Opening Statement

Floor Statement of Rep. Melvin L. Watt (N.C.)
General Debate in Opposition
H.R. 3309, the “Innovation Act”
December 5, 2013

          M. Chair—I rise in opposition to H.R. 3309.  The term “patent troll” has become convenient shorthand to refer to a class of plaintiffs who engage in abusive litigation tactics against deep-pocketed alleged infringers as well as individual inventors and small companies.  I recognize that there are entities that exploit financial asymmetries to gain leverage against businesses large and small that represent a vital part of our economy.  And I sympathize with their plight and hope that this Congress can find meaningful ways to arrest this behavior.  Unfortunately, H.R. 3309, the “Innovation Act,” adopts an extreme, unbalanced approach to address these abuses.

          The term “patent troll” simply has no concrete contours in application making it virtually impossible to craft legislation specifically targeting a category of entities or particular business model.  And, because not only “patent trolls” initiate litigation to enforce patent rights, legislation aimed at the patent litigation system must not erect unfair barriers that deter legitimate, meritorious claims of infringement.  Nor should it be treated as if it will apply only to the most troublesome jurisdictions in which such abuses are purportedly tolerated.  This bill applies to all litigants.  But the bill suffers from a rushed and insular process that responds to only one constituency of the patent litigation system and has resulted in a skewed product with inadequate public debate.

          What is most regretful and regrettable to me is that I believe that with thoughtful, inclusive deliberation, the goals of this bill are achievable.  The product before us, however, is destined to produce unintended, but foreseeable, adverse consequences. I will identify three:

          First, this bill creates perverse incentives that will invite further litigation abuse.  I have now been a member of Congress for almost as long as I was a practicing lawyer and I can tell you with absolute certainty that legal gamesmanship is not the exclusive domain of plaintiffs or even “patent trolls.”  By imposing lop-sided, disproportionate obligations on one side of the litigation equation, this bill creates harmful incentives on the other.  I can guarantee you that if this bill passes in its present form, there will be a subsequent lobbying effort to curtail abuses by bad faith defendants who may engage in dilatory tactics, swamp plaintiffs with data dumps in response to reasonable discovery requests, and otherwise drive up the costs of litigation.

          Second, another predictable, and I hope, unintended consequence of this bill is that it may saddle legitimate patent owners with exorbitant and duplicative fee awards due to sloppy drafting.  Section 3(b) of the bill mandates that a judge award fees to the prevailing party under certain circumstances.  Presumably the award will consist of reasonable costs and attorneys’ fees incurred to litigate the entire case.  However, section 4 likewise mandates an award of fees to a prevailing party when the non-prevailing plaintiff failed to comply with the transparency obligations under the bill.  This additional award is punitive and duplicative, and I hope a mistake.  And the escape hatches do not provide comfort.  Courts and legal commentators are loath to permit an exception to become the rule.  Instead, “special circumstances” or awards unless “unjust” are strictly applied to circumstances that are unique to the case and unusual in occurrence.

          Finally, and perhaps most invidious is the foreseeable possibility that this bill may become the victim of its own success.  In the effort to discourage litigation by increasing the risks and obligations of “patent trolls”, the bill may very well succeed in driving the trolls out of the courtrooms.  But it may also result in the most nefarious and persistent of the trolls retreating to an even more aggressive use of demand letters which this bill does nothing to prevent.  The end result will be that only legitimate patent owners will be subject to the onerous litigation reforms, while the unsophisticated individual or small inventor will face the very extortion this bill claims to address.

          This is a bad bill and I hope that my colleagues will vote to protect innovation by voting against this bill.  I yield back.