Morning Consult: State Laws on Patent Demand Letters are Unnecessary Threats to the Innovation Economy, by Adam Mossoff and Devin Hartline
This post originally appeared in Morning Consult on October 16, 2015.
In a recent Wall Street Journal op-ed, Steve Malanga praised the 27 states that have passed legislation that “make it easier for a state’s attorney general to pursue actions against knowingly false claims made by so-called patent trolls.” He claimed that these “states have made a good start in restoring a sense of fairness and proportion to patent litigation.” Unfortunately, the exact opposite is the case, and this fractured patchwork of legislation threatens the certainty and consistency required for inventors and businesspersons to bring to market new patented innovations. This was exactly the problem the Framers of the Constitution recognized and sought to prevent by placing the authority to secure patents in Congress and in the federal courts.
Before addressing the constitutional and economic issues, let’s first distinguish reality from myth about patent litigation today. Malanga justifies these state laws by claiming that states lack the tools necessary to combat abusive behavior that never even reaches the courtroom. The common example is that a company sends thousands of misleading letters accusing people of patent infringement, extorting an easy settlement without any intention of going to trial. One notorious company, MPHJ Technology Investments, did exactly this in recent years.