NCPA - National Center for Policy Analysis

A Measured Approach to Patent Reform Legislation

August 19, 2015

Patent reform legislation is being considered by the both the U.S. Senate and House. The goal is reining in "patent-troll" firms that purchase others' patents solely to threaten third parties with costly lawsuits, according to Alden Abbott and John Malcolm of the Heritage Foundation.

Over the years, the basic principles of the patent system have not changed:

  • It authorizes patent holders to pursue remedies against unauthorized use of patented invention.
  • Patent holders can sue infringers to obtain monetary damages or injunctive relief. 
  • The patent holder can ask the United States International Trade Commission (ITC) to block the importation of infringing articles.

Patents are treated similarly to any other piece of property: They can be bought and sold on the open market, and what a holder does with a patent is his business.

The America Invents Act of 2011 (AIA) overhauled the patent system and made it easier to question patents in a relatively low-cost and fast post-issuance administrative proceeding, rather than a high-cost lawsuit.

"Patent trolls" (also known as "patent assertion entities") is shorthand for bad actors who abuse the patent litigation system. Although patent trolls undoubtedly have been responsible for wasteful lawsuits, the extent to which they actually have spawned a serious patent litigation problem is very much in question.

There are many other reasons why a patent holder might file a legitimate infringement lawsuit even though it is not itself manufacturing a product that incorporates that patent at that time.  If action to curb troll abuses is warranted, major legislative overhauls could have had unanticipated consequences, many of them harmful.

Congress is considering a large number of reforms that would substantially affect patent litigation in the United States.  Before deciding to take action, say Abbott and Malcolm, Congress should weigh the particular merits of individual reform proposals carefully and meticulously, taking into account their possible harmful effects as well as their intended benefits.

Source: Alden Abbott and John Malcolm, "A Measured Approach to Patent Reform Legislation," Heritage Foundation, July 14, 2015.

Sponsored Links: Freshco FlyerNo Frills FlyerFood Basics Flyer


Browse more articles on Government Issues