The state House has begun work to cut down on patent trolling, the practice of bringing unfounded patent claims against a company in an effort to win a settlement.
"It's an extremely important issue for innovators in our state," Rep. Tom Murry, R-Wake, told the House Commerce Committee on Wednesday.
The measure, first drafted in an interim committee, would allow companies to seek damages against those who sue over a patent case that is eventually dismissed for not having merit.
Cary-based software developer SAS Institute has been a proponent of the bill. General counsel John Boswell said that one patent troll company had won $85 million from other companies before going after SAS. After $8 million in litigation costs, SAS won. But when SAS tried to recoup damages against the company, it had only $800 in the bank.
"We can't afford every time we get sued to spend $8 million to prove we're right," Boswell said.
Murry's bill would have allowed SAS to file its own suit to recoup damages against the people behind the shell corporation.
Murry said some companies, including heavy equipment maker Caterpillar, had concerns about the measure but that most of those problems had been worked out.
The Commerce Committee voted in favor of the measure, sending it to a judiciary panel.
Senators are also looking at patent trolling protections, but that language is tied up in a bill dealing with a number of topics surrounding business lawsuits.