The American tech sector might have gotten its start in California, but today, tech is taking off in Texas’ Silicon Hills.
In recent years, some of our country’s most successful businesses have fled California for the Lone Star State, and the addition of high-powered, innovative tech companies, including Apple’s recent expansion into Austin and Microsoft’s major investments in San Antonio, has put the Texas economy into overdrive. Many of the businesses that have been brought to Texas by our state’s business-friendly laws and regulations specialize in semiconductor manufacturing, and right now, Texas’ budding chip making industry is booming.
Chip manufacturers like Oracle and Hewlett-Packard have left San Francisco and Palo Alto to relocate to new tech hubs like Houston and Austin. Today, the semiconductor industry employs over 20,000 Texans, and our state has quickly grown to lead the nation in chip manufacturing – and there’s no sign that investments from major semiconductor manufacturers are going to stop anytime soon. Samsung is currently in the process of constructing a $17 billion dollar chip production center in Austin, and semiconductor giant Micron is considering Texas as the location to build a new $40 billion factory to make high-tech memory chips.
Unfortunately, because of decisions made by a government agency in Washington, that progress could grind to a halt.
Many of the same companies driving Texas’ semiconductor industry have found themselves facing lawsuits over patents and intellectual property filed by bad actors at the International Trade Commission (ITC). Oftentimes, the companies filing lawsuits at the ITC simply want to score a quick settlement, and many of them use old or outdated patents as the basis for their cases. Lately, many of these bad actors have taken advantage of lax enforcement of the ITC’s rules to bully successful businesses based in Texas.
In 2021, for example, Oracle faced an onslaught of lawsuits brought by a pair of foreign patent trolls – companies that don’t actually make any products – that falsely accused the company of stealing intellectual property used in a number of popular products. Similarly, Hewlett-Packard was subjected to a costly, multi-year legal battle over patents used to make its semiconductors. While the ITC threw these cases out, the Commission has ruled against other companies with significant investments in Texas in favor of businesses filing baseless lawsuits.
The fact that the ITC is considering these cases at all is concerning.
The fact is that lawsuits filed with the ITC carry serious consequences. If the Commission had sided against Hewlett-Packard or Oracle, for example, it could have resulted in a ban on their products from being sold in the United States and devastated the Texas economy. While there are laws on the books that should prevent bad actors from taking advantage of the ITC, unfortunately, the Commission has shown that it would rather side with companies intent on abusing loopholes than legitimate businesses.
Thankfully, there are some leaders in Washington who are committed to stopping bad actors from taking advantage of the ITC. A new bill in Congress, the Advancing America’s Interest Act, would close some of the loopholes used to file phony lawsuits, and it would make it tougher for the Commission to issue sweeping decisions that would severely hurt our economy. However, the bill, as currently written, doesn’t accomplish everything it needs to do to fix the ITC. Senator John Cornyn can help, and as a member of the powerful Senate Finance Committee, he can strengthen the legislation, and his vote of confidence for the Advancing America’s Interest Act could help the bill gain steam in Washington and reach the President’s desk. Ultimately, we need Senator Cornyn to act and stop patent trolls from threatening our economy.
Frank Corte represented San Antonio in the Texas House of Representatives from 1993-2011.