Conservatives Call Patent Reform A ‘Direct Assault’ On Property Rights
A House committee approved a bill Thursday that seeks to discourage patent trolling, but some small businesses and conservative experts say the reforms go too far.
At a markup hearing Thursday, the House Judiciary Committee voted 24-8 to send the Innovation Act—the lead sponsor of which, Republican Rep. Bob Goodlatte, is also the committee’s chairman—to the full House for a vote.
A companion bill in the Senate, the PATENT Act, was likewise approved by the Senate Judiciary Committee last Thursday, and at least one of the two measures is likely to receive President Obama’s signature by the end of the year, according to The Washington Times.
Both bills are designed to create barriers to frivolous patent litigation, which entities known as patent trolls use to intimidate patent-holders into paying settlements. (RELATED: Reform Bill Takes Aim at Patent Trolls, Pisses Off Conservatives Instead)
Many believe patent trolling has become more common in recent years thanks to the activities of patent assertion entities—organizations that stockpile patents solely for the purpose of filing infringement suits, with no intention of putting them to productive use.
“At its core, abusive patent litigation is a drag on our economy and stifles innovation,” Goodlatte said in a press release. “The tens of billions of dollars squandered on settlements and litigation expenses associated with abusive patent suits represent truly wasted capital—capital that could have been used to create new jobs, fund research and development, and create new innovations and technologies.”
The Innovation Act, Goodlatte asserts, “takes the necessary steps to address abusive patent litigation, while protecting legitimate property rights.” (RELATED: Patent Reform Splitting Republicans, Business Community)
Conservative opponents disagree, however, arguing the bill would weaken intellectual property rights, thereby making it more difficult for individual inventors and small companies to enforce their legitimate patent claims.
“The Innovation Act, like its Senate counterpart the PATENT Act, is another big government overhaul that would undermine our patent system and reward a few large, multi-national tech giants—such as Google—who seek to weaken the intellectual property rights found in our Constitution,” former Ohio Treasurer and Secretary of State Ken Blackwell claims.
“There are concerns about the patent system which merit targeted reforms to deal with bad actors and frivolous lawsuits,” he conceded, but, “unfortunately, the above legislative proposals are simply an overhaul the entire system with another Big Government ‘fix.'”
Bobby Franklin, president and CEO of the National Venture Capital Association, offered a similar assessment in a press release Thursday, saying, “While we … share the mutual goal of deterring abusive behavior plaguing our patent litigation system, we cannot support the bill in its current form.” (RELATED: The Conservative Case Against Patent Reform)
Franklin explained that despite several modifications that have been made to the bill since it was first introduced in April, the NVCA believes the current version would still amount to a net drain on innovation and the broader economy.
Franklin Center president Erik Telford was more forceful in presenting his objections, contending that, “The Innovation Act represents everything that’s wrong in American politics today.”
“It’s discouraging and disappointing to see members of Congress capitulating to President Obama’s efforts to advance the interests of his Silicon Valley cronies, like Google and his other campaign donors, to push legislation that will severely undermine American innovation,” Telford elaborated. “The solutions being proposed are like demolishing your house because your dishwasher is broken.”
The American Conservative Union even took the unusual step of announcing that it would include a “no” vote on the Innovation Act in its annual rating of Congress, and urged members to instead support a more-limited reform effort, the TROL Act.
The Innovation Act “is not about trolls,” claims ACU executive director Dan Schneider. “It’s about immunizing patent infringers so that the value of patents will be diminished and can then be bought cheaply.”
“It is no wonder that Chinese telecommunications giant ZTE is now part of the alliance seeking to pass this bill,” Schneider added, pointing out that, “it will be so much easier for companies to sell Chinese knockoffs of American products if this bill passes.” (RELATED: Chinese Patent Infringer Backs US Patent Reform)
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