You are here

Why Patent Reform Matters to the Multifamily Industry

Congress is under pressure to pass patent reform legislation that could help the multifamily industry and its service providers that are targeted by abusive “patent trolls.” Trolls threaten legal action and demand licensing fees for everyday business products and technology applications. These can range from “off the shelf” tech tools and on-site video security systems to web-based transactions and marketing platforms.

Frivolous, unsupported patent infringement claims are a costly drain for the real estate sector and the economy as a whole. They force targeted companies to pay up or mount an expensive and long defense. Trolls abuse the current system by acquiring broad patents to launch vague enforcement actions against multiple “end user” business consumers. They also chase lucrative settlements from consumers rather than the manufacturers of potentially infringing products.

What’s Happening on Capitol Hill

NAA/NMHC are urging Congress to pass legislation to bring greater transparency and efficiency to patent regulation and enforcement. This includes requirements for patent holders to provide specific information about an alleged infringement in a demand letter or a complaint. Then, a targeted company could efficiently evaluate an allegation and effectively defend against a claim.

There’s bipartisan support in Congress for reform, but lawmakers are working to balance restraints on abuse with incentives for innovation. Critics say the House bill would unfairly burden patent holders with legitimate claims by imposing costly consequences for failed attempts to enforce patent rights, among other things. They say this is especially true for startups and small firms without deep pockets because the bill would force a patent holder who loses an infringement case to pay the prevailing accused infringer’s attorney fees.

The House was expected to vote on the “Innovation Act” as soon as next week following committee approval on June 10. However, timing is uncertain as Republicans attempt to resolve their differences. The Senate will likely consider a competing bill, the “PATENT Act,” after the House vote.

Provided by NMHC as part of the NAA/NMHC Joint Legislative Program

Apartment Advocate