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Retailers are retailers, 'not patent experts'

When the White House decided to crack down on patent trolls, administration officials didn’t waste time identifying the industry that has quickly become one of trolls’ biggest targets — retail.

“Patent trolls are increasingly targeting Main Street retailers,” the White House said, specifically citing infringement claims over retail point-of-sale software and business methods. “End-users should not be subject to lawsuits for simply using a product as intended.”

When the most recent patent reform law was passed just two years ago, frivolous lawsuits over dubious patent claims were a problem mostly for the high-tech industry and were rarely seen by retailers. Since then, patent trolls — companies that buy obscure patents from inventors and then make millions threatening to sue innocent users of the technology — have gone after merchants on a large scale. NRF has fielded complaints from more than 200 member companies — and those are just the ones we’ve heard from. More than 75 representatives from three dozen companies and organizations threatened by patent trolls — ranging from retailers to bankers to the entertainment industry — turned out for a recent meeting at NRF headquarters.

NRF Senior Vice President and General Counsel Mallory Duncan, speaking at a Capitol Hill event on patent trolls, said retailers using off-the-shelf products don’t necessarily know what patents are involved.

“As retailers, we are not patent experts,” Duncan said. “Retailers know no more about what is inside their point-of-sale systems than consumers know about what’s inside their cell phones, yet they’re being sued.”

NRF Senior Director for Federal Relations Beth Provenzano took a slightly different approach in a newspaper interview, telling a reporter “so much of retail is tech now that we’re being targeted by the patent trolls in a much more aggressive way.” You can read more on Duncan’s remarks in the Wall Street Journal and Provenzano’s in The Hill.

Both statements are true — retailers today are clearly on the cutting edge of technological innovation. But retailers are shopkeepers and merchants first, computer geeks second. Our industry recognizes challenges and finds solutions, but we partner with third parties who are responsible for what goes inside the magic boxes that make it all work. Just look at ads in NRF’s STORES magazine to see offerings on issues from digital signage to wireless video surveillance to supply chain management.

NRF is still reviewing the White House proposal, but officials there got at least one thing right — patent troll threats and lawsuits are a “drain on the American economy” that need to be stopped in order to protect American jobs and innovation.

J. Craig Shearman's picture
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