Top Economists, Conservative Activists Warn Congress Not To Mess With Patents

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Peter Fricke Contributor
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Academics and activists joined forces this week to pressure Congress not to move forward on patent reform, claiming the legislation would disrupt innovation to solve a non-existent problem.

In recent weeks, both the House and the Senate have introduced bills designed to discourage abusive patent litigation, known as “patent trolling,” in response to claims that frivolous patent cases discourage innovation and force U.S. businesses to spend billions of dollars every year defending themselves in court.

Of particular concern to lawmakers are suits brought by non-practicing entities, organizations that amass patent portfolios for the purpose of collecting licensing fees or filing infringement claims, rather than to put the patents to productive use. (RELATED: Republicans Vow to Take On Patent Trolls in Next Session)

However, in a letter sent to members of Congress on Tuesday, a group of 40 professors and economists from around the country say they have “deep concerns with the many flawed, unreliable, or incomplete studies about the American patent system that have been provided to members of Congress.”

The scholars contend that this “flawed data” greatly exaggerates the threat posed by patent trolls, and “have engendered an alarmist reaction that threatens to gut the patent system as it existed in the Twentieth Century, a period of tremendous innovation and economic growth.”

One example they give is the claim that patent trolls cost U.S. businesses $29 billion a year in direct costs, which they say “has been roundly criticized” for relying on “deeply flawed” studies. (RELATED: Patent Reform Splitting Republicans, Business Community)

Similarly, they say the claim that patent trolls bring the majority of patent lawsuits “is profoundly incorrect,” pointing out that more-recent studies indicate that the number of patent infringement filings fell noticeably in 2014, especially among NPE’s.

“That these proposed changes to the patent system have not been supported by rigorous studies is an understatement,” they wrote. “We believe it is imperative that [Congress’] decisions be informed by reliable data that accurately reflect the real-world performance of the U.S. patent system.”

“It is important to remember that inventors and startups rely on the patent system to protect their most valuable assets,” the professors said. “If reducing patent litigation comes at the price of reducing inventors’ ability to protect their patents, the costs to American innovation may well outweigh the benefits.”

Those concerns were elaborated upon Wednesday in a letter sent to congressional leadership by a coalition of 24 conservative activists, including Phyllis Schlafly, American Conservative Union executive director Dan Schneider and Club for Growth president David McIntosh. (RELATED: Reform Bill Takes Aim at Patent Trolls, Pisses Off Conservatives Instead)

The activists target their ire toward the Innovation Act, sponsored by Republican Rep. Bob Goodlatte, which they contend “would weaken American patents and the ability of innovators—particularly independent inventors—to secure their constitutionally guaranteed right to their inventions and discoveries.”

“The bill’s overly broad provisions apply to all litigants seeking to assert patents, not just patent trolls,” they explain. “And as a result will severely undercut the ability of inventors to enforce their intellectual property rights, ultimately devaluing patents, stifling American innovation, and diminishing our global competitiveness.”

Moreover, they warn that patent reform would not only affect domestic patent disputes, but would also undermine the ability of American companies to defend their intellectual property rights against foreign firms.

“China is already eating our lunch, stealing our patented inventions and harassing American companies with Chinese facilities,” they point out. “Why would we want to willingly give up the competitive edge we enjoy in incentivizing innovation through the strongest IP regime in the world?”

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