Congressional bills could curb litigation funding, threatening U.S. innovation
Proposed legislation would tighten disclosure rules for third-party litigation funding, making it harder for small firms to sue larger rivals.
Two pending bills - Rep. Darrell Issa’s Litigation Transparency Act and Sen. Thom Tillis’s Tackling Predatory Litigation Funding Act - aim to impose extensive disclosure requirements on third-party litigation funding arrangements. Advocates argue the rules are unnecessary because courts already can review funding deals, and the new mandates could reveal sensitive data that large corporations might exploit to pressure funders or weaken plaintiffs’ cases.
The loss of funding would leave many small innovators unable to afford costly patent lawsuits, forcing them to settle for low offers or drop claims entirely. This could diminish the protection of intellectual property, slow the pace of invention, and weaken the U.S. economy, which relies heavily on small-business-driven innovation.
Why it matters
Limiting litigation funding could reduce legal recourse for small innovators, slowing U.S. technological progress.
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