The proper patent troll repellent is used sparingly

  • Article by: BRIAN HERMAN
  • Updated: May 2, 2014 - 6:55 PM

Remember, patents make it possible to invest in invention.

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Minnesota is home to some of the most innovative independent inventors, university researchers and corporate scientists in the world. From the Post-it note to Ziagen (one of the leading anti-HIV drugs), Minnesota inventors have improved millions of lives worldwide.

Investing in the research and development necessary to turn inventions into products is always risky, whether it’s done by an independent inventor, a university or a company. The costs can be high, success is uncertain and any payoff may be years away.

Yet continued investments are critical for U.S. economic growth and job creation, and they would be impossible without patents. Patents provide the legal protection that inventors, companies and their investors need to obtain a fair return on inventions. Patents provide a legal foundation upon which innovators can invest safely in research, development, manufacturing and jobs, and upon which they eventually can turn inventions into businesses.

According to a study by the U.S. Department of Commerce, intellectual-property-intensive industries support at least 40 million jobs and contribute more than $5 trillion to the nation’s gross domestic product. Such industries account for more than 27 percent of U.S. jobs, more than 34 percent of GDP and more than 60 percent of merchandise exports.

Still, the strength of America’s patent system is being threatened. In the rush to curtail so-called “patent trolls” — those who acquire patents solely to extract undeserved settlements from the often small- and medium-sized businesses they target — some proposals in Congress exceed what is necessary to address legitimate concerns. Some proposals would weaken all patent rights and make it more difficult for all inventors, universities and research-based companies to enforce their patents.

Frivolous litigation has no place in a strong and well-functioning patent system. But not every patent holder is a patent troll. Not every infringement case is unfounded. Often, patent owners find that an infringement lawsuit is the only way American innovators or manufacturers can prevent others from benefiting unfairly from R&D investments or stop knockoffs from destroying their businesses.

The patent bill passed by the U.S. House of Representatives last December goes too far in an attempt to rein in patent trolls. Some of its provisions risk unintended consequences that would seriously damage the patent system overall. Drafting legislation based on the premise that patent holders who wish to enforce their rights are patent trolls, or based on the rhetoric that the patent system is somehow broken, weakens all patents, favors business models that do not rely on innovation and tilts the balance in favor of patent infringers. Ultimately, such action places R&D investments and innovation at serious risk.

Fortunately, U.S. Sens. Amy Klobuchar and Al Franken and some of their Senate Judiciary Committee colleagues are crafting a patent bill that aims to adopt balanced, measured reforms to curb litigation abuses. Their approach will maintain the enforcement rights of all patent owners.

We applaud the senators for supporting passage of the right patent bill — one that supports innovation across our economy. The right bill will garner widespread support across industries and from independent inventors and universities. It cannot pick winners and losers among different industries, business models or types of patent owners.

We encourage senators to deliberate carefully and use restraint and caution on patent reform. We must fully consider the impact of proposals that may make it more costly, protracted or uncertain to protect patented technology or products against infringement. Our guiding principle for patent reform should be, first and foremost, to do no harm to the most innovative economy the world has ever seen.

 

Brian Herman is vice president of research at the University of Minnesota.

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