Litigation Transparency Bill Stacks Deck Against Small Inventors

Congress is considering a measure that could harm the very people the US depends on for its next wave of innovation. The Litigation Transparency Act of 2025 would force plaintiffs to reveal details about anyone who helps finance their lawsuits.

Lawmakers present this bill as a harmless attempt to create openness in the courts. In reality, it would give large corporations a fresh weapon to use against small inventors and entrepreneurs who have already been struggling to protect themselves.

US startup founders and independent inventors face impossible odds when corporate giants infringe on their patents. Years of relentless court battles cost millions of dollars and can drain the lifeblood of a small business.

Meanwhile, the largest corporations can afford to pay battalions of lawyers whose only job is to prolong cases until their opponents collapse.

Many corporations openly engage in what is known as efficient infringement. They steal patented ideas, build products around them, and calculate that paying a small settlement years later will be cheaper than licensing the technology fairly in the first place. They’ve learned that delay and intimidation are powerful business tools and exploit these tactics to drive out competitors before the merits of a dispute can even be addressed.

We’ve seen these battles play out in recent years.

The US International Trade Commission banned certain Apple Watches after it was proven they illegally incorporated technology from a much smaller company. Google agreed to a settlement after a Boston startup, Singular Computing, accused it of stealing key advances in artificial intelligence. Amazon was ordered to pay more than half a billion dollars to a smaller software firm, Kove IO, for infringing on its patents.

These outcomes were rare victories for the underdog, but they only happened because the inventors had the support and resources to stand their ground in court. Without financing and outside backing, these companies almost certainly would have been left with nothing.

Litigation funders give inventors a fighting chance. Without these investors, many legitimate claims would end before they even began. Litigation finance allows cases to be decided on the merits rather than on which side has the deepest pockets.

These partnerships not only provide capital but also expertise, since many funders connect inventors with experienced legal teams and the resources required to withstand corporate obstruction. Together, they create a pathway that ensures that the US legal system works for everyone, not only those with billions in reserves.

The Litigation Transparency Act threatens to strip inventors of this critical lifeline. Requiring disclosure of investors and funding would reveal sensitive information about how much money an inventor has to fight with. That information lands like a gift into the hands of the corporate defendant.

It tells them exactly how long a case can be drawn out before the inventor runs out of money. It invites pressure campaigns against financiers who provide much-needed support. It also chills the willingness of potential funders to step up, because few want to face public attacks or harassment from billion-dollar corporations.

Supporters of the bill try to alarm the public with claims of frivolous lawsuits and fears of foreign influence. These arguments aren’t rooted in facts. Litigation financiers only back strong cases because their return on investment depends on winning.

Courts and agencies already have protections in place to stop foreign actors from gaining access to sensitive information. What this bill really accomplishes is giving corporate infringers a stronger hand to keep stealing while stripping inventors of the precious resources needed to fight back.

If this bill becomes law, the losers will be small businesses, startups, and garage inventors. These are the dreamers who take risks, invest in creativity, and drive new economic growth. They employ millions of people and fuel the discoveries that change lives. The winners will be multinational corporations that already hold immense market power and use predatory tactics to keep it.

When innovation is rewarded and when fresh ideas have a chance to succeed, the US thrives. The Litigation Transparency Act would make innovation harder, not easier. Instead of passing legislation that helps infringers avoid accountability, Congress should be working to strengthen the ability of inventors to enforce their rights.

The US has always been a nation that honors those who take bold steps into the unknown. If we undermine small inventors, we risk dimming the very spark that has kept our economy resilient and our nation competitive on the world stage.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Kristen Jakobsen Osenga is the chief policy counselor at Inventors Defense Alliance and a professor of law at the University of Richmond School of Law.

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