Venture Industry Raises Concerns with Goodlatte Patent Litigation Reform Bill

WASHINGTON, DC – The National Venture Capital Association (NVCA) issued the following statement today after Rep. Bob Goodlatte (R-VA), Chairman of the House Judiciary Committee, introduced his patent litigation reform bill, the Innovation Act.  Other original co-sponsors of the bill include Reps. Peter DeFazio (D-OR), Darrell Issa (R-CA), Jerrold Nadler (D-NY), Lamar Smith (R-TX), Zoe Lofgren (D-CA) and Anna Eshoo (D-CA).

“We appreciate Chairman Goodlatte and his colleagues for reintroducing the Innovation Act and believe it includes several helpful provisions to curb abuses in patent litigation.  However, as was the case when the bill passed the House during the last Congress, we have concerns with certain provisions in the bill which we believe would make patent enforcement so risky and expensive that it could dry up innovation in certain sectors,” said Bobby Franklin, President & CEO of NVCA.  “We are particularly concerned that the bill’s fee shifting provision would have a devastating impact on small startups trying to enforce their patents against larger incumbents and on small companies facing legal challenges by larger, well-financed competitors.”

“Although startups vary in the extent to which they rely on patents, many innovative companies require strong patent protections to prevent others from copying their innovative ideas and will not survive otherwise,” added Franklin.  “Should Congress move forward with patent reform legislation, we believe it’s critical that lawmakers balance the need for patent litigation reform with the needs of those startups that depend on strong patent protections to ensure their survival.  We also believe Congress should take into consideration recent developments in the federal courts as well actions taken by the U.S. Patent & Trademark Office and the Federal Trade Commission, which collectively have reduced significantly the number of new patent cases and promise to reduce them even further as their full impact begins to be felt.”