Hotel Industry to Congress: We Are Being “Shaken Down” By Patent Trolls

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. November 15, 2013

Washington, DC - November 15, 2013 - Justin Bragiel, general counsel for the Texas Hotel & Lodging Association (THLA), will testify today at a hearing of the House Energy and Commerce Subcommittee on Oversight and Investigations on “The Impact of Patent Assertion Entities on Innovation and the Economy.” The hearing has been convened by Chairman Tim Murphy (R-PA) to examine the recent activities of the patent assertion entities (PAEs), also known as “patent trolls,” and their impacts on American businesses.

THLA is a partner state association of the American Hotel & Lodging Association (AH&LA), the sole national association representing all segments of the 1.8 million-employee U.S. lodging industry.

Bragiel's submitted testimony notes that in the past year alone, more than 100 Texas hotels have been involved in lawsuits brought by patent trolls simply because of their installation of wireless Internet devices for use by guests. These complaints are “accompanied by a simple demand: Pay the PAE $5,000, or risk going to trial,” he said. “Defending a patent lawsuit can cost hundreds of thousands of dollars due to the complexity of the case. Meanwhile, our hotelier has done nothing more than purchase a device off the shelf, install it, and operate it exactly as the manufacturer intended.”

Frivolous patent troll lawsuits currently cost the U.S. economy $80 billion annually in lost revenues and productivity, and they are particularly detrimental to the many small hotels of 75 rooms or less found across the country.

“Hoteliers have one goal in mind when purchasing and installing wireless technology in their businesses: meeting the needs of their customers,” said Katherine Lugar, AH&LA president/CEO. “Their ability to operate these hotels and provide amenities for their guests should not be hindered by the growing number of frivolous lawsuits that could - even if not battled in the courts at a cost of tens of thousands of dollars - result in payments of $5,000 to patent trolls. For the small hotels and 'mom and pop' establishments that are such an integral part of our local economies, these fines cause particularly substantial hardships, and they should be stopped. We urge Congress to move quickly on legislative remedies to the problem of patent trolls and put an end to these wasteful, harmful lawsuits.”

About AH&LA

Serving the hospitality industry for more than a century, the American Hotel & Lodging Association (AH&LA) is the sole national association representing all sectors and stakeholders in the lodging industry, including individual hotel property members, hotel companies, student and faculty members, and industry suppliers. Headquartered in Washington, D.C., AH&LA provides members with national advocacy on Capitol Hill, public relations and image management, education, research and information, and other value-added services to provide bottom-line savings and ensure a positive business climate for the lodging industry. Partner state associations provide local representation and additional cost-saving benefits to members.