they don't need to have an accident — they create it,” King said.
But universities have said the bill could disrupt the process in place whereby they license research discoveries to businesses that then develop the products and bring them to market.
King suggested Congress will keep an eye on the situation and could always tweak the system again to address those concerns.
“If there's unintended consequences, let's fix those unintended consequences,” King said. “I think the predictions of them are overstated at this point.”
The legislation still must pass the Senate.
Sen. Deb Fischer, R-Neb., said this week that she has heard diverse views from Nebraska on the issue and is looking forward to Senate debate on it.
“I'm grateful that the House is taking action to limit the aggressive tactics of so-called 'patent trolls,'” she said. “The House bill is a solid starting point for discussions in the Senate to address this serious problem...Given the negative impact this issue currently has on businesses and consumers, there's no time to waste.”