September 15, 2014 12:51 PM

Business leaders ask Texas lawmakers to crack down on "patent trolls"

States are just now starting to combat the problem that may be costing Texas businesses millions

Business leaders representing a variety of industries on Monday asked Texas senators to try to figure out a way to deal with what’s been described as a growing problem of so-called “patent trolls” who “extort” money from firms in pretty straightforward ways. While groups as diverse as Texans for Lawsuit Reform and the Texas Trial Lawyers Association agree there is clearly a problem, what’s much less clear is what, if anything, The Legislature can do about it.

A “patent troll” is a person or a company that claims to own a patent then tries to enforce it against accused infringers in an attempt to collect licensing fees. Since the “troll” doesn’t actually manufacture or supply the services in question, some have described what they’re doing as “economic rent-seeking.” During a hearing of the Senate State Affairs Committee, representatives from various industries described the ways in which this plays out.

For example, Texas Association of Realtors Chairman Dan Hatfield told lawmakers that some of his members have been either sued or threatened with lawsuits because they operate websites that include a search engine. An individual or company that claims to hold the patent on the type of search engine being used on a realtors’ website will claim that the realtor needs to pay a licensing fee to that patent holder, he said.

By Scott Braddock