Opinion: Peter DeFazio on why success of American auto industry relies on strong IP protections

A new report says that trade issues are putting the U.S. at a competitive disadvantage when it comes to infrastructure.

Opinion: Peter DeFazio on why success of American auto industry relies on strong IP protections

I was with President Biden 16 months ago on the South Lawn at the White House when he signed the $1.2 trillion Infrastructure Investment and Jobs Act into law. I had sponsored and championed the legislation to make an investment once in a generation for our nation's competitiveness and infrastructure.

The bill was the culmination for my 35 years of service in Congress. I served as Chairman of the House Transportation Committee. Presidents have tried for decades to fix our crumbling roads, bridges and schools but failed. But, President Biden and myself were able to get the job done. As cities and towns in the U.S. put this money to work, it is important that we all build on our progress and make sure America's transportation and infrastructure systems are envied around the world.

Nothing is more crucial in this regard than the success of the American automobile industry. General Motors Chrysler and Ford were instrumental in building the middle class of America during the 20th century. Washington saved the automakers from bankruptcy during the Great Recession a little over ten years ago. Today, the same iconic companies face a new threat.

Patent trolls, shell companies which purchase large quantities of low-quality, unused patents in order to use them as evidence in lawsuits against companies who are making products in America and are productive in their own right -- now go after America's automobile manufacturers in our courts.

Electric vehicles are key to President Biden’s effort to reduce the fossil fuel emissions of cars and trucks. In one case, a patent troll from overseas accused GM infringing upon patents that it had acquired. The complaint was filed with the U.S. International Trade Commission accusing GM improperly importing critical technology for electric cars. It led to a Section 337 inquiry, a probe which could lead to GM being prohibited from importing parts for its electric cars.

Ironic, because the ITC is supposed to protect American manufacturers from imports that violate their patents. Patent trolls use the ITC today to threaten American companies with the threat of being prohibited from importing essential goods, also known as a 'exclusion orders'. Last year, patent trolls brought the most cases to the ITC.

Some companies, without the resources to fight back, may have capitulated and bowed to the demands of the patent troll for a settlement. GM didn't. The ITC determined in the end that GM did not violate a patent, but only after it was forced to pay significant legal fees. GM would have been better off investing the money in developing new products, jobs or its operations. This is bad for GM and its workers. It's also bad for the consumers. It puts our infrastructure in general at a disadvantage compared to countries that have stronger protections against trolls.

The ITC has some options to stop patent trolls using the system to attack American automakers. To begin with, trolls need to be forced to reveal any funding sources that are used to support their litigation. We know that the troll who attacked GM is associated with a Dublin based patent monetization company, but the truth is that many trolls are hidden behind layers of shell firms to conceal their true identities.

While it's known that the troll who targeted GM is based in Dublin it's not clear who funds it. Are they sovereign wealth funds of hostile nations or overseas competitors to GM. We don't even know what we do not know. It's time to stop this so that staff and commissioners at the ITC are able to do their job fully aware of the facts.

The ITC must also conduct an analysis of public interest as soon as a petition has been filed to determine if excluding the goods would be in the public's best interests. It is clear that GM would not be exempted.

President Biden's agenda includes rebuilding the infrastructure of our country. To do this, we must ensure that America's automobile manufacturers keep the country moving forward, by bringing innovative, new products to market, that serve workers, families and businesses. To achieve this, we need to ensure that automakers are free of unnecessary interference from litigious patent-trolls.