By Mario H. Lopez, Hispanic Leadership Fund
As many families across America experienced firsthand, the pandemic highlighted the impact of the ‘digital divide’—the gap in access to communication technologies that hurts communities across the country.
This ongoing issue has been as important as any, as access to broadband became indispensable to online learning, remote work, telehealth services, and maintaining our social relationships. The recently signed infrastructure package allocates significant funds to continue building out broadband networks to connect underserved communities. But access to the internet is just one part of the broadband equation.
The other part of the problem is access to devices that enable internet connectivity. A broadband connection is no good unless individuals have devices to use that connectivity. Thankfully, the American marketplace for laptops, tablets, and smartphones is robust and competitive, resulting in affordable prices for consumers.
Data from the Pew Research Center show that minority and low-income families disproportionately rely on smartphones to access the internet. As I have previously written, a growing threat from bad actors continues to threaten access to these devices.
In recent years there has been a troubling trend of companies that acquire patents, sit on them without actually producing goods, and then use them against legitimate companies to negotiate exorbitant settlements in patent licensing disputes. These “patent trolls”, also known as “non-practicing entities” (NPEs), have become a real menace.
Patent trolls have filed infringement claims with the International Trade Commission (ITC) to increase their leverage in private negotiations to extract huge get-rich-quick settlements.
The ITC is a quasi-judicial federal agency with authority to settle certain cases involving U.S. intellectual property rights. Trolls choose the ITC because, unlike a court, the Commission has limited enforcement tools that create overwhelming threats to respondent companies. The ITC can only issue an exclusion order, or import ban, against products in question. Just the threat of an ITC exclusion order that could crater an entire business can force a company to settle a claim, regardless of whether it infringed a patent or not.
Exclusion orders don’t just damage the companies being sued, they also hurt consumers and are detrimental to American innovation and industrial advances. For example, recent patent disputes that threatened to remove large volumes of smart devices from the market ultimately led defendants to settle with patent trolls. Despite the minor patents at issue, the penalties were massive. This kind of outcome diverts funds from constructive innovation and industry investments, including those that create jobs.
Just as worrisome, it is bad actors that are using the ITC to target companies producing significant goods and services in the United States, even though the ITC is supposed to protect U.S. industry from bad foreign actors. Data shows that a majority of companies sued at the ITC are U.S. based, and between 2018 and 2021, a full 64% of respondents in ITC patent disputes were headquartered in the United States.
These outcomes have justifiably caught the attention of Members of Congress. For example, Rep. Suzan Del Bene (WA-1) and Rep. David Schweikert (AZ-6) have introduced the Advancing America’s Interests Act (AAIA), aiming to fix key problems at the ITC.
Patent Trolls’ abusive practices end up exacerbating the problems of millions of Americans who are already digitally disadvantaged. Broadband connectivity and device access go hand-in-hand. If patent trolls win, the connectivity gap in America will only widen and those among low-income demographics and underserved communities will fall further behind in the 21st century economy.
Reforming the ITC and its processes—so it protects and promotes America’s future rather than burdening it—can help realize the bipartisan goal of connecting all Americans to broadband and the real-world benefits that come with that connectivity.
Mario H. Lopez is the president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all Americans.