Restoring and strengthening the US patent system
Going all the way back to our founding, America has always been a nation of innovators. That’s why the Founders, more than 200 years ago, created strong intellectual property laws that grant limited exclusivity – through patents – to reward inventors and encourage them to share their discoveries with the public.
Today, patents drive research and development, as well as the investments necessary to bring new products to market. Without them, many groundbreaking innovations – particularly those from independent inventors and startups – would never see the light of day. We all depend on these new technologies to save lives, protect our country, and fuel the most robust and innovative economy on the planet.
Over the last decade, though, our patent system has fallen into crisis.
Recent legislative and judicial changes intended to protect innovators and entrepreneurs by deterring frivolous lawsuits have handicapped those very creators the patent system was designed to protect. Of course, abuse of the patent system should never be tolerated, but inventors should know that if someone infringes their patent – steals their invention – a court will stop them. Sadly, that is no longer the case.
We’ve also reached the point where patents – despite being examined and approved by the U.S. Patent and Trademark Office – are subject to repeated challenges at any time, by anyone. The new administrative proceedings to resolve these challenges were supposed to be faster, cheaper, and more efficient than the court system, but they don’t apply the same standards as courts. As a result, it’s nearly impossible to determine whether any patent is fully valid and enforceable, as the courts and administrative judges can – and often do – hand down conflicting decisions.
Put simply, the tail is wagging the dog. Instead of protecting and incentivizing innovation, our patent system is hindering it. We’ve lost the proper balance between providing an opportunity to challenge improvidently granted patents and providing certainty to patent owners who should be spending their resources delivering ideas to market.
The effects are particularly troubling for small, independent inventors and startups. Increasingly, we’re seeing investors getting cold feet at the prospect of never-ending patent litigation, and resource-intensive technology startups fold as a result.
We need to restore the protections the Founders established to ensure that inventors can secure funding to develop their next big idea – not only in Silicon Valley, but also on Main Street, in university labs, and on garage workbenches. As a Republican from Ohio and a Democrat from Delaware, we know this is not a partisan issue. Fixing this crisis and restoring balance has been a shared top priority of ours in Congress.
Recently, at a Senate IP Subcommittee public hearing, witnesses testified to the struggles of patent owners reflecting the views of startups to large companies and academia. They echoed what we already knew: U.S. patents have become too difficult to enforce and too unreliable to justify critical investments in emerging technologies. That means that the next great idea is likely to go unfunded or undeveloped in our country, unless we have a stronger patent system.
A representative from a technology company in Delaware explained the frustration felt by companies who struggle to make research investment decisions because of the increasingly difficult and uncertain process of enforcing patent property rights.
An academic explained the impacts of “efficient infringement” – a strategy where some companies now find it less costly to infringe someone else’s patents and then fight in court, rather than to negotiate licensing fees up front. Translation: companies are choosing to steal from other patent owners rather than pay fair market value for those innovations. Worse yet, this litigation risk can sink the hopes of that startup that can’t afford to wage lengthy legal campaigns after already facing a “gauntlet” of 12 years in development and spending 100 million dollars just to bring a medical device to market, as explained by one entrepreneur.
Clearly, something needs to change. We have legislation in place to do just that.
Our STRONGER Patents Act would restore much needed balance to the U.S. patent system and predictability for American innovators and entrepreneurs. It would ensure that innovators can focus on research and development rather than wasting resources re-litigating patents that have already survived multiple rounds of scrutiny. It would require courts to recognize the property rights established by our Founders while also empowering the Federal Trade Commission to crack down on frivolous infringement claims.
We’ve been working on this legislation for a few years, and the recent hearing provided an opportunity to hear valuable feedback. Witnesses shed light on the fact that not all startups are affected equally and emphasized the importance of considering all perspectives as we move forward. They also identified areas for possible clarification. For example, it should be clear that courts can and should consider the public interest when considering injunction requests. We are committed to improving this legislation to support American inventors and startups, and we appreciate all the feedback we’ve received.
Innovation has fueled our nation’s success for over two hundred years, but its strength lies in balance. Patent owners share their life’s work – in public for all to see – in exchange for the limited exclusive right to their inventions. The time has come to restore that balance, ensure that exclusive protection, and finally reclaim the title for the U.S. as the gold standard for intellectual property protection, just as the Founders intended.
Coons is Intellectual Property Subcommittee ranking member. Stivers represents Ohio’s 15th District and is a member of the Financial Services Committee.