Need for Patent Reform

A strong and balanced system of patent protection is essential to promote U.S. innovation in today's fast-paced global economy. To encourage innovation through cutting edge research and break-through technologies, patent protections must reliably guard inventions, while not intentionally stifling technological progress or incentivizing harmful speculation. Our patent system must be reformed to reach its goal of promoting innovation for the good of inventors, consumers and the economy. The current system is allowing baseless patent claims to be made for the purpose of exploiting loopholes and imbalances in the patent system. These complex cases cost millions in legal bills and can coerce large settlements that cost upwards of $100 million or much more for claimed "inventive contributions" that represent a miniscule part of targeted products. These costs, and the system that allows them, deter innovation in several ways. Business must redirect valuable financial resources that might otherwise go toward innovation and job creation. Engineers are spending time in depositions and doing defensive patenting, instead of creating the next great invention. Companies are increasingly becoming risk averse in this environment; they may decide not to bring new products or services to market because they do not want to incur the additional costs that result from an abusive patent claim. And all of these costs are eventually shouldered by consumers buying the products we use everyday in the form of a hidden "innovation tax." The patent system must also accurately reflect the complexity of today's technology and economy. The major part of U.S. patent laws were shaped in the 1950's, a time when highly integrated global markets were not the norm and the modern technology revolution had not yet begun. The networked, interoperable devices on which our economy today relies were more science fiction than everyday reality. In addition, the number of patents issued annually in the early '50's was less than one-quarter of today's volume. And then, patent litigation was a tool of last resort, not first resort. Things have dramatically changed since those days. In order to maximize innovation and keep the U.S. competitive, our patent system needs to reflect the 21st century economy that drives the world economy today. This requires broad, comprehensive reform by Congress. Like two sides of a coin, the problems with the current patent system � poor patent quality and abuse of the patent system in our courts � are interconnected and must be addressed together. Dedicated patent examiners work hard to do the best work possible under difficult circumstances. But outmoded procedures, insufficient training, and lack of resources result in a substantial number of problem patents issued each year. In addition to questions of patent quality, the manner in which existing patents are abused in the courts is problematic. New legislation is urgently needed to strengthen and reform patent law, both to improve patent quality and to deter abuse of the system.

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