Jason Schultz testifies before House committee hearing on patent trolling

In testimony on April 8 before the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing, and Trade, Professor Jason Schultz talked about an issue in which he has a longstanding and keen interest: patent trolling.

A patent troll, also known as a patent assertion entity (PAE), typically acquires patent rights for the chief purpose of making claims against individuals or businesses that the PAE claims are infringing on its patents. A PAE’s foremost aim is economic rent-seeking rather than using its patents to create products or services. Defendants often agree to monetary settlements rather than face costly and time-consuming court battles.

Jason SchultzAt NYU Law, students in Schultz’s Technology Law and Policy Clinic represent individuals and entities who are faced with “abusive patent threats,” often delivered through “dangerous and irresponsible demand letter-writing campaigns,” as Schultz put it.

In the hearing, which focused on abusive patent demand letters in particular, Schultz explained that his clinic’s clients often receive vaguely worded letters that do not explain precisely how a patent has allegedly been infringed upon. “This is not just about the shakedown,” he said, adding, “It’s one thing to defend a patent litigation, and we’ve seen a lot of statistics about how many millions of dollars that takes, but sometimes you can resolve these issues in good faith if you have enough information.”

Schultz proposed that demand letters should be required to contain specific allegations and information so that a recipient can assess what the problem really is and make an informed decision about the best way to respond.

Schultz’s clinic has also been involved in the upcoming Supreme Court case American Broadcasting Companies, Inc. v. Aereo, Inc. In advance of oral arguments on April 22, Schultz has filed an amicus brief, written with the assistance of clinic students Ilyssa Coghlan '14 and Rafael Reyneri ’15, on behalf of small and independent broadcasters.

The case pits the largest American broadcast networks against Aereo, a startup that offers television programming online for a monthly fee. The Court must determine whether Aereo is violating the Copyright Act by using thousands of individual miniature antennae to capture public airwave signals for individual subscribers, allowing the company to argue it is merely facilitating private viewings for discrete parties.

The small and independent broadcasters (SIBs) represented in the brief support services like Aereo because of the potential for expanding their niche audiences. The brief argues that “SIBs see Aereo as a modern and easier way to empower the viewing public to watch over-the-air programming, which has always been their right…. If the Court allows large broadcasters to control technological platforms such as Aereo, SIBs will continue to struggle to disseminate their content. This will disproportionately harm audiences that are currently being underserved…. Affirming that this technology does not violate copyright law will allow audiences, especially diverse audiences, to receive the content they desire in the manner in which they desire, while also empowering SIBs to meet those demands.”

Watch Jason Schultz's testimony (beginning at 31:22):

Posted April 11, 2014