Patent trolls turn innovation- drain resources from startups and deter future investment in R and D

served as U.S. Ambassador to the People’s Republic of China from 2014 until 2017, and as a U.S. Senator from Montana from 1978 until 2014; It’s Time for the U.S. to Tackle Patent Trolls; Harvard Business Review;

Yet, there’s another significant challenge facing our innovation economy, one that often goes under reported. Abusive patent lawsuits against some of our most innovative companies are on the rise, forcing more and more successful businesses to delay hiring new workers, raising wages, and developing new products. Instead, they’re forced to spend money defending themselves against meritless accusations. The wealthy investors who file these abusive lawsuits, and are often referred to as “patent trolls,” buy up portfolios of broad, unused patents that, in many cases, the U.S. Patent & Trademark Office (USPTO) never should have issued in the first place. They then assert the low-quality patents in lawsuits to accuse others of patent infringement – all this even though the patents being asserted will continue to go unused. The impact on American innovation is devastating. According to one study, each year, patent trolls create $29 billion in direct, out-of-pocket costs from the companies they go after. Another study found that the companies that settle with patent trolls, or lose to them in court, wind up reducing investments in research and development by an average of more than $160 million over the next two years. Massive amounts of money are being drained from the hardworking people who are driving our economy forward to instead line the pockets of wealthy investors who are offering no goods or services of their own.