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Senate Bill Would Help China Steal US Tech, Critics Say

Conservatives are outraged over a bipartisan patent reform bill introduced in the Senate Wednesday, saying it will stifle innovation and make it easier for China to steal technology.

“The Senate patent legislation introduced today is nothing more than another crony kickback for Google, Obama’s second largest political donor, advancing the interests of China and rival economies at the expense American innovation,” said Erik Telford, president of the Franklin Center, in a statement.

The Protecting American Talent and Entrepreneurship (PATENT) Act is designed to create barriers to frivolous patent litigation, which many believe has become more common in recent years thanks to the activities of patent trolls — organizations that stockpile patents solely for the purpose of filing infringement suits, with no intention of putting them to productive use.

To that end, the bill would require plaintiffs to detail their allegations more comprehensively when filing a claim, as well as cover defendants’ attorney fees if a judge rules their suit frivolous. (RELATED: Republicans Vow to Take On Patent Trolls in Next Session)

“Effective patent troll legislation must provide a mechanism to ensure that defendants can recover fees even against judgment-proof shell companies,”  Republican Sen. Orrin Hatch, who is co-sponsoring the bill, said in a press release, adding “With the addition of a strong fee recovery provision that I have long championed, the PATENT Act now does just that.”

Many conservatives, including Telford, say that China and corporations as ubiquitous as Google will find it even easier under this bill to steal from smaller businesses. If small businesses judge the new bill’s stipulations for filing patent lawsuits financially insurmountable, Google becomes an even more impossible target. (RELATED: China Declares War on US Intellectual Property, Gets Into the Patent Trolling Business)

“This legislation will have a terrible impact on small business and inventors that represent American ingenuity and exceptionalism,” Ken Blackwell, a former Ohio Treasurer and Secretary of State who currently serves on the board of directors of the Club for Growth and the National Taxpayers Union, said in a statement. “We do not need any more government intrusions into the American economy, or legislation that hinders small business.” (RELATED: Intra-Conservative Debate Over Patent Reform Heats Up)

The American Conservative Union was even harsher in its assessment, saying the bill “violates the bedrock conservative principle of strong property rights … [and] would give President Obama’s top campaign bundlers in Silicon Valley the ability to take the intellectual property of legitimate patent holders with impunity.”

Telford elaborated on that point, noting that, “Google has lobbied the Obama Administration and Congress hard for legislation that … pulls the rug out from under inventors, small business, and innovation.” In fact, he said, the bill “looks more like it was written at Google headquarters or in Beijing.”

Nonetheless, supporters say the effort has strong support from both parties, at least in the Senate. At a joint press conference held by members the Senate Judiciary Committee Wednesday to announce the bill, the committee’s chairman, Republican Sen. Chuck Grassley, predicted it would move quickly, with a floor vote sometime this summer.

Follow Peter Fricke on Twitter

 

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