The patent system is central to the United States' competitiveness, job creation, and future economic security. It is designed to protect and promote American innovation. In 2011 the America Invents Act, arguably the most significant overhaul of the patent system in my lifetime, was signed into law. While taking important steps to modernize our patent system, this law did not address the growing problem of abusive patent litigation, also known as patent trolling.
In recent years, we have seen an exponential increase in the use of weak or poorly-granted patents by so-called patent trolls to file numerous patent infringement lawsuits against American businesses with the hopes of securing a quick payday. Many of these are focused not just on larger companies, but small and medium-sized businesses as well. These suits target a settlement just under what it would cost for litigation, knowing that these businesses will want to avoid costly litigation and probably pay up. The patent system was never intended to be a playground for trial lawyers and frivolous claims.
Abusive patent litigation is a drag on our economy. This may seem like a complex issue, but the fact of the matter is this is a problem impacting businesses and industries of all types and the jobs of the people who work for them. Everyone from independent inventors, to start-ups, to mid and large sized businesses face this constant threat. The tens of billions of dollars spent on settlements and litigation expenses associated with abusive patent suits represent truly wasted capital -- capital that could have been used to create new jobs, fund research and development, and create new innovations and technologies.
That's why I have been working on legislation to address this ever increasing problem. The bipartisan Innovation Act (H.R. 3309), which I recently introduced, is designed to eliminate the abuses of our patent system, discourage frivolous patent litigation, and keep U.S. patent laws up to date. This week, the House Judiciary Committee held a hearing to thoroughly examine this issue and how the Innovation Act will strengthen our overall patent system.
The Innovation Act has received broad support from a variety of organizations representing businesses across the nation, including the U.S. Chamber of Commerce, the National Retail Federation, the National Association of REALTORS, the Credit Union National Association, the National Association of Federal Credit Unions, and the Consumer Electronics Association. The Virginia Bankers Association has also voiced their support for the bill as well as technology companies around the Commonwealth.
Virginia has long been a leader in technology and innovation, making it a welcome home for businesses. If the Commonwealth and the nation's economy are to remain competitive in the global economy, it is critical that we address the economic harm caused by abusive patent litigation. The important reforms found in the Innovation Act will help fuel the engine of American innovation and creativity, creating new jobs and spurring the growth of our economy.