Innovation and entrepreneurship are key ingredients for economic growth and jobs, both in Massachusetts and globally. The US patent system often supports these values, introducing new inventions and methods to the market and rewarding patent holders, which Rapid7—as a holder of patents—deeply appreciates.
However, the patent system can also be misused to the detriment of growth and innovation. Through threats of expensive lawsuits, patent trolls (or “patent assertion entities”) can extract money from companies of all sizes with spurious claims of patent infringement. This activity can be very harmful, especially for smaller companies, diverting limited resources to payoffs and legal fees instead of product development, job creation, and providing social value.
The group letter expresses support for legislative action to curb abusive patent infringement claims and lawsuits in Massachusetts. More than 30 states have laws intended to provide protections such as greater transparency in patent claims and court discretion to weed out bad actors. This effort is not new in Massachusetts, but a continuation of the advocacy of many companies large and small, including this open letter from Massachusetts business leaders from 2016. While the Massachusetts General Court passed a patent litigation reform bill last year, it never crossed the finish line and was not signed into law. Join us in urging the Massachusetts legislature to take up the issue again quickly and work to pass an effective solution that protects entrepreneurship and innovation.
Dear Members of the Massachusetts General Court:
We the undersigned Massachusetts companies and associations respectfully urge the Massachusetts General Court to move swiftly to address bad faith patent infringement claims.
Massachusetts is a global leader in innovation and startups, but patent troll assertions drain valuable resources from Massachusetts businesses and divert employees from innovating and creating jobs. Abusive patent infringement claims and litigation have a negative impact on economic growth and invention – which is the point of our Constitutionally-established patent system to begin with. These lawsuits misuse the court system by threatening wasteful costs as leverage to pressure companies to accept frivolous claims.
We believe this problem should be addressed in part by rebalancing laws to deter spurious claims. Such legislation could require that assertion letters be more transparent, as well as strengthen court discretion to weed out bad actors while safeguarding the legitimate interests of inventors and patent-holders. More than 30 other states have protections like this in place, and studies indicate these laws have led to higher employment in sectors targeted by patent trolls, including high-tech startups – a key component of the state economy.
In the last session, the General Court passed legislation to address this issue. We hope that the General Court approaches patent assertion reform again this session and collaborates with industry and other stakeholders to craft an effective solution that avoids unintended negative consequences to legitimate patent holders. We look forward to working with you to protect innovation and entrepreneurship in Massachusetts from bad faith patent infringement claims.
Kotlarz Realty Group
Massachusetts High Tech Council
Massachusetts Tech Leadership Council
Mercer Road Corp.
New England Venture Capital Association
Nouria Energy Corporation
Riptide Autonomous Solutions