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Strengthening the Patent System by Ending Patent Abuse

Patent reform is top of mind on Capitol Hill this month as several Committees hold hearings to discuss the need for patent reform. BSA was honored to testify today at the Senate Committee on Small Business and Entrepreneurship. My testimony underscored the need for legislative action to curb abuses in the patent system.

The Small Business Committee is the ideal venue for an organization like BSA to present our views. Although our members range in size – from very small to large, each of them was founded by one or two individuals with passion, an idea, and a vision for making that idea a marketplace reality.

For BSA members, intellectual property is core to a successful and robust software industry. As some of the most innovative companies and largest patent holders in the world, BSA members value a strong, efficient and predictable patent system as an engine for continued innovation. Software related patents are especially important for our members and other small businesses in many sectors of the economy that rely on a patent system that is strong, predictable, efficient, and fair.

In today’s world, much of the innovation that is occurring comes through the development of better software, whether it is building energy efficient offices and homes, running factories more safely and productively, or making our transportation system more efficient. But BSA members are not only among America’s most innovative companies. We are also some of the biggest targets for abusive patent suits.

Patent litigation is enormously expensive, and the costs only continue to grow. A 2011 survey by the American Intellectual Property Law Association found that the median cost of a medium-sized patent litigation is approximately $6 million dollars per party, double the cost reported in 2009 and four times the cost reported in 2001.

These exorbitant costs make all businesses – regardless of size or whether they are plaintiff or defendant – think twice about litigating a patent suit. This dynamic is what enables abusive litigation to thrive and grow. But abusive litigation tactics serve none but the abuser: they do not create jobs; they do not deliver new products and services to consumers; and they do not contribute to our innovation economy.

Patent reform is a top priority for the software industry this year, and BSA is committed to working with lawmakers in both houses of Congress to end this frivolous litigation. By focusing legislative efforts on curbing abusive litigation tactics, we can deter opportunistic litigation while strengthening confidence and clarity in the patent system and the rights it protects.

Click here to download the full text of BSA’s testimony.

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