Op-Ed: Rep. Trey Gowdy: Patent proposals would be an early misstep for the new administration
Quality patents have allowed large and small businesses in my home state of South Carolina and elsewhere to make critical breakthroughs in high-tech innovation. Whether it’s automobile manufacturing, health care technology, or software, inventors and businesses rely on a system that defends their inventions while also ensuring that low-quality patents don’t block competition or get leveraged against them in lawsuits.
That’s why businesses across the country have raised concerns about three pieces of proposed legislation — the Patent Eligibility Restoration Act (PERA), the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act), and the Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act. As President-elect Trump prepares to take office, these bills threaten America’s hard-won economic growth.
For starters, PERA would reverse long-established judicial consensus by expanding what is patentable to include concepts that were previously considered too abstract to patent — concepts like naturally-occurring phenomena and genetic information.
When the government grants a patent, it is, in essence, granting the owner a monopoly. If these monopolies become overly abstract, the outcome is decreased competition, increased litigation, and higher prices for consumers. Look no further than the pharmaceutical industry. PERA would make it easier for drug companies to keep prices artificially high by shrouding their products in webs of low-quality patent “thickets” which keep generic alternatives out of the marketplace. For Americans already struggling with the high costs of prescription drugs, this is a guaranteed way to make their economic lives more difficult.
Meanwhile, the PREVAIL Act proposes a series of changes which would make challenging invalid patents more difficult. When I entered Congress in 2011, I voted for the America Invents Act (AIA), a bipartisan reform to our patent system. The AIA created an expert review system at the U.S. Patent and Trademark Office (USPTO), where members of the public can challenge patents’ validity. These reviews resolve disputes more cheaply and efficiently than intellectual property lawsuits, allowing economic activity to continue unabated without bad actors in the patent system using patent infringement accusations for their own financial gain. But the PREVAIL Act would curtail access to USPTO review, allowing more broad and vague patent claims to be enforced despite their low quality, and in turn making it harder for inventors to operate in the competitive marketplace.
Lastly, the RESTORE Act would reverse unanimous precedent established in the Supreme Court’s 2006 decision in eBay v. MercExchange and presume injunctive relief across all patent infringement damages rulings. When injunctions are granted as a blanket practice, it allows bad actors to make massive settlement demands regardless of whether they have been wronged.
Under the RESTORE Act, “patent trolls” — entities which produce nothing and exist only to sue others — can claim infringement on one minute component of a multi-part production process, and potentially shut down the manufacturing of an entire product indefinitely, if they get an injunction. Many manufacturers will capitulate to the trolls’ meritless settlement demands rather than put their facilities and workers’ futures at risk.
Maintaining and growing our economy means prioritizing American businesses and inventors, not litigation manipulators, competitors like China, or big Pharma, which benefit when patent quality and quality checks in our patent system are diminished. Moreover, while our fellow citizens are battling burgeoning inflation, millions of working and middle class Americans need a patent system that works for them, not companies who seem to profit regardless of whether average Americans are paying more for necessities like medicines.
As for the new Congress, new and returning members will soon find themselves facing competing priorities across committees and policy areas. For the sake of the American economy, members of the new Congress should focus on continuing pro-growth policies that protect our inventors and our intellectual property system, not on policies that will set back our innovation economy at this crucial juncture.
Trey Gowdy represented South Carolina’s 4th District in the U.S. House of Representatives from 2011-19. Prior to serving in Congress, he was a federal prosecutor and solicitor in South Carolina.
