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Wal-Mart, Google, others back U.S. bill to fight 'patent trolls'

The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/R
The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/R

WASHINGTON (Reuters) - Dozens of major U.S. companies, including Morgan Stanley, Google, Wal-Mart and Dell, on Tuesday urged lawmakers to pass bills that they said would protect new products against "extortive demands" on patents.

The abusive use of patent litigation has become an increasing concern for companies, many of which have been hit by lawsuits by firms known as "patent trolls" that buy intellectual property and seek money from companies that may infringe on these patents.

In a letter to the top Democrats and Republicans on the Senate and House of Representatives' Judiciary Committees, 44 companies urged support for bills that would broaden the power of the U.S. Patent and Trademark Office to review patents and invalidate any that it determines should not have been granted.

Currently, the patent office can review business method patents related to financial services more aggressively than other patents. The proposed legislation would expand that authority to include all business method patents.

The business method patents, many of which are also software patents, are frequently used by "patent trolls" to file infringement lawsuits.

The expanded program "would increase certainty for innovators actually bringing new products to market, who now face an increasing threat of extortive demands based on low-quality patents," the companies said in a letter dated Tuesday.

They estimated that frivolous patent litigation cost companies $29 billion in 2011, the most recent figures available.

Senator Chuck Schumer, a New York Democrat, introduced the Senate version of the bill in May, and California Representatives Darrell Issa, a Republican, and Judy Chu, a Democrat, launched a similar measure in the House this month.

No action has been taken on the legislation so far, but the backing from major companies could help create momentum.

The White House urged Congress in June to take steps to curb lawsuits by firms that make or sell nothing but specialize in suing others for patent infringement.

Other signatories of the letter include Amazon, Netflix, Newegg, Facebook, Eddie Bauer LLC, Samsung Electronics America, SurveyMonkey, Macy's and the Kroger Co.

(Reporting by Diane Bartz; editing by Ros Krasny and Leslie Adler)

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