The RESTORE Patent Rights Act, introduced in July by a bipartisan group of senators and representatives, would be a pivotal legislative milestone for promoting innovation, if enacted into law. This bill would reestablish injunctive relief as the default legal remedy for patent infringement, preventing patent infringers from using others’ IP and ultimately facing little more than the consequence of having to pay the royalty they should have paid anyway, enabling those with the financial might to steal technology from smaller competitors. In doing so, it would empower America’s small innovators to continue developing innovative products and bolster our nation’s economic competitiveness.
On September 10, former Congressman Trey Gowdy (R-SC) published an op-ed in the Washington Examiner opposing this bill on the basis that it would harm American manufacturers and benefit foreign adversaries. However, his argument relies on several factually inaccurate claims:
| Claim: “The RESTORE [Patent Rights] Act… tries to solve a problem that does not exist.” |
| In reality: The inaccessibility of injunctions to victims of patent infringement has become a substantial problem since the Supreme Court’s 2006 decision in eBay v. MercExchange. Following the eBay decision, grants of permanent injunctions in patent infringement cases have fallen by more than 66% for operating companies and by over 91% for non-practicing entities. The increased difficulty of obtaining injunctions has created substantial opportunity for large companies to copy other companies’ patented technology instead of paying for a license. Then, when caught, these infringers use their significant financial resources to wage drawn-out legal battles against their victims. This situation is untenable for our innovation ecosystem. In order to thrive, small, innovative companies need full ownership of their intellectual property, which entails the right to stop others from illegally making use of it. The RESTORE Patent Rights Act would solve exactly this problem by ensuring that companies that have their patents infringed are able to obtain injunctive relief. |
| Claim: The RESTORE Patent Rights Act would grant an “automatic injunction” to petitioners. |
| In reality: The RESTORE Patent Rights Act would not grant an “automatic injunction,” but simply reestablish the presumption that patent infringement constitutes a type of irreparable harm that should be rectified with an injunction. This presumption was the established precedent prior to the Supreme Court’s decision in eBay. However, under the RESTORE Patent Rights Act, companies accused of patent infringement would still have the opportunity to raise claims against this presumption in court, while companies seeking an injunction would still have to prove infringement and the validity of their patent, if challenged. Therefore, in the words of legal scholar and patent law professor Kristen J. Osenga, “the presumption of an injunction [in cases of patent infringement] is not automatic, because it is rebuttable by the defendant.” Claims that the RESTORE Patent Rights Act would grant injunctions automatically fail to recognize that the behavior of the infringer is ultimately what determines whether an injunction is granted. |
| Claim: The RESTORE Patent Rights Act would empower bad actors “to abuse our courtrooms with impunity.” |
| In reality: The post-eBay status quo already allows significant potential for abuse by bad actors, which would be reduced by the RESTORE Patent Rights Act. Under the status quo, as described previously, deep-pocketed companies and those backed by wealthy interests are able to engage in expensive litigation and can readily afford to pay monetary damages if caught infringing patents. On the other hand, under the RESTORE Patent Rights Act, these companies would have less of an incentive to infringe patents because if an injunction is granted, they will lose access to the patented technology instead of simply losing money. If the RESTORE Patent Rights Act becomes law, it will help to nullify the current advantages that wealthy businesses currently enjoy in patent litigation — ensuring that the companies that produce innovative and original products are able to succeed in the marketplace and making it more difficult for predatory and ill-intentioned competitors to “game” the legal system. |