Updated: 03/23/2014 10:51 PM KSTP.com By: Stephen Tellier
They're called "patent trolls." They buy up patents, and then threaten companies with lawsuits, claiming violation of those patents. And their favorite targets are the small businesses that keep Minnesota's economy moving.
Now, momentum is growing in Washington, D.C., behind an effort to curb the activities of patent trolls.
The 35 workers at the Ten-E Packaging Services laboratory in Newport, Minn., are pros at pummeling packaging to make sure it can survive even the harshest shipment. It's a company that's built on withstanding shocks, shaking, and even extreme temperatures.
But few small businesses can withstand costly legal action.
"It rattles you. Nobody likes to be told that there's potentially a lawsuit zooming in on you," said Bob Ten Eyck, President and CEO of Ten-E Packaging.
Ten Eyck's business was hit by a patent troll two years ago. A company claimed he was violating patents that cover scanner technology that many companies use. He was told he could prevent a lawsuit - if he paid $30,000 to $40,000.
"What's going to happen next? Is some shirt-tail relative of Thomas Edison going to come in and declare that I've got a light switch tied to a light bulb and I'm going to have to start paying a royalty for using lighting?" Ten Eyck asked.
He is certainly not alone.
The Main Street Patent Coalition, a national coalition of business groups, estimates patent trolls cost American companies $29 billion in 2011. The Coalition has been running a radio ad in Minnesota recently, part of a push for a patent troll crackdown.
Last month, President Barack Obama issued executive actions on the issue, after declaring his support for patent reform in his State of the Union address. Four days later, 42 state attorneys general signed a letter to the U.S. Senate, urging further action. The U.S. House of Representatives has already passed a patent reform bill, and there are several bills pending in the Senate.
"I would just hope that they would be able to break through and rewrite some legislation to eliminate the problem," Ten Eyck said.
As for the patent trolls themselves, Ten Eyck said, "I just don't understand why people can't earn their money honestly and legitimately."
Ten Eyck contacted the Minnesota Attorney General's office. Last August, it forced MPHJ Technology Investments to stop sending notices to Minnesota businesses. The company also paid a $50,000 penalty.
The Main Street Patent Coalition will be hosting a forum on patent trolls on Thursday. It runs from 9 to 11 a.m. at the Ewald Conference Center at 1000 Westgate Drive in St. Paul. Organizers are asking any small businesses hit by patent trolls -- as well as those concerned about the issue in general -- to attend.