Patent trolls are lurking to gobble up your green

An official-looking letter arrives in the mail claiming that some innocuous product or service you use in your restaurant is covered by a patent, and you’re infringing on it. It demands you pay a licensing fee to some mystery company to settle the infraction. Do you: a) Ignore the letter? b) Pay the fee? c) Take your chances in court?

It’s a real “Sophie’s Choice” for the growing number of restaurateurs finding themselves in this predicament. Often, the companies behind these threatening letters are patent trolls, or patent-assertion entities—shell companies whose sole business is to buy up patents and then threaten businesses—often ones with revenue under $10 million—with lawsuits.

Legislation that would have made it harder for trolls to prey on businesses was shelved in the Senate last month, despite having widespread support in Washington, D.C. Now, the best bet for relief may lie in legislation moving through several statehouses.

“In my opinion, it’s extortion, pure and simple,” said Marc Simon, president and CEO of Rubio’s Fresh Mexican Grill, which is currently fighting its own battle against a patent troll. “It’s bad for business.” ­

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Leadership

Restaurants bring the industry's concerns to Congress

Neary 600 operators made their case to lawmakers as part of the National Restaurant Association’s Public Affairs Conference.

Financing

Podcast transcript: Virtual Dining Brands co-founder Robbie Earl

A Deeper Dive: What is the future of digital-only concepts? Earl discusses their work to ensure quality and why focusing on restaurant delivery works.

Financing

In the fast-casual sector, Chipotle laps Panera Bread

The Bottom Line: The two fast-casual restaurant pioneers have diverged over the past five years, as the burrito chain has thrived while Panera hit a wall. Here's why.

Trending

More from our partners