OPINION: New Yorkers need patent reform to protect small businesses

April 21, 2015 By David Bloom For Brooklyn Daily Eagle

David Bloom is the CEO of Ordrin, Inc. Photo courtesy of David Bloom

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I’m a fifth generation New Yorker. My family has roots stretching from Sheepshead Bay to Brooklyn Heights. I always wanted to have my own business here, and a few years ago I quit my regular job, found a partner and launched it. We built an innovative software company that got attention, awards and customers. Our innovations helped small businesses everywhere find and keep new customers. It was the American dream until a patent troll launched a frivolous lawsuit, forced us into court, and made us bleed from legal bills until we folded up shop last week.

Today the patent litigation system is rife with abuse. If you own a patent you can file suit for patent infringement without defining the infringing activity. You can pile on discovery with virtually no limits, and, even if you lose, you can simply appeal and get a do-over. Criminal and civil law have strong rules of evidence and procedure designed to protect against abuse. I spent almost $100,000 in legal fees to get a court order requiring my plaintiff to describe our alleged infringement. That’s a legal poll tax, and it must be changed.

This is what motivates the majority of patent lawsuits: Defendants are forced to choose between the extraordinary cost (often more than a million dollars) and the cost of settlement. No one is surprised that 90 percent of these cases settle.

My case is working through the system, and I am very encouraged. But the wasted resources and time and the publicity surrounding this case scared off clients, burned through our cash, and kept us from hiring when we most needed to grow. We shut down last week. The court system is designed to promote justice, and if I need it, I want my day in court. But patent law is so distorted that the courts have become the weapon of choice for patent extortionists.

We need patent reform that will protect New York’s small businesses from abusive demand letters. The Innovation Act, which was recently introduced in the House, goes a long way to reform the patent system. I hope we can continue to look to Sen. Chuck Schumer for leadership in introducing a similar bill in the Senate. In the meantime, businesses across all industries are suffering from unscrupulous patent lawsuits.

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David is the founder & CEO of Ordrin, a Google Ventures-backed local commerce software company. He was listed on the Silicon Alley 100 and Entrepreneur Magazine’s Brilliant 100. David lives in Brooklyn with his wife, a fellow entrepreneur, and two kids.