Americans across the ideological spectrum recognize that small businesses are the engines of job creation, innovation and economic growth in communities across the country. However, some recent criticisms by government officials in Washington have threatened to neutralize important tools that have introduced clarity and security into the American patent system for entrepreneurs. They are particularly focused on overturning a unanimous 2014 Supreme Court ruling that clarified the standards on what could be patentable.
This week and next, the Senate Judiciary Subcommittee on Intellectual Property is holding hearings on the state of patent eligibility in the United States, also known as Section 101 in U.S. patent law. As a small business owner, I urge our elected representatives to preserve the hard-won consensus we have achieved for small businesses and entrepreneurs who stand to benefit.
I have seen firsthand why the current legal framework used by patent examiners to evaluate what claims are eligible to be patented should be protected at all costs. I founded my business, Capstone Photography, in Connecticut to deliver photography services at sporting events, including running and cycling races. To help athletes find their photos, we built a company website where they could search by their race number, a common tool that many photographers utilize online. However, in 2013 my business was sued by a patent troll, which claimed we had used patented methods of cataloging race photos online without paying licensing fees.
A closer look at the troll’s patents showed they were absurdly vague and had not actually patented anything innovative that benefited society. Instead, the patents claimed to cover processes that had long been in use – for example, for “providing event photographs for inspection, selection and distribution via a computer network.” Such claims never should have been granted by the U.S. Patent and Trademark Office, and now they had been weaponized by patent trolls to target small businesses like mine.
Unlike many small business owners – who often become the targets of patent litigation abuse because they lack the legal and financial resources to mount a challenge in court and instead opt to settle – we chose to fight back against these unfounded patent claims.
Fortunately, in the middle of our battle, the Supreme Court issued a ruling in June 2014, holding that abstract ideas using generic computer methods are not eligible to be patented. In its unanimous decision, the Court made clear that abstract ideas that utilize generic computer methods are not something our patent system was designed to protect.
We were able to use the precedent of this case, known as Alice Corp. Pty. Ltd. v. CLS Bank International, to successfully defend against the patent troll’s claims. The Alice decision came down just in time to help us, but the financial toll was still devastating and nearly caused Capstone Photography to close its doors for good. Ultimately, we spent 10 months on litigation and $100,000 in legal fees – the equivalent of a year’s worth of profit for my small business. More significantly, we were forced to lay off 60 percent of our workforce and devote all our time and resources to fight a battle we never should have had to fight in the first place.
The strength and resilience of the American small business community is due to the strength of our overall patent system. But to continue growing and thriving, we need help facing attacks by those that would use abusive patent litigation to extort licensing fees and settlements. The clarification of Section 101 in the Alice ruling provided a lifeline to small businesses. It helps small business to defend against meritless patent claims and makes fighting back in court more accessible and affordable. Its legacy should be protected at all costs so that no other entrepreneurs must face the challenges and tough decisions that I did.
As the Senate Judiciary gathers to discuss Section 101, I urge them to weigh these benefits against those who wish to harm the engines of communities and drain billions from our economy.
Michael Skelps is the General Manager of Capstone Photography in Connecticut.
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