On July 13, 2017, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet held a hearing, titled “The Impact of Bad Patents on American Businesses.” A recording of the hearing, which I attended, is available at: https://www.youtube.com/watch?v=VaJpVmsLO6U.
The witnesses who testified before the subcommittee included:
- The Honorable Paul Michel, Former Chief Judge at the United States Court of Appeals for the Federal Circuit;
- Mr. Tom Lee, Geocoding Team Leader at Mapbox;
- Mr. Sean Reilly, Senior Vice President and Associate General counsel at The Clearing House; and
- Ms. Julie Samuels, President of the Board of Directors at Engine.
The testimony of each witness can be accessed by clicking on the highlighted links above.
Additionally, below are several photographs from the hearing:
Following the hearing, House Judiciary Committee Chairman Goodlatte issued the following statement:
When I became Chairman of the House Judiciary Committee, I placed a priority on reducing litigation abuse wherever it occurred. As the Committee that oversees our nation’s federal judicial system, the Judiciary Committee must fight all abuses of our nation’s judicial system whether abuse occurs in the patent system or elsewhere. Litigation abuse degrades the confidence of Americans that the Judicial Branch is there to assist resolving disputes in a fair manner, especially when they are faced with the potential for a business ending damage award due to a frivolous lawsuit.
Unfortunately, a small number of bad patents that should never have been granted in the first place have been used by some to harass American businesses. Small and medium size businesses nationwide have been on the receiving end of demand letters over questionable patents for common technologies long in use such as podcasting, electronic shopping carts, and document scanners. The demand letters typically include a settlement offer that is lower than the cost of retaining a lawyer to begin litigation. The patent trolls, as they are known, then move on to their next victim.
For businesses that had planned on expanding by hiring new employees, the troll has already ended their ability to expand by diverting money away from the human resources department to the legal department.
Four years ago, I introduced the Innovation Act to address the litigation abuse problems that could not be solved by the America Invents Act. The Innovation Act then passed the House by a vote of 325-91 reflecting a bipartisan desire to end such abuse. Although the legislation became stuck in the Senate, the Supreme Court was able to step in to unanimously resolve some, but not all, of the litigation abuse problems that were to be addressed by the Innovation Act.
Just a few weeks ago, the Supreme Court in its TC Heartland decision concurred with Congressional enactment of a patent specific venue provision in Title 18. This decision was expected to lead to a sharp reduction in cases being filed in one particular district in Texas that seems skilled at attracting patent trolls. Unfortunately, one judge in this district has already re-interpreted both the law and the unanimous Supreme Court decision to keep as many patent cases as possible in his district in defiance of the Supreme Court and Congressional intent.
Also unfortunate is that there are some who are now calling to undo much of the progress that has been made on patent litigation reform. Simply put, their efforts and their views of what makes for a strong American patent system are misguided. A strong patent system IS NOT one that enables patents that should never have been granted in the first place to be used as a weapon against American businesses, destroying American jobs in the process. A strong patent system IS one that has robust mechanisms in place to weed out bad patents and to deter abusive patent litigation from happening in the first place, while facilitating the owners of properly awarded patents in seeking the compensation they deserve when their patents are infringed.
As the Administration undertakes its search for a new PTO Director, I look forward to working with them and their choice of a new Director to build up the good work that this Committee has done along with the positive impact of several unanimous Supreme Court decisions. America needs a strong patent system where bad patents are weeded out and litigation abuse is sharply curtailed.
The hearing was well attended, and lasted about two hours.