Frivolous patent litigation is stifling technological innovation in the United States, according to William J. Watkins, Jr., a research fellow at The Independent Institute.
"Our patent system is broken, it needs correction, innovation is stifled, and some reform is definitely needed," Watkins said Wednesday to Joe Concha, guest host of "The Steve Malzberg Show" on Newsmax TV.
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"Right now, the patent office is hugely backlogged, it takes five years usually for an application to clear. That makes it very difficult on innovators if they have a new idea to get something going quickly and the way technology moves, you have to do something quickly or you'll be out of date."
Taking advantage of the backlogs are what are called "patent trolls," who obtain patents sold at auctions by bankrupt companies or collect research to prove they had an idea first without any plan to actually manufacture. They then sue companies for patent infringement.
"You have entities holding large numbers of patents, not to make anything, not to have a new process to invent, but to sue. It's a litigation game, it's a racket, it's a shakedown," said Watkins, co-author with William Shughart II, of "Patent Trolls: Predatory Litigation and the Smothering of Innovation,"
published by Independent Institute.
"They can sue on that or they go to bankruptcy auctions, get old, outdated patents and sue anyway just claiming there's some tangential relation between the old patent and the new process that's out there.
"Patent litigation costs over a $1 million to take a case to trial. Who can defend that?"
In addition, allegations have surfaced that some federal patent examiners are collecting pay and bonuses for time they didn’t work, according to The Washington Post.
The Post said time and attendance fraud are "common practices for some of the government’s highly paid patent examiners, thousands of whom work from home."
"Congress is investigating, demanding all of the documents and so forth. Something will come to light, but not as yet," Watkins said.
"There has to be accountability for these employees."
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