It is a tale that has been told countless times before — a problem is “solved” by over-expansive government action and regulation, but myriad other problems are created. We saw it with the health care system and the resulting Obamacare fiasco, and with the Dodd-Frank Act, which overhauled the financial sector in ways not seen since the Great Depression. And now we are seeing the trend continue with patent legislation.
Neither the Innovation Act in the House of Representatives nor the PATENT Act in the Senate is a reasonable solution to frivolous patent lawsuits. The force and scope of the bills are far greater than the need.
These bills claim to address patent trolls and litigation abuse by raising the standards for pleading requirements in a patent case, staying any action against manufacturers, and shifting fees to those who are bringing the suits if they lose the case, among other changes.
Some of these sound reasonable but have unintended consequences and are so broad that they don’t distinguish between legitimate patent holders and so-called trolls. The definition of a “customer” is so broad under the stay provision that it can stay litigation against almost any manufacturer that violates a patent. Additionally, the courts have already given judges broad latitude to shift fees when patent legislation is abusive. We need to be careful of making changes across the board that limit the rights of innovators to defend their intellectual property through the legal system.
Both bills are filled with solutions far more unwieldy than the problems they purport to remedy. And yet they have each passed their respective committees, even in the face of bipartisan opposition. In their current state, these bills would spell disaster for innovation in America.
Americans need to be aware of the harm these bills would do to inventors. As Senator Ted Cruz, R-Texas, one of only two Republicans who had the courage to stand against the bill in committee, stated during mark-up, “I think we need to be particularly solicitous of protecting inventors, protecting the little guy, protecting those who are asserting their rights protected by the United States Constitution to develop new innovations, and I fear that if we lean too far against the small patent holder that in turn will hamper innovation in our economy.”
Sen. Cruz’s statement puts the consequences mildly. I have consistently warned of the dangers of these bills: The troublesome crony capitalism at work and strings being pulled behind the scenes by companies like Google; the dangers of moving bills forward that compromise intellectual property and put America’s policies in line with those of countries like China; the problems innovators — everyone from your local inventor to medical research programs at universities — will have securing funding and maintaining sound ownership of their inventions.
But, more concerning is the issue that Carly Fiorina, the former CEO of Hewlett-Packard, has so succinctly raised. “Watch carefully who is supporting that legislation,” she has said. “It’s not the small it’s the big. It’s the big companies whose ongoing economic benefit depends upon their ability to acquire innovations and patents at a lower cost.”
Therein lies perhaps the greatest concern regarding this legislation. It favors tech giants that would have the financial and legal resources to weather the storm that would be created if the proposed legislation passes. It will make defending the intellectual property of small inventors, universities, venture capitalists and virtually everyone who makes up the ground floor of American innovation nearly impossible.
The rush to support big business at the cost of small inventors is more than a little concerning. The result will be a David and Goliath scenario in which Congress has stripped David of his slingshot. If these bills pass, Goliath — Big Business in America — will walk away unscathed, but smaller inventors will be left defenseless.
As they are now, the Innovation Act and the PATENT Act would help a few powerful companies, hurt small inventors and cripple our culture of innovation. We need to work to defeat or to amend them before they are allowed to undermine the greatness of the American patent system and strip American innovators of the rights and protections enshrined by our founders in the Constitution.
Ken Blackwell, former Ohio Secretary of State, is on the board of the Becket Fund for Religious Liberty, Club for Growth and National Taxpayers Union. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
