IT and Business Insights for SMB Solution Providers

Patent Challenges Threaten Innovation, Business Growth

Laser-like focus is critical to the success of any business, but perhaps even more so for small- to medium-sized businesses (SMBs). With less of a margin for error than their larger counterparts, anything that causes a small business to take its eye off the ball is a threat to that company’s livelihood.

My industry — the conferencing and collaboration space — has been blanketed in recent years by a demand letter from a so-called patent troll, demanding payment for a mute feature that they claimed was under patent and could not be used without remuneration. They were looking for compensation from $15,000 up to $500,000 depending on how the size of the company and how quickly they were willing to pay.

Fortunately, my company was not one of the victims of this effort — but I know of many other firms that were. Some of them chose to pay just to avoid the fight and litigation of the claim. Others didn’t pay money, but took time and resources away from their businesses to actually prove their actions weren’t in violation of the patent.

Whether you cut a check or choose to fight the claim, there are soft and hard costs associated with a demand letter. As a small business, it rocks your sense of stability. It’s disruptive to the individual business and it’s disruptive to the industry.

Legislative Solution Promotes Transparency

“The Innovation Act” is geared toward addressing this issue, principally by promoting transparency. The legislation is meant to protect SMBs and allows those who could be a defendant — as well as the investor — to focus on their businesses. Transparency keeps legitimate; everything aboveboard.

Right now, a demand letter comes from an unknown entity, oftentimes a firm created specifically to handle them. Finding the name of the entity making the demand is difficult.

“The Innovation Act” supports and advocates for transparency, so all parties know exactly what the claim is. We believe this will make the claims much more legitimate if there is some accountability.

At the Washington, D.C., Tech Voice Fly-In earlier this year, I had the opportunity to meet with representatives and staffers in several congressional offices. Our position was and is that this legislation is a benefit to our industry, because the vast majority of businesses in the IT channel are SMBs. We’re not talking about a few small companies that could be impacted. We’re talking about an entire industry.

Click here to watch an informative video providing even more information on this issue.

Greg Plum is vice president for channel development at SoundConnect, a company specializing in unified business communications.

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