EFF filed comments today urging the Federal Trade Commission to take action against patent trolls. We have written often about the rise of the patent troll—entities that don't create products themselves, but instead buy patents and make money from lawsuits—and the serious harm they are causing true innovators.
In our comments, we urge the FTC to produce a detailed report about patent trolls (or, as the FTC more delicately calls them, ‘patent assertion entities’) and the cost they impose on the economy. We explain that trolls are costing billions of dollars every year with the burden falling especially hard on startups. Patent trolls target startups because they know smaller businesses lack the resources to fight back.
We also urge the FTC to use its investigatory and enforcement powers against the most abusive trolls—especially those that use baseless lawsuits to extort settlements. Because shell company patent trolls don’t make anything themselves, they generally have nothing to lose. This gives them a unique incentive to abuse the litigation system. Until now, this abuse has gone largely unchecked.
We welcome the FTC’s interest in patent trolls and hope the agency will follow up with action. A strong response to abusive patent trolls is long overdue.