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The patent system must be fixed to stop patent trolls and promote innovation

Posted: April 9, 2014 |   Comments

( The United States Constitution gives Congress authority to create patents and copyrights, but only for the specific purpose of promoting "the sciences and useful arts." The purpose of patents is to incentivize innovation and content creation, by ensuring that inventors have an exclusive right to use their developments for a set amount of time. However, when the patent system is ill-managed, as it has been in recent years, it can stifle innovation and content creation.

James Madison warned Americans over 200 years ago that copyrights and patents must be "guarded with strictness against abuse," because they are so easy to abuse. The type of abuse that Madison warned us about then is now becoming increasingly prevalent. The most notable abusers of the patent system in recent years have been called "patent trolls." Patent trolls are people or companies that obtain an obvious or frivolous patent for a technology that they often don't even use; instead, they go after those that actually do use the technology, in some way or another, to contribute to society, extorting them for money with threats of costly litigation. Advocates for businesses and American innovation have brought much attention to patent trolls recently, but in order to solve the problem, the patent system itself must be fixed.

The Federal Trade Commission released a report in 2003 which stated:

Poor patent quality and legal standards and procedures that inadvertently may have anticompetitive effects can cause unwarranted market power and can unjustifiably increase costs. Such effects can hamper competition that otherwise would stimulate innovation.

Patent trolls now cost the economy more than $29 billion per year, according to Derek Khanna. He reported at that "instead of seriously solving the holistic problem of junk patents, Washington is avoiding going after the big players that have large patent portfolios for non-inventions. While big companies with large patent portfolios are increasingly coming around to supporting the idea of dealing with patent trolls, not surprisingly, they thus far have opposed legislation to solve the bigger problem that helps enable patent trolls."

We should now heed Madison's warning and pressure legislators to fix our nation's patent laws. Khanna concludes, "We need a system that compensates content holders and inventors, and clearly defines the rules of the roads, but does so for the constitutionally-enumerated purpose of spurring innovation and content creation, not at the costs of inhibiting them."

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