Curbing abusive patent behavior

The innovation that matters in our daily lives is protected by patents. It’s the technology that keeps you safe in your car. The silicon chips in your mobile device that allow you to stay connected to your kids while on the move. Or the technology that keeps your credit card secure when you shop – in the store or online.

The U.S. patent system drives robust innovation which in turn drives economic growth.

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That’s why IBM is bringing more than 100 company leaders from across the country to discuss patent litigation reform with their members of Congress.

The IBM leaders will illustrate how the company’s $6 billion annual R&D investment contributes to the economy in their communities. They also will explain how technologies like Big Data, Cloud, Mobile and Social and cognitive computing touch and transform people’s lives – from cancer patient care to predictive policing to education.

Most importantly, they will stress how any proposed patent reform legislation must curb abusive behavior while also preserving the strong protections that make the U.S. patent system the envy of the world.

IBM is not alone in its innovative spirit. Our clients (often with IBM’s help) as well as many small companies are pushing the envelope every day to bring new products and services to market. Yet, there are threats that could harm companies’ ability to do so.  These companies – large and small – are under assault from abusive entities (often referred to as “patent trolls”) that are unfairly asserting patents in order to use the potential high cost of litigation as a means to secure lucrative settlements.

We must address these threats now. The America Invents Act, passed into law in 2011, enacted important tools for addressing the quality of all patents but it did not address abusive patent litigation behavior.

One of the best ways to address the patent troll problem is to shift the burden of paying legal fees in certain unjustified cases.  This would discourage spurious assertions of patents.

If a losing party in a patent case is at risk of paying the other party’s court fees when a case is deemed to be unjustified, then litigants would have a greater incentive to bring only the most meritorious arguments to court. This also would motivate businesses and individuals to aggressively fight back.

Another important solution is to require more specific information in an initial complaint about the nature of the alleged infringement. Increased specificity will discourage unmeritorious or poorly researched cases from being brought. Also, requiring basic information in court and at the Patent Office about the ultimate owner of the patent would diminish games played by those who hide patents in shell corporations. 

We must ensure, however, that legislative action does not harm the country’s ability to innovate. Weakening the U.S. patent system and thus threatening America’s innovation engine would always be bad policy – but it is even more so now when there is such a need to grow the economy in a challenging economic environment.

We urge the Senate to move swiftly on strong bipartisan legislation that will curb abusive behavior. Without it, the things in our daily lives that we never think about but truly depend upon – the inventions that keep us safe, help us heal, and transform the way we live and work – could slow or even stop.

We ought not to let that happen.

Padilla is vice president of IBM Governmental Programs.