The National Restaurant Association testified before a House subcommittee on Thursday and discussed the impact of patent trolls on the national economy.
“The restaurant industry is under constant assault from litigious claims made by patent trolls,” Jamie Richardson, the vice president of government, shareholder and community relations for White Castle, said. “Their frivolous infringement demand letters are stifling innovation and stunting growth among small business. Congress must put an end to their baseless scare tactics so the restaurant industry and small business community can continue to provide an ever-evolving experience for our customers.”
The Obama Administration has made an attempt to curb rampant patent litigation that is said by industry members and legal experts to impede innovation and raise the cost of goods.
Patent trolls generally do not produce anything themselves but instead hide behind shell companies to sue for patent infringement, often over technology not used by the company, TIME reports.
Data from the NRA showed that approximately 50 percent of full- and limited-service restaurants plan to spend more on customer-oriented technology, including iPads/tablets and Wi-Fi internet, as well as smartphone apps, which could put them more at risk for patent lawsuits.
“At White Castle, we have employed our recent innovations to enhance the restaurant experience for our loyal customers,” Richardson said. “Unfortunately, our newer ’firsts’ have come under fire from frivolous patent assertion entity claims – claims now impacting our business decisions and making it harder to provide our customers with the experience they want and expect. In order to continue to strive as a leader, job-creator, and innovator, it is essential we are able to integrate new technologies without daily fear of receiving frivolous patent assertion litigation demands.”
Richard said the portion of the company’s legal budget has increased from 0.25 percent to nearly 20 percent as a result of patent troll litigation. In a recent letter to the Senate Judiciary and Commerce Committee, the NRA and 36 of its partners urged the committee to press forward with patent litigation reform.
“Patent trolls are continuing to exploit restaurant businesses and drain and more than $80 billion out of our economy each year,” Scott DeFife, the executive vice president of policy and government affairs for the NRA, said. “Demand letter disclosure, increased transparency and patent litigation reform will help provide significant relief for the restaurant and foodservice industry.”