America’s Continued Lead in Innovation Requires Fixes to Flaws in Patent System
This week, in a remarkable speech to the National Academy of Sciences, President Obama laid out a bold vision for America to maintain its global lead in innovation. In his remarks, the President said, “Scientific innovation offers us a chance to achieve prosperity. It has offered us benefits that have improved our health and our lives — improvements we take too easily for granted.”I could not agree more that America can’t take innovation for granted. One of the most important ways we can ensure continued U.S. scientific leadership is to make needed reforms to our patent system. I had the honor of testifying today at a hearing of the U.S. House Judiciary Committee in favor of the Patent Reform Act of 2009 (HR 1260). My basic message was this: At a time when we must do everything possible to stimulate economic growth and job creation, the flaws in our patent law drain resources away from research and job creation, and toward unjustified patent suits. The longer we wait to address these widely acknowledged problems, the more we will sap the innovation and job creation potential of the tech industry.Our success as a country is a direct result of our ability to innovate. As I crossed the country from California to Washington to testify, I thought of the foresight of our Founders — I wondered what Thomas Jefferson, who had the vision to enter into the Louisiana Purchase, and send Lewis and Clark to explore, would think if he could have made that trip with me and looked down at all that has been done to build our country. And I was grateful that our Constitution empowered Congress to create a patent and copyright system to “promote progress in science and the useful arts.” By granting a powerful but time-limited monopoly to innovators, and ensuring that true inventors may benefit from their creativity, even against those who may have developed the same innovation independently, the patent system provides great incentives for research and development. But it’s important that manufacturers not be forced to pay “damages” if a patent should not have been granted in the first place, and that patent damage awards be based on consistently applied rules for valuing an invention. The reforms in this legislation are essential to remedy the defects that are preventing our current patent system from meeting that test.In my testimony, I signaled our support for HR 1260 because it will strengthen the patent system in three ways:• By harmonizing U.S. law with the standards applied by our major trading partners;• By improving patent quality through improvements to processes at the Patent and Trademark Office, therefore reducing the number of poor quality patents; and • By clarifying vague and uncertain litigation standards to ensure that patent litigation neither overcompensates nor under-compensates patent holders and the governing rules discourage, rather than encourage, the filing of abusive lawsuits. In sum, this is not an abstract debate about legal rules. Reform is urgently needed because the very real costs that unjustified lawsuits — and the unjustified claims that may be settled before they even turn into lawsuits — impose upon companies large and small are hurting the economy. As I noted to the Committee, most patent owners do not abuse the system. The source of the problem is primarily the litigation syndicates which have sprung up to buy patents that the inventors often thought were worthless, and who leverage the high cost of patent litigation and uncertainty in how damages will be calculated to try to extract payments.We’re pleased the Senate Judiciary Committee, under Senator Patrick Leahy’s strong leadership, took the first steps several weeks ago to propose approaches to dealing with the problem. I encouraged the Committee to approve HR 1260. The bottom line is that we remain flexible and open to suggestions that address the actual problem and are eager to reach consensus on a way to prevent this drain on job creation and also preserve America’s leadership.