It isn’t often that Congress is willing to go after the trial lawyers, but the problem of patent trolling is so acute that members of both parties have had enough. Later this month, the House Judiciary Committee will address legislation introduced by Chairman Bob Goodlatte (R-VA) to make it more difficult for patent trolls to impose their costs and burdens on America’s small businesses.
Patent trolls have become a cottage industry where someone buys an old or unenforced patent and begins to send out demand letters to everyone and anyone demanding compensation for patent infringement. The legal pleadings are so vague that demand letters do not even have to state who owns the current patent or even how it is being infringement. In one case, a group started suing bloggers and websites for linking to articles and demanding compensation. A judge found they didn’t even own the copyrights they were suing over. Other cases are even more abusive and outrageous.
That’s why everyone from Sen. Pat Leahy(D-VT) to Sen. Mike Lee (R-UT) wants to Congress to end this abuse that costs the economy billions. But anyone with a sense of how Congress works knows that lobbyists seek to add their special passengers on to moving ships. A coalition of big corporate giants and their lobbyists are pushing include a provision in the patent troll bill that would devastate small inventors and innovators.
The provision is called the Covered Business Method (CBM) review process and has been included in the draft version of the Goodlatte bill. To protect innovators from having their invention stolen and wrongfully patented, most patents have a nine month review period in which they can be challenged. Corporate giants want to eliminate the nine-month review and allow patents to be challenged at any point during the life of a patent.
Proponents of CBM argue that the measure is needed to stop patent trolls. Their position is equivalent to saying that we should rob all Americans of their Second Amendment rights in order to stop criminals from using guns in violent acts. Taking away or limiting the ability of innovators to protect their inventions is no solution to addressing patent trolls. The legislation already addresses patent trolls with several measures including among other things instituting loser pays and closing the loophole that allows infringement suits to be brought without even specifying what patent was infringed and how.
The true motivation behind CBM is to allow these billion dollar companies to use patented technology without having to compensate those pesky little inventors. If passed, the CBM provision would allow these big companies to avoid dealing with inventors whose technology they are using illegally by challenging the validity of the patent at USPTO.
Once these companies request a CBM review, all enforcement mechanisms for patent infringement such as legal actions are halted. This would allow these companies to continue to illegitimately use patented technology for a minimum of 18 months while the PTO “reviews” a patent.
These billion dollars companies with their teams of legal counsels and law firms will begin to target small businesses and inventors making the issuance of a patent nearly useless if you cannot afford to defend it.
Aside from the degree to which such a theft of property is just unAmerican, this will have a profoundly negative impact on innovation.
The Founders included patents in the Constitution as a means of protecting property and economic liberty. They understood granting monopoly protection for innovation for a limited period of time will incentivize others to do the same. The CBM is a direct assault on the vision of the Founders and should be removed from the bill. Limiting patent troll litigation will benefit the economy but the CBM provision will not. Congress should reject CBM.