2014: The Year to Finish Patent Reform

Patent reform is a topic we often writeabout at ACI, and 2013 turned out to be a good start for patent reform—but there’s much left to be done in 2014. This past year first saw a strong reaction from the tech community to put an end to patent trolls, banding together to send letters to Congress demanding action. Tech giants like Google and Microsoft worked with organizations like the Internet Association, the Chamber of Commerce and the Application Developers Alliance to get some sort of reform done, to protect the interests of innovators and consumers.

Then, we saw the rise of industries not normally associated with patent reform rise up—as they too became victims of patent trolls. Companies from the restaurant, airline and even supermarket industries wrote Congress calling for action, as patent trolls began suing these companies for commonly used technology such as maps being used on websites.

This all prompted Congress to finally take action. Earlier this year, legislation known as the Innovation Act was introduced by Rep. Goodlatte (R-VA) and Rep. Lofgren (D-CA). This legislation, which would institute things such as loser-pays, passed the House in December 2013, moving over to the Senate where it’s awaiting action.

We talk often about the harm that patent trolls cause to small businesses and innovation—at least one-third of all startups have been threatened with a patent violation. The cost to defend these lawsuits can be especially detrimental to young startups, who don’t have the time or financial resources to devote to fending off patent trolls. For some, it does them in.

And the threat of a lawsuit continues to grow, as the number of lawsuits filed by patent trolls has quadrupled since 2005.

This all obviously has a detrimental affect on the consumer—as the costs to startups or established companies goes up, so too does the cost passed onto the consumer. The consumer also potentially misses out on the new goods and services being stopped by these frivolous lawsuits.

Congress should see to it that 2014 continues in the right direction that was set this past year. There’s a new incoming director of the patent office, which could be a good sign for future reforms. If the Senate takes action on the Innovation Act, we could see a patent reform bill on President Obama’s desk that could inflict real damage on the patent troll industry.

Let’s hope so, for the sake of the economy, innovators and inventors, and consumers.

Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research

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