Debate around the patent system, and how we can fix it, is beginning to take shape in Washington, after many years of discussion in entrepreneurial communities around the country. Starting with last year’s introduction of the SHIELD Act, more and more people in Congress have made an effort to engage with entrepreneurs on this issue, and to work on finding solutions to the ongoing problem of patent trolls.
Recently, Texas Republican Senator John Cornyn joined the debate with well received draft legislation that would help on a number of fronts; Senator Cornyn released his plan after actively seeking the input of the entrepreneurial community in Texas.
Texas, especially Austin and Central Texas, benefit greatly from having a unique brand of stakeholders, and a community which fosters deep conversation and debate on important issues to foment growth. Under the direction of President Julie Huls, the team at Austin Technology Council is leading business engagement with policy issues, and deepening connections between tech businesses large and small in the political landscape. Last week, a number of these businesses came together to sign a letter to Senator Cornyn on the vital issue of patent trolling, and to express support for his leadership on this issue.
Engine is privileged to count ATC as a keystone partner of our regional organizing efforts, and we happily signed onto the letter which represents a broad spectrum of interested parties, with roots in Central Texas and around the country. The text of the letter is below. We hope this kind of engagement serves as a launching pad for similar efforts in entrepreneurial communities around the country. The input of technology leaders is critical to solving this problem, and policymakers are ready to listen.
Dear Senator Cornyn:
Thank you for joining the Austin Technology Council (ATC) and members of the Central Texas innovation community for the Patent Abuse Reduction Act (PARA) panel on May 30. We appreciate your leadership in combating patent trolls and look forward to supporting your efforts to develop meaningful patent reform in the 113th Congress.
Over the last two decades, the Innovation Economy provided 100% of net job growth in the United States. PARA’s focus on patent litigation reform is an important cornerstone of congressional support for continuing that success. Comprehensive intellectual property and patent reform – alongside talent, capital, data, and infrastructure innovation policy priorities – would enhance U.S. competitiveness, job creation, and economic stability.
As a leading innovation hub, Austin technology, innovators and related businesses deliver $21 billion and global visibility to our region each year. ATC and its members serve as a resource for all stakeholders interested in efforts to strengthen tech, foster innovation and sustain the benefits that both bring to our community.
ATC respectfully offers the following observations on PARA. Given the scope of technology and innovation interests in Central Texas, these observations reflect a community perspective on the impact of policy on innovation fundamentals. Individual community members may have additional policy priorities.
I. Overall, PARA provides an important step forward in addressing existing patent code’s greatest threat to established and early- stage innovators.
II. PARA provisions we consider to be innovation priorities and will support implementation of:
a. SEC. 2. PLEADING REQUIREMENTS. Requires more detailed infringement complaints so that trolls can’t get away with targeting an entire industry with unsupported boilerplate complaint letters.
b. SEC. 4. DISCOVERY LIMITS. Corrects the huge imbalance in discovery costs that trolls use to pressure businesses into settling.
III. We encourage and will support your efforts to strengthen these PARA provisions:
a. SEC. 5. COSTS AND EXPENSES. Fee-shifting strengthened with a bonding requirement. Many trolls are “judgment-proof” shell companies with no assets. A plaintiff bonding requirement will give businesses a real chance to recoup the millions spent defending against an egregious, meritless lawsuit.
Because of the complexity of this problem, it will take a number of reforms complementary to PARA to balance the one-sided advantage that patent trolls currently enjoy. Several bipartisan bills and discussion drafts are circulating in Washington, some of which are simple, viable, and would enhance legitimate patent holders’ ability to enforce their rights and protect consumers and small businesses from becoming targets. We support your efforts to lead the development of a comprehensive package of litigation reforms that will help technology companies and America’s innovators defend themselves against frivolous litigation.
Thank you again for allowing us the opportunity to outline our support for your efforts on behalf of Texas and U.S. innovation.
Image courtesy of Gage Skidmore.