This week as we mark National Small Business Week, it is important to acknowledge the crucial role small businesses play in the American economy. Small businesses account for a significant majority of new product ideas and innovation. They are the engines of job creation with 60 to 80 percent of all new jobs coming from small businesses.
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As Americans look for ways to end economic uncertainty and guarantee future growth, we must find ways to protect and promote small businesses by reducing the burdens they face.
One significant challenge that America’s small businesses are facing today is an exponential increase in the use of weak or poorly-granted patents by so-called patent trolls to file numerous patent infringement lawsuits against businesses with the hopes of securing a quick payday. Many of these are focused not just on larger companies, but small and medium-sized businesses as well. These suits target a settlement just under what it would cost for litigation, knowing that these businesses will want to avoid costly litigation and likely pay up. The patent system was never intended to be a playground for trial lawyers and frivolous claims.
Abusive patent litigation is a drag on our economy. This may seem like a complex issue, but the fact of the matter is that this is a problem impacting businesses and industries of all types and the jobs of the people who work for them. Everyone from independent inventors, to start-ups, to mid- and large-sized businesses face this constant threat. The tens of billions of dollars spent on settlements and litigation expenses associated with abusive patent suits represents truly wasted capital – capital that could have been used to create new jobs, fund research and development and create new innovations and technologies. Not to mention when a business of any kind is forced to pay off patent trolls it also increases the cost of doing business. Those increased costs are passed on to consumers in the form of higher prices for goods and services.
Last year, I introduced the Innovation Act, legislation designed to eliminate the abuses of our patent system, discourage frivolous patent litigation and keep U.S. patent laws up to date. In December, the House of Representatives, with overwhelming bipartisan support and the support of the White House, passed the Innovation Act. This important bill will help fuel the engine of American innovation and creativity, creating new jobs and growing our economy. Effective patent reform legislation requires the careful balance that was achieved in the Innovation Act.
It is now time for the U.S. Senate to act. The Innovation Act, which was publicly vetted over the course of many months and has the support of 325 members of Congress and the President, is the place to start.
The patent system is central to the United States’ competitiveness, job creation and future economic security. It is designed to protect and promote American innovation and if the U.S. is to remain competitive in the global economy, it is critical that we address the harm caused to American businesses – large and small — by abusive patent litigation.
The Innovation Act has helped set a clear bipartisan roadmap toward eliminating the abuses of our patent system, discouraging frivolous patent litigation and keeping U.S. patent laws up to date.
