The booming Bay State startup economy is being threatened by patent trolls — patent-owning firms with frivolous or overreaching infringement claims — and needs to fight back, industry leaders and Attorney General Martha Coakley said yesterday.
Level Up founder Seth Priebatsch said fighting patent trolls has cost his firm nearly $1 million, and prevented him from hiring as many as 20 workers.
"We're lucky to have great backers," he said. "There's lots of other companies that are smaller and can't afford the legal bills."
Level Up — which makes an app that lets users pay with their phones — is fighting four suits from patent trolls, including one that alleges infringement on a patent designed to monitor traffic.
Priebatsch was joined at the Boston headquarters of Level Up's parent company, SCVNGR, by Coakley and Cambridge Innovation Center CEO Tim Rowe.
"It really is highway robbery," said Rowe, whose Kendall Square center houses about 450 startups. "Over half of all patent litigation is in the troll category."
Coakley said her office is looking into how to defend Bay State companies from the "predatory behavior," including filing unfair business practices lawsuits.
Vermont Attorney General William Sorrell, who sued a patent troll in the spring, told the Herald he has not heard of any other such complaints since then.
"I think Vermont has delivered a pretty strong message that patent trolls should stay out," he said.
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