STATEMENT
of the
Honorable Nydia M. Velázquez, Chair
Committee on Small Business
         Full Committee Hearing on the Potential Impact of Patent Reform on Small Business
March 29, 2007

For more than 200 years, the U.S. patent system has served America’s inventors and helped to foster innovation and technological advancement.  The award of strong, enforceable patents, based on an effective patent system, provides a critical incentive to innovation.  Granting inventors certain exclusive rights helps spur research and development efforts which, in turn, help drive American technological leadership.  In this way, patents are an important linchpin with respect to continuing America’s economic growth and global competitiveness.

An effective Patent and Trademark Office and sound intellectual property laws are particularly significant to small companies.  As tireless innovators, small companies produce more than 13 times as many patents per employee than do their larger counterparts.  This demonstrates the critical role that patents play for small firms—enabling them to attract investors, grow their companies, and compete with larger entities. 

Because of the patent system’s importance to the U.S. economy and to small business, today’s hearing will examine the effect of potential reforms on small firms.  We will hear testimony on ways that we can improve the system to enable small companies to compete in a global economy. This includes harmonizing U.S. patent laws with those of other industrialized countries and strengthening patent quality.  We will also hear about potential changes to the litigation system, which many suggest has become a deterrent to innovation and technological progress.

Reforming the U.S. patent system could have a very significant impact on small companies’ ability to protect, as well as enforce, their rights.  The current system has a significant impact on the small companies that manufacture complex products, license patented technologies, and defend themselves in alleged infringement cases.  We will hear testimony that will discuss these issues, which will illustrate the important stake that small companies have in this debate.

 

Small innovative companies play a significant role in the most productive sectors of the United States economy. These companies are often more willing to take risks than larger competitors, positioning themselves to seize market opportunities.  As remarkable inventors, small companies use and rely on the U.S. patent system.  For many, this is central to their business and on-going competitiveness.  Today, we will ensure that these small firms have a voice in the patent reform discussion. 

I look forward to the testimony on this important—if complex—issue.