North Carolina Department of Justice
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National action needed on patent trolls, AG Cooper says

Release date: 12/17/2013

Patent infringement schemes target consumers, businesses with bogus fees

Raleigh: Consumers and businesses need protection from patent trolls that make questionable claims of patent infringement to extort high fees, Attorney General Roy Cooper said Tuesday.

Cooper today joined 42 other attorneys general in voicing strong support for the Federal Trade Commission’s proposed nationwide investigation of patent trolls.

“Small businesses should not get bullied into paying bogus fees just because they use common office equipment,” said Cooper.  “My office stands ready to work with federal and state authorities to protect consumers and businesses from patent trolls and their harassing schemes.”   

The term “patent troll” describes businesses that don’t invent or manufacture anything, but instead acquire patents and then make questionable claims of patent infringement to extract fees. Consumers, small businesses and non-profit agencies are often targeted by patent trolls because they purchase and use off-the-shelf commercial products that rely on common technology such as printers, scanners or wireless routers.  Patent trolls are often successful at getting victims to pay them because defending complex patent infringement lawsuits can be expensive.   

Cooper’s Consumer Protection Division recently opened an investigation based on complaints from three North Carolina small business owners about patent trolls.

The FTC in October announced plans to conduct a wide-ranging national investigation of known patent trolls, also known as patent assertion entities (PAEs). The investigation “should yield a trove of information relevant to PAEs’ practices, methods, and beliefs regarding the veracity (or lack thereof) of infringement claims, and the number and types of their target entities,” Cooper and the other Attorneys Generals wrote in a letter sent to the FTC today.

In their letter, Cooper and the other attorneys general ask that the FTC share with them information it gathers through its probe.  The attorneys general also recommended that the investigation examine more PAEs, and that it look at the role of legal counsel for these firms, who may play a central role in patent troll schemes.

“Knowing more about how patent trolls operate will help us to better protect North Carolina consumers and businesses from them,” Cooper said.

Contact: Noelle Talley, (919) 716-6413