Republicans leaders in both the House and Senate are vowing to take up the issue of patent reform during the next session of Congress.
Sen. Orrin Hatch, in a speech on the Senate floor Wednesday, said, “Patent trolls – which are often shell companies that do not make or sell anything – are crippling innovation and growth across all sectors of our economy,” adding that, “abusive patent litigation costs our economy over $60 billion each year.”
Hatch lamented the current Senate’s inactivity on the matter, saying, “With so much on the line, how can we afford not to act?”
Speaking at the U.S. Chamber of Commerce’s Global IP Summit on Tuesday, House Judiciary Committee Chairman Bob Goodlatte claimed he is working with the incoming Senate leadership “to see patent legislation signed into law in the near future.”
“There has been more than a small amount of activity in the IP policy area over the past several years,” Goodlatte noted, such as the America Invents Act, which “made it easier to challenge frivolous patents” that are kept solely as a means of filing infringement suits (a practice known as “trolling”).
Goodlatte is the sponsor of another patent reform bill, the Innovation Act, which builds on that effort by making it more difficult to file frivolous infringement claims in the first place and educating small businesses about how to protect themselves against patent trolling.
The Innovation Act passed the House last December by a bipartisan vote of 325-91, but as Goodlatte put it, subsequently “ran into the Washington, D.C. version of quicksand, known as the Senate.” (RELATED: Virginia Lawmaker Takes on Patent Trolls)
“Fortunately,” he said, “voters earlier this month made it clear that they are more interested in results than the latest filibuster,” making him hopeful that the new leadership will allow a vote on the bill, which he is confident would pass easily.
“This is legislation that has bipartisan support in the Senate, and, by the way, the endorsement of the President of the United States,” Goodlatte said, adding that it would do “great things for job creation and litigation reform in this country.”
Texas Republican Sen. John Cornyn indicated that the Senate would indeed take up patent reform, telling reporters last week that, “lawmakers are ‘absolutely’ going to pass a bill next year when Republicans take control,” according to the Hill.
Cornyn, who will be the Senate’s second-ranking Republican next year, worked with New York Democratic Sen. Charles Schumer last year “to hammer out compromise language that began to attract lawmakers’ interest, but the process was shut down” by Majority Leader Harry Reid, who refused to allow a vote on the bill.
Cornyn plans to advance a similar bill in the next session, saying, “I think we pretty much have a product that I would be happy with.” (RELATED: Congress’ Patent Reform Efforts Don’t Go Far Enough)
Taking action against patent trolls on the domestic front, however, might be just the first step, according to Hosuk Lee-Makiyama, director of the European Center for International Political Economy (EPICE). (RELATED: Patent Case Could Upset International Law)
Dr. Lee-Makiyama co-authored a recent research report showing that in recent years, countries including France, Japan, South Korea, Taiwan, China, and India have established Sovereign Patent Funds (SPF’s), which acquire patents in order to protect domestic industries by filing infringement claims that raise costs for foreign competitors.
Lee-Makiyama told The Daily Caller News Foundation that, “SPF’s were originally for promoting commercialization of domestic (academic) research,” but when mid-sized economies like France “weaponize their patent arsenals, even inadvertently, it would only serve to legitimize similar behavior by bigger and harder mercantilists like China.”
The largest SPF, he said, is China’s IP Bank, which in 2013 “was managing $700 million, dwarfing both private and public patent funds.” (RELATED: China Declares War on U.S. Intellectual Property, Gets Into the Patent Trolling Business)
Although SPF’s impose costs on foreign firms and consumers, Lee-Makiyama argues they are also detrimental to the countries that use them, saying, “there are plenty of data from OECD and others that indicate that state involvement in innovation leads to less productive outputs.”
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