As Russia’s invasion of Ukraine stretches into another week, and further strains Taiwan-China relations, Americans are increasingly anxious about the impact of these events on their daily lives. This uncertainty underscores the need for quick action at home to ensure our long-term economic and national security. Indeed, the past two years have exposed glaring weaknesses in America’s supply chains, especially our dependence on semiconductors produced overseas.
Increased consumer demand and supply chain bottlenecks have resulted in an unprecedented shortage of goods that rely on advanced technology. The chip shortage reverberating across our economy has resulted in product delays and even halted production at some automobile manufacturers.
We are constantly reminded of our reliance on the global economy: 90% of the most advanced chips are currently made in Taiwan. Ukraine is the home to massive deposits of lithium, a critical mineral for the batteries that power electric vehicles. Instability far from our shores has the potential to cut off access to key resources.
Investing in American manufacturing now is particularly important for semiconductors, which so many industries rely on. Congress has an opportunity to act decisively to bolster our advanced manufacturing capabilities by passing the bipartisan CHIPS Act. This commonsense bill will invest billions of dollars to restore America’s position as the global leader in advanced chip manufacturing.
Still, we have to do more to remove obstacles that chipmakers and other advanced manufacturers currently face. Over the past few years, more and more companies of all shapes and sizes have become the victims of patent trolls. These shell companies, which well-financed investors and hedge funds create and support, buy up low-quality patents for the sole purpose of asserting them in litigation and seeking a huge verdict or settlement along the way.
In many cases, the patent at issue should never have been granted in the first place. For example, last year, Intel, the largest U.S. semiconductor manufacturer whose leadership President Biden acknowledged during his State of the Union address, got hit with a $2 billion judgment after a patent troll sued the company just weeks after buying the unused patents in question.
Over the past four years, abusive litigation filed by patent trolls has jumped 25%. This recent spike is correlated with changes that were implemented by the previous Director of the U.S. Patent and Trademark Office (USPTO), who issued a new rule stipulating that the agency would decline to review the validity of patents if they were already being used in litigation.
Prior to this rule change, innovators who were sued by patent trolls could petition the USPTO to have expert judges determine whether the patent being asserted against them was valid. Under the new rule, more and more of these victims have been forced to defend themselves in court against abusive litigation based on low-quality patents. This drains innovators’ resources and time and leaves complex, technical, high-stakes decisions in the hands on non-expert juries.
The good news is that President Biden’s USPTO Director, Kathi Vidal, was just confirmed by the U.S. Senate. Now that she is in office, Vidal’s commitment to repealing the harmful changes that her predecessor unilaterally implemented will be crucial. These changes have denied some of America’s most innovative companies access to tools that Congress established a decade ago to help them fight back against abusive patent litigation, most notably a streamlined review of the validity of patents asserted in litigation.
Congress also has a role to play here by passing bipartisan legislation, as it did a decade ago, to ensure that America’s innovative companies are able to petition the USPTO to strike down bad patents asserted against them. Thus, they will be able to focus squarely on their important work of developing new products and bringing them to market. Semiconductor manufacturers, whose technology relies on many intricate components, any one of which could be a target for a patent lawsuit, are acutely aware of this legislation’s importance.
America has long been the world’s leader in advanced technology and innovation. We must address the holes in our patent system by ensuring that our advanced manufacturers have the protection of expert review to defend against abusive litigation. It is one of the most important steps we can take to remain competitive on the global stage, build resiliency, and prevent conflict abroad from interrupting our access to critical products like semiconductors.
Mark Udall is a Democrat who served as United States Senator from Colorado from 2009 until 2015. He served on the Armed Services and Intelligence Committees.