Throughout American history, innovation has been central to our economy and our quality of life. American inventions, whether in medicine, travel, or communications, have benefited the world and played no small part in the advancement of our modern society.
Since the beginning of the industrial economy, the protection of intellectual property has been key to spurring this innovation. Inventors and researchers invest significant time and effort in their work at least in part because of the expectation that their labor will be rewarded.
The Founding Fathers knew well the value of intellectual property and its role in encouraging innovation. Article I, section 8, clause 8 of the Constitution provides for a national system of intellectual-property protection and charges Congress with running the system to “promote the progress of science and useful arts.”
As members of Congress sworn to support and defend the Constitution, we take that charge seriously. And so it is with real concern that we have viewed recent abuses of the patent system that turn the value of intellectual property on its head and threaten the system of American innovation.
With troubling and increasing frequency, bad actors leverage the complexity of our patent laws to extort illegitimate fees from unsuspecting businesses. Start-ups and small businesses that do not have large litigation budgets are hit particularly hard by this devious practice.
Of course, large companies and retailers are also negatively affected. Confronted with meritless litigation, these businesses must choose between doling out large payments to settle a frivolous case or paying significant lawyers’ fees to fight back. These unnecessary costs mean American consumers pay more for the products they buy.
No one disputes the value of intellectual property. But the recent abuses we have seen do not protect legitimate intellectual-property rights or the interests of inventors. Instead, they serve only to enrich opportunistic litigants or “patent trolls,” who have no interest in innovation or patents.
We have seen the terrible effects of patent trolls and how their fabricated claims of intellectual property can threaten hard-working American businesses. We have heard accounts of start-ups, small businesses, and companies in our home states of Virginia and Utah and across the United States that have been forced to shut down or reduce their businesses because of these abuses.
The success of the patent-troll model has only fueled more and more frivolous litigation. This cycle is an unnecessary strain on our nation’s innovators. Resources set aside for research and development are wasted on needless patent lawsuits and litigation expenses instead of the next life-improving or life-saving invention. Small businesses are closing up shop, innovators are afraid to chase their next idea, and businesses face ever-increasing costs for lawyers and unnecessary settlements.
We must put an end to abuse of the patent system and make the necessary changes to ensure that it serves its constitutional purpose: protecting innovators and their inventions.
For this reason, both houses of Congress are working hard to pass legislation that will reduce the harmful effects of patent trolls and restore the central role of innovation in our patent system.
In the House, the Judiciary Committee, chaired by Representative Goodlatte, recently reported the Innovation Act, H.R. 3309. This legislation includes commonsense changes to make the patent-litigation process more transparent, as well as necessary reforms to ensure that patent owners provide necessary information in court pleadings, so that businesses can know the basis on which they are being sued. The bill also requires courts to determine the merits of a patent earlier in the case to avoid costly litigation on invalid patents, and requires those who file frivolous patent claims to pay the attorneys’ fees of the business or individual they have needlessly sued.
In the Senate, Senator Lee has joined with Judiciary Committee chairman Patrick Leahy to introduce legislation that would increase transparency in patent ownership, prevent the widespread sending of frivolous demand letters that threaten businesses with meritless lawsuits, and (like the House bill) protect customers from frivolous patent lawsuits that should properly be brought against the manufacturer instead. Other Republican members of the Judiciary Committee have likewise introduced important legislation to require litigants to provide necessary information in court pleadings, to reform the process by which courts conduct discovery in patent litigation, and to require patent trolls to pay lawyers’ fees.
These legislative proposals are targeted at practices within our patent system that inhibit innovation. For our system of intellectual property to function properly in the long run, we must enact reforms to stop abuse of that system and restore the value patents add to our economy.
— Representative Bob Goodlatte (R., Va.) serves as chairman of the House Judiciary Committee. Senator Mike Lee (R., Utah) serves as ranking member on the Subcommittee on Antitrust, Competition Policy, and Consumer Rights for the Senate Judiciary Committee.