Adobe and BSA Urge Congre to Support Software Innovation by Improving Patent Quality and Curbing Opportunistic Litigation

Adobe VP Dana Rao testifies against Patent Assertion Entity profiteers; stresses importance of software patents SAN JOSE, Calif. March 14, 2013 Dana Rao, vice president of Intellectual Property and Litigation at Adobe Systems Incorporated (Nasdaq:ADBE), today appeared before the House Judiciary Committee's Subcommittee on Courts, Intellectual Property and the Internet. Representing Adobe and other members of BSA | The Software Alliance, Rao testified during the hearing on Abusive Patent Litigation: The Impact of American Innovation & Jobs, and Potential Solutions. He spoke on the need to end abusive patent litigation and preserve the right of software developers to patent their inventions.

In his testimony, Rao urged Congress to focus on ending abusive litigation practices. Companies like Adobe are overwhelmed by demand letters and suits by entities that don't utilize the inventions they own or have any intention of doing so, but instead focus on making a quick profit by aggressively asserting a questionable patent. These quick profits are used to buy additional patents, which are then similarly monetized. No businesses are furthered, no jobs are created, and no progress of science or the useful arts is promoted, Rao said. We believe Congress can make important changes that will help curb opportunistic litigation. For example, patent law already permits shifting fees to address abuses of process. But the way the law is being applied, it is a high standard and rarely met. We should clarify the law, so a court can act when it sees litigation with telltale signs of abuse such as high plaintiff demands and low settlement offers or no business in the field of the patent, Rao added.

BSA President and CEO Robert Holleyman said, Patents play an important role in driving software innovation, which benefits the whole economy. But we need to continue improving the system to ensure patents are not used opportunistically in ways that disrupt the marketplace. Some will tell you software patents are the root cause of opportunistic litigation, and the solution is to stop granting patents on software or to make it much harder. We disagree. We should instead take practical steps to address the asymmetry of incentives that makes patent litigation an attractive business model while also continuing to improve the quality of our already strong patent system.

To curb abusive patent litigation practices, Rao encouraged Congress to enact rules more accurately directing judges to impose fees on opportunistic parties to litigation. Strengthening Rule 11 of the Federal Rules of Civil Procedure also would help. It imposes an affirmative duty on plaintiffs not to file a suit aimed at harassing or imposing undue costs on a defendant and it empowers judges to impose substantial sanctions if the rule is violated.

Noting that patent litigation abuse has intensely focused on software, Rao also stressed the importance of software patents to the economy and affirmed the widely held industry belief that software is deserving of patent protection. The software industry is now a critical sector of our economy, contributing more than $400 billion to our nation's gross domestic product, employing more than 2 million U.S. workers, and paying salaries that are roughly 200 percent of the national average, Rao said. This vital industry needs intellectual property protection to continue its development and ensure American leadership in this area for years to come.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

About BSA

BSA | The Software Alliance (www.bsa.org) is the leading global advocate for the software industry. It is an association of world-class companies that invest billions of dollars annually to create software solutions that spark the economy and improve modern life. Through international government relations, intellectual property enforcement and educational activities, BSA expands the horizons of the digital world and builds trust and confidence in the new technologies driving it forward.

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