It’s Time For Congress To Fix Frivolous Patent Lawsuit Abuse

By Andrew Ysiano - Publisher

A court gavel on 100 bills - legal concept

The Central Valley here in California has had a tough few years. Agribusinesses have seen thousands of jobs wiped out and billions of dollars lost in crop revenue. Our local, Latino owned businesses that have been a staple of our community for decades have struggled to stay afloat during the pandemic. At a time when many organizations are already facing various challenges from supply chain problems to labor shortages, they have been confronted by yet another hurdle: letters from “non-practicing entities” (sometimes called NPEs or patent trolls) demanding payment for supposed infringement on patents they own for very common processes.

These NPEs, or so-called trolls, are companies who exist only to purchase vague, low-quality patents, and threaten businesses with frivolous lawsuits. Already, agribusinesses have become victims of these baseless attacks. In one notorious example, Azure Farms, a family owned organic food farm, was one of hundreds of small businesses to be sued by an NPE over alleged patent infringement– just for having a website. For many small businesses, it’s cheaper and easier to pay off an NPE with a settlement than to go to court. With $29 billion lost in patent troll litigation each year, these growing, frivolous lawsuits have stymied our region’s innovation, directly hurting many Latino consumers and businesses in the process. 

Congress has long recognized the damage that NPEs can inflict on small businesses and took action to fix it in 2011 through the passage of the America Invents Act (AIA). The bipartisan bill established the Inter Partes Review (IPR) program, which gives businesses a cost-effective way to challenge patent trolls and the validity of low-quality patents. Reforms like these have led to a $2.95 billion increase in GDP, over $1 billion increase in personal income for everyday Americans, and allowed Central Valley businesses to use innovative technologies without worrying about an unjustifiable financial burden.

In recent years the AIA has been gutted by changes from the USPTO, undermining the original intent of the law. This includes dramatically weakening IPR by ignoring valid patent challenges. As a result, these alterations have allowed bad actors to continue weaponizing patents for their own financial gain, all while agribusinesses and small businesses across the Central Valley lose millions in litigation each year.

At a time when so many of our small businesses are struggling, we need Congress to take action again. Fortunately, there is bipartisan legislation that can help. Last year, Senators Patrick Leahy (D-VT) and John Cornyn (R-TX) introduced the Restoring the America Invents Act (RAIA). The RAIA will restore the AIA to its original intent of protecting innovators and small businesses by strengthening the IPR program, closing loopholes, and ensuring IPR petitions are heard.

The Central Valley can’t wait any longer for Congress to address the ongoing abuse of our patent system. Congress can fix this problem – they’ve done it before, and there is good legislation in the Senate right now that will help Latino owned businesses throughout the region. By passing the RAIA, we can ensure that our patent system reinforces high quality patents, dismisses low-quality patents, and continues supporting our agribusinesses, entrepreneurs, and rural manufacturers.

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