Among the casualties of COVID-19 has been Americans’ tolerance with needless bureaucracy, nuisance lawsuits, and regulatory red tape. When the economy was booming and near full employment, it didn’t seem to matter much that companies often wasted time and money on extra paperwork and legal bills. Now, as we teeter on the edge of an actual sustained depression, we need to do everything possible to clear the way for job creation and business expansion again.
One way we help business get back on its feet is by reforming certain aspects of our legal system.
Today, we are relying on both the agricultural and medical sectors to feed the nation and bring life saving medicines and vaccines to market as soon as possible. Yet, both sectors have been besieged by class action lawsuits (and the threat of others) that discourage innovation and speed when we need them most.
On February 27th, the day after the CDC reported the first case of community spread of the novel coronavirus in the United States, Bayer was warning investors about the tremendous financial losses caused by the thousands of nuisance lawsuits related to Roundup weed killer—a pesticide that the Environmental Protection Agency (EPA) and health agencies around the world have determined poses no risk to human health.
Like Bayer, Johnson & Johnson has also spent valuable resources fighting frivolous lawsuits. One set of lawsuits seeks to hold the company liable for the scourge of the opioid crisis and force it to pay billions of dollars, not to victims, but to state and local governments. J&J also faces 15,000 lawsuits related to false claims that Johnson &Johnson knowingly manufactured and sold contaminated talcum powder products. One of those lawsuits resulted in a jury awarding a record-setting $4.69 billion verdict to 29 plaintiffs. Today In: Policy
Johnson & Johnson has successfully defended many of these cases, but the litigation has, nevertheless, cost the producer of life saving medicines billions of dollars that could have been spent on research and development of medicines and innovative products to help fight global pandemics and fulfill other critical healthcare needs.
Abuse of the legal system hurts not only large companies, but also small businesses and individual entrepreneurs, many of whom are on the front lines of fighting the pandemic. Americans have been touched by the many stories of individuals or small companies working to provide relief — from the dressmaker who switched from making prom dresses to making masks for nurses to people seeking to transform scuba gear into usable ventilators and people who are using 3D printers to create scarce ventilator valves. And, yet, today patent trolls have the capacity to buy up patents on such products with no intention of using them productively, just so they can file claims against these innovative businesses.
Patent trolls typically hope that businesses will calculate that settling out of court and paying them to go away will be less costly than engaging in a legal battle. In 2011, Congress passed and President Obama signed the America Invents Act, which created a review board within the patent office to challenge patents that have been wrongly issued. This has made it harder to exploit the patent process and has saved businesses an estimated $2 billion in legal fees in the first five years of its operations.
But some politicians are working to make it easier for patent trolls to exploit the system. Senator Chris Coons (D-DE) has introduced legislation that would make it easier for patent trolls to temporarily enjoin legitimate business owners from producing their products and to make it harder for the expert panel to nullify wrongly issued patents.
Now more than ever, American businesses and entrepreneurs should focus on creative problem-solving and innovation, not fighting frivolous claims from those who would abuse the legal system for their own financial gain.
If America is going to start to rebuild, lawmakers must make Civil Justice Reform a priority and not tear down those aspects of the legal system that are working.