House Judiciary Committee Ranking Member John Conyers, Jr. Opening Statement on Patent Reform

WASHINGTON - Today, during a House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet hearing on “Patent Reform: Protecting American Innovators and Job Creators from Abusive Patent Litigation,” Ranking Member John Conyers, Jr. (D-MI) issued the following opening statement:

Dean of the U.S. House
of Representatives
John Conyers, Jr.

“Today’s hearing provides yet another opportunity to examine the issue of abusive patent litigation and why a targeted legislative approach is necessary.

“One of the first issues we must consider is how legislative proposals to stop abusive patent litigation can impact small businesses, the start-up ecosystem, and innovators. Small businesses and others who rely on patents require strong intellectual property protections. We must not weaken those rights.

“Our innovators – whether they create their inventions in their garages or basements or as a group in an incubation hub – recognize that their patents and the ability to protect them through enforcement in the courts is a critical factor in whether their businesses will be a success or a failure. Indeed, some angel investors and venture capitalists require ideas to be patented before investing.  But, they may very well be dissuaded from investing if there is a risk that a court will not uphold the validity of those patents or, at a minimum, there will be substantial litigation costs entailed.

“This means that fledgling entrepreneurs will never get off the ground and become a flourishing business employing thousands of Americans, such as Overstock, which is one of our witnesses today.

“Overly broad legislation could engender more rather than less litigation and weaken patent enforcement protections, thus discouraging investments in innovation.

“Instead, we should take a cautious approach and not push solutions – such as H.R. 9, the ‘Innovation Act’ – that may end up doing more harm than good to our start-up ecosystem. One way to stop abusive patent litigation is to address the problem of the extortionist use of demand letters.  So, I want the witnesses to discuss how we can curb the abusive problem of demand letters.

“Patent litigation opportunists exploit the patent process and patent litigation system.  In particular, they attack patents of weak quality in order to obtain quick settlements or to bleed the alleged infringers. Individual inventors and small businesses have to decide whether to risk incurring potentially overwhelming costs of litigation or enter into a settlement which could make them liable to attack by other abusive patent litigants.  We must find a way to stop this insidious problem that threatens the strong culture of innovation in our Nation.

“Finally, the Committee needs to conduct further hearings on the changing landscape affecting patents before we take any congressional action.

“While I applaud the Chair for holding a hearing last month on recent Supreme Court decisions in the patent arena, the Committee should also hold additional hearings on what actions other government stakeholders are taking in the patent arena.

“For instance, we should hear from Michelle Lee, the newly appointed Director of the United States Patent and Trademark Office to hear her views about how we should address abusive patent litigation. In addition, Director Lee could enlighten us about the conclusions from the Patent Quality Summit that her Office is hosting today and tomorrow. The Director could also update us on how her Office is implementing the America Invents Act.

“We should also hear an update from the Federal Trade Commission about its efforts to combat abusive patent litigation behavior.

“Further, the Judicial Conference could share its expertise at a hearing on the effectiveness of lower courts recently adopting model discovery orders or discovery guidelines that limit discovery in patent lawsuits.  The Conference could also inform us of the actions the Supreme Court is taking to eliminate Federal Rule of Civil Procedure Rule 84 and its Form 18, which will lead to the higher pleading requirements of Twombly and Iqbal. It could also update us on other proposed amendments to the Federal Rules of Civil Procedure aimed at achieving proportionality in discovery and promoting early and active judicial case management.

“These efforts may better address abusive patent litigation in a more targeted approach than the overly broad approach taken by the Innovation Act. Congress must respond to the problem of abusive patent litigation, but it should do so in a more balanced and effective approach that protects our Nation’s entrepreneurs and innovators.”

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