Has Innovation In The U.S Ever Needed The Innovation Act?

Protecting innovation in the U.S is harder than you might think


Reforms in the innovation field have always been a hot topic in the United States. According to the Innovation Rankings Index for the US and the World, other countries are fostering innovation more effectively than America. Number one is Switzerland, followed by Sweden and the UK, with the US only coming fifth. While the US has a large number of the businesses that deal with innovation, the country is lacking an efficient way of legally protecting the American innovation sector.

Intellectual Property rights are usually a huge point of contention between inventors who want to patent their products and those with a nefarious agenda who want to violate their rights. The protection system is not perfect, but it is questionable whether a reform like The Innovation Act can help. In an ideal world, legal actions would be limited and focused on specific abusive behavior, rather than having a broad approach on procedural aspects of enforcing patents.

Patent acts vary considerably depending on the country. Whether there is an actual threat of someone trying to steal intellectual property or just attempting to bring the case to court on a flimsy technicality, it is highly likely that it will influence the commercial conduct of the defendant. That is why, for instance, the law in the UK states that making a groundless threat to sue within certain carefully prescribed limits, is illegal.

However, in the US, the situation is completely different. Currently, patent owners – who are not necessarily the inventors - can allege patent infringement and file lawsuits without specifically identifying how the defendant has infringed upon the patent upfront. Unfortunately, it is not until the discovery stage that these details are revealed. By that time, a great deal of time and money will have been invested in a case that may not have merit. In the end, many defendants settle just to avoid tremendous financial loss.

When someone is groundlessly trying to sue for patent infringement, it is called patent trolling. Patent trolling remains one of the biggest problems in the patent protection system in the US Trolling is not going to stop innovation, although it is playing on everyone's nerves. Due to this, several parties are trying to enforce various patent reforms to improve the situation, and The Innovation Act is one of them.

Introduced in May 2015, it was designed to stop patent holders who use abusive litigation tactics to bully businesses into settling patent lawsuits. The Innovation Act is intended to add transparency and reduce the number of trolling lawsuits. However, it has still not passed the introduction phase because opposition voices are becoming louder. If the Act is designed to protect inventors from trolling, then why are so many people against it?

Opponents of the act believe that it is nothing more than a way of stopping small businesses and startup founders having a fighting chance of competing with larger and more powerful companies. However, the large organizations such as Apple, Hewlett Packard, Samsung and AT&T are often victims of patent trolling as well. For instance, Apple had over 170 lawsuits against it related to this so far.

Those who advocate intellectual property rights also think that The Innovation Act would have a negative impact by affecting the readiness to invest in innovation. Among other things, it would make investors liable if a patent infringement case is lost. This could cause complications in early stage funding of innovation and startups. As a result, advocates presume that it would slow the US economy.

We can clearly see that the problem of patent trolling is a disruption for small businesses and startups. Even if The Innovation Act is not going to pass the hearings, it is still a positive sign that this problem is being widely discussed. The fact that it has managed to bring together different opinions means that society cares, and there are visible attempts to resolve the issue. Both sides of the debate have a right to exist and to be heard, but The Innovation Act needs to add more clarity to its content so it doesn't raise questions about its sincerity. 

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