National Venture Capital Association Blog: A Balanced Approach on Patents is Critical to Innovation, by Kelly Slone
This post originally appeared in the National Venture Capital Association blog on February 11, 2015.
Now that the Republican Congress is moving forward quickly on patent litigation reform, policymakers must consider the impact of patent reform on the innovation economy. In January, NVCA, along with a broad coalition of universities, non-profit foundations, start-ups, small businesses, manufacturing, technology, and life sciences companies sent a letter to leadership of the House and Senate Judiciary Committees conveying the importance of taking a balanced approach that will stem abusive patent practices while protecting the rights of current patent holders. However, the re-introduction of House Judiciary Chairman Bob Goodlatte’s (R-VA), the Innovation Act, H.R. 9, revives the same concerns from last Congress’ debate, without taking into consideration recent developments that have significantly reduced patent litigation filings.
Over the course of 2014, developments in the federal courts, at the U.S. Patent and Trademark Office (USPTO) through the implementation of the 2011 America Invests Act, and the Federal Trade Commission (FTC) significantly reduced patent litigation filings. Together, changes made through all of these institutions have already had an impact on abusive litigation and promise to reduce them even further as the full effects of these developments register. Certain provisions in the Innovation Act are potentially dangerous overreactions to the problem of abusive litigation and would make patent enforcement so risky and expensive that it could dry up innovation in certain sectors.
Any congressional effort to address abusive patent litigation practices that has the effect of making patent enforcement more risky, difficult, and expensive, will have a dramatic impact on these small businesses and startups that must be considered. Universities, medical device manufacturers, technology companies, and businesses of all sizes, from startups to Fortune 500 companies, are critically dependent on patents to protect investments of time, money, and other resources from both competition and imitation here and abroad. Especially for the thousands of venture-backed startup companies across a broad spectrum of industries, preservation of their ability to obtain and enforce patents is fundamental to survival.