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The International Trade Commission and Patent Trolls An Ongoing Threat to Online Access for American Consumers


By Mario H. Lopez, Hispanic Leadership Fund

With online access now a critical part of our daily lives, it becomes nerve-wracking to think of the consequences of something hindering the benefits afforded us by that connectivity.

One threat that most people don’t know much about are patent trolls.

As I have previously highlighted, patent trolls are shell companies that file frivolous litigation based on weak claims of infringement.  The companies being sued are obligated to defend themselves in federal court and increasingly before the International Trade Commission (ITC), a quasi-judicial federal agency with authority to settle certain cases involving U.S. intellectual property rights.

A company called Daedalus Prime is the latest troll to abuse the system; it has filed six lawsuits and three ITC cases involving semiconductor technology in smartphones.  Twenty different patents are named in the litigation campaign, all of them from a batch of 120 patents Daedalus Prime acquired from Intel last summer.  The patents in question are for common chip set components in smart phones and other mobile devices.

Daedalus Prime appears to have bought these patents just to use them to sue as many productive companies as they can, hoping the manufacturers will give in and pay up instead of going through the time-consuming and expensive process of defending themselves in court or at the ITC.

Daedalus Prime claims that American consumers can purchase mobile devices from other manufacturers besides the major suppliers it has targeted (e.g., from Apple, LG, and Google).  However, LG left the smartphone market and Apple and Google have also been the target for exclusion in multiple other ITC investigations this year alone. 

Indeed, Daedalus Prime’s statements  before the ITC are absurd at best—they describe cell phones as simply products for “entertainment and convenience” that do not serve any “public health, safety, or welfare” purpose.  Yes, really.

Perhaps the International Trade Commission’s record of ignoring the public interest it is supposed to protect gives Daedalus Prime confidence it can frame an ITC complaint with these claims that blocking mobile phones from the US market is not a problem. 

The role of the ITC provides a unique threat both to productive companies and to the consumers of those companies’ products because the only legal remedy possible under ITC proceedings is a total ban on product imports into the United States.  And that means patent trolls can threaten a product import ban that blocks a large portion of mobile devices from the U.S. market.

The critical question is why the ITC allows trolls to continue to misuse a U.S. Government agency, a sad irony given how US policymakers outside of the ITC clearly understand how essential smartphones are in our lives today.  As just one example, the White House, Federal Communications Commission, and members of Congress are working together to invest billions of dollars to connect all Americans with federal programs designed to fund broadband deployment and wireless networks with a goal of increasing affordability and helping ensure all Americans are online. 

Daedalus Prime’s ridiculous claims about cell phone technology are insulting to the millions of Americans who rely on their devices for work, access to healthcare, helping their kids with their homework, or just ensuring basic communications are possible.  Recent research has even shown that more parents are giving their young children smartphones in the tragic aftermath of the horrific school shooting in Uvalde, Texas. While only 15% of American six-year-olds had a cell phone in March, that number rose to 33% in August.  Over 50% of parents said they were going to sign their children up for a cell phone by the end of the year.

All Americans rely on smartphones and other mobile devices, and they are particularly important to underserved communities.  For example, one-quarter of U.S. Hispanic adults are the largest segment of “smartphone only” internet users, meaning they have a smartphone that connects them to online information but do not have a high-speed home internet connection.

Mobile connectivity requires affordable access to connected devices.  Improving affordability and access are essential to closing the digital divide —the gap in access to communication technologies that hurts millions of minority and low-income communities across the country.

That is why the threat posed by these patent trolls is so concerning.  The threat of grinding supply chains and product imports to a halt with minor or even frivolous patent infringement claims puts at risk uninterrupted access to the connectivity that enables workers, students and families to conduct their lives.  Given the structure of the smartphone market in the US,  excluding of any of the top suppliers would disrupt the marketplace, causing shortages and price hikes that would force millions of consumers out of their connectivity.  

Closing the digital divide is an important national imperative and smartphones and other mobile devices are key components of that goal.  It is past time for the ITC to get on board and tell trolls that enough is enough when it comes to excluding critical technology.


Mario H. Lopez is the president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all Americans.