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Coakley Talks 'Patent Trolling' At Boston Startup

This article is more than 5 years old.

Attorney General Martha Coakley toured a Boston startup Wednesday to discuss the impact of patent litigation on startups and the innovation economy.

Coakley said she is exploring legal options to end "patent trolling," a term for people or companies that hold patents not to make products or provide services, but to sue others for infringement. Companies are frequently required to pay hundreds of thousands of dollars to defend themselves against the suits.

LevelUp is one of many startups facing "patent trolling." (Jason Tester Guerrilla Futures/Flickr)
LevelUp is one of many startups facing "patent trolling." (Jason Tester Guerrilla Futures/Flickr)

LevelUp, the Boston startup Coakley visited, designed a pay-by-phone system. The company said it already spent funds defending against lawsuits that could have been used to hire new employees.

"I have lots of friends who have had to settle with trolls," LevelUp CEO Seth Priebatsch said Wednesday morning during Coakley's tour of the company's office. "It's a very, sort of, unpleasant experience. And others who have actually, are running companies that have had to shut down over the legal bills and the fear of actually maintaining their business in the face of trolling."

Coakley identified the difference between legitimate and illegitimate patents.

"Patents are good. Patent trolling is not. And that's why we need to have this correction to make sure that we take care of it."

According to Tim Rowe, CEO of the Cambridge Innovation Center, startups are the biggest job creators, but they are also most vulnerable to trollers.

"It turns out that, now, over half of patent litigation is in the troll category," Rowe said. "So, this is not like a five percent problem or a 10 percent problem, the patent troll methodology has actually warped and usurped our entire patent system."

There are three bills pending in Congress that would inhibit patent trolls from seeking irrelevant lawsuits.

This program aired on November 6, 2013. The audio for this program is not available.

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