Voicing concerns about patent reform

As the U.S. Senate considers new legislation aimed at curbing patent litigation abuses, voices are being raised in opposition. In February, a group of more than 150 businesses and organizations representing high-tech startups, independent inventors, and university researchers  sent a letter to Senate Judiciary Committee co-chairs Senator Patrick Leahy and Charles Grassley urging caution lest the resulting legislation inadvertently undermine the patent system that is so crucial to American economic growth.

Senators Leahy and Grassley also received a letter and 2,099-signature petition from the Independent Inventors of America, expressing “alarm at the current rush toward patent legislation that could cripple invention in America” by raising the “barriers to justice even higher than they already are.”

Consider the heartfelt article by independent inventor Randy Landreneau in the February 10, 2014 issue of the IP Watchdog blog.  Mr. Landrenaeu writes of the ways in which the just-passed House version of patent reform, known as the Innovation Act, would harm America’s startups and independent inventors.  He cites the Innovation Act’s “loser pays” provision, noting that this provision could put small businesses who seek to defend their patent rights from encroachment by big corporations at a distinct economic disadvantage in any court battle. In fact, it may make it financially too risky for them to stand up for their legitimate rights in court.

Mr. Landrenau also states  that the whole patent troll issue has been obfuscated in a fog of propaganda by certain Big Tech multinationals willing to weaken the patent system itself — and therefore future generations of American startups — if it means that by doing so they can reduce their own company’s litigation costs. Indeed, Mr. Landreneau rightly points out that this propaganda campaign is “based on highly questionable data” such as the claim that “the number of patent infringement lawsuits has risen dramatically due to the so-called ‘patent trolls.’”

Today’s patent litigation rate actually is less than one-half what it was during the golden age of American invention in the 19th century Industrial Revolution. Patent and legal records from that time show that the patent litigation rate at that time — defined as the number of patent suits filed in a decade divided by the number of patents issued in that decade — reached 3.6 percent. In contrast, USCourts.gov figures show the patent litigation rate during the last decade was only about 1.57 percent. Today’s patent litigation rate is actually less than it was throughout the entire 70 years from 1790 to 1860 when it averaged 1.65 percent.

All of us who urge caution when enacting further patent reform must acknowledge, however, that there is a patent troll problem. As thousands of main street small businesses and Mom and Pop coffee shops can sadly attest, these ambulance chasers of the patent world are as real as they get, and have victimized thousands of small businesses in recent years (see my previous post “States Step Up Fight Against Patent Trolls”).

The issue here is that both claims are true. Patent trolls are real and a serious problem for small businesses across the United States and key provisions of the recently-enacted Innovation Act will unfortunately only harm legitimate inventors, not the patent troll bad actors who should be stopped.

For too long, many responsible patent owners have sought to avoid any discussion of the growing scourge of patent trolls, fearing it would only give ammunition to those who seek to eviscerate the entire patent system for their own business interests. But denying the truth because it might be employed wrongly is bad strategy. Better for legitimate patent owners to stand up publicly against patent trolls and support actions that will truly limit their abuses.