Summer Reading: Intellectual Property; The Innovation Act and Music Licensing

This week’s edition of Summer Reading highlights intellectual property (IP) and legislation that Congress can move to reform the patent system and music licensing.  The Taxpayers Protection Alliance (TPA) has been calling on Washington lawmakers to make the necessary reforms in both of these areas so that innovators and creators can continue to fuel the economy, while holding bad actors responsible for abuses in the system.

Patent Reform

Patent trolls are often comprised of one or two individuals hiding behind a fictitious shell corporation. They scour the Internet trying to find vague, near-end patents, buying them up with the goal of filing lawsuits to extort settlements from businesses or individuals who can’t afford the high cost of litigation. They issue threatening letters, demanding payment through licensing fees for the use of ambiguous or commonly-utilized technologies, or threaten to sue. Most small businesses can’t afford the steep costs of litigation and instead are bullied into paying excessive licensing fees.

One solution to the problem of patent trolls is The Innovation Act, H.R. 9, offered this year by House Judiciary Committee Chairman Bob Goodlatte (R-Va) and Reps. Peter DeFazio, (D-Ore.), Darrell Issa (R-Calif.), Jerrold Nadler (D-N.Y.), Lamar Smith, R-Texas; Zoe Lofgren (D-Calif.), and Ann Eshoo (D-Calif.).

The Innovation Act was previously passed in late 2013 by a vote of 325-91 before stalling in the Senate in 2014. Unfortunately Congress went into the 2015 recess without moving on the Innovation Act and time is running out. The calendar for the remaining legislative working period this year is very limited and although Highway Funding and the Budget must be addressed, there’s absolutely no reason the Innovation Act can’t pass both chambers.

In addition to the bipartisan support the Innovation Act has garnered in the House, there is also a number of free market oriented organizations that have been publicly supportive of the bill. TPA recently signed onto a coalition letter, along with the R Street Institute, Center for Individual Freedom, Niskanen Center, Institute for Liberty, the Small Business & Entrepreneurship Council, Independent Women’s Forum, American Consumer Institute, Citizen Outreach, and the Minnesota Center-Right Coalition, affirming support for the Innovation Act.

Patent trolls continue to be a problem in the innovation economy. According to a report from Unified Patents, there has been a 36 percent increase in patent troll cases in district court. Stopping patent trolls would help encourage innovation and protect IP by ensuring that needless litigation would no longer take up the time of courts nor put businesses at financial risk, allowing companies to invest in new products and technologies. That kind of investment is exactly how IP thrives nationwide and reinforces just how important IP is to jobs in the United States.

Music Licensing

IP has been important to music creation for decades. But as the industry grows and technologies evolve, the IP protections that music is afforded must also be in line with the current landscape to ensure that creativity is encouraged and fostered. Two pieces of legislation introduced by Rep. Marsha Blackburn (R-Tenn.) could provide a positive impact on the creative rights of artists in the music industry.

First, H.R. 1733, the “Fair Play Fair Pay Act of 2015” (see the bill here) would create a level playing field for how artists are compensated when their music is played on certain stations.  The legislation would also  eliminate rules that have picked winners and losers in the marketplace based on outdated guidelines on older digital services.

Second, H.R. 1999, the “Protecting the Rights of Musicians Act” (see the bill here), would ensure music creators are able to claim credit and compensation for their content.  In addition, H.R. 1999 would also prevent the Federal Communications Commission (FCC) from implementing a mandate on mobile electronic device designers that is driven solely by special interests as opposed to consumer demand and creative forces.

The House of Representatives returns from their August recess on Tuesday September 8^th, and one of the first things they could do is put the Innovation Act and both Blackburn bills on the floor for a vote. The Innovation Act passed the chamber once, there is no reason to delay action any longer and force the Senate to start moving forward on reforming our patent litigation system. TPA continues to support the Innovation Act because it is long overdue that lawmakers take steps in the right direction to protect America’s innovators of today, and tomorrow.