Changes

According to the U.S. Census Bureau, small businesses with less than 20 employees made up 89.6 percent of employer firms in the United States in 2012. [http://sbecouncil.org/about-us/facts-and-data/] Small firms produce more patents per employee than large companies and help drive innovation in the United States economy. The patents they develop have a greater impact and are often more technologically important than those of large firms. [http://www.imamidejo.si/resources/files/doc/analiza%20patentov%20v%20msp%20usa.pdf] The Small Business Administration reported that "although small firms account for only 8 percent of patents granted, they account for 24 percent of the patents in the top 100 emerging clusters." [http://sbecouncil.org/about-us/facts-and-data/] Because small businesses and emerging companies are not always able to protect their patents on their own and account for much of the innovation driving emerging industries today, they need patent assertion entities who have the power to protect their patents for them.

There's no doubt that patent trolls exist. eDekka, widely considered one of the top patent trolls, filed lawsuits against 101 companies for patent infringement in 2015, 55% of which are considered small businesses under SBA regulations. There may be more companies eDekka sent threatening demand letters to, companies that decided to settle instead of bringing the case to court. Compare eDekka to Intellectual Ventures, which had only filed 6 patent lawsuits in all of 2015. Intellectual Ventures is considered by the public to be a legitimate patent monetization firm [http://www.ipnav.com/blog/patent-assertion-entities-good-or-bad-for-innovation/]. It is clear that there is a distinct difference between patent assertion entities and patent trolls. As of December 2015, eDekka had sued over 200 companies for infringing upon the US Patent no. 6,266,674 "Random Access Information Retrieval Utilizing User-Defined Labels", a patent on a form of household remote controls. 168 of these cases were later thrown out by US District Judge Rodney Gilstrap, who wrote that the "strikingly similar lawsuits" demonstrate "an aggressive strategy that avoids testing its case on the merits and instead aims for early settlements falling at or below the cost of defense" [http://arstechnica.com/tech-policy/2015/12/in-a-first-east-texas-judge-hits-patent-troll-with-attorneys-fees/].

==Stricter Demand Letter Requirements==

Supporters of current legislation against patent trolls claim that the huge increase in patent litigation cases proves that patent trolls, just like eDekka, are increasing in number and prevalence. Many of them point to stricter demand letter requirements as the solution. The Innovation Act that is currently under consideration in the House demands that any claims of patent infringement must be accompanied by a very specific initial complaint letter, including information such as the name, exact model number, and description of each alleged infringement.