
Johanns: Keep foreign interference out of our courts
In 2016, Chinese billionaire and real estate tycoon Sun Guangxin bought 130,000 acres of land in Val Verde County, Texas. This small ranching community of 50,000 people is home to Laughlin Air Force Base, a training hub for military pilots.
The purchase raised questions about Sun’s motives — namely, why would someone with ties to the Chinese Communist Party want to buy such a large swath of land so close to a U.S. military installation?
The truth is part of a larger trend. Over the last decade, the amount of U.S. land owned by Chinese investors has quintupled, totaling 383,000 acres — an area the size of Rhode Island.
Lawmakers have started taking note. In 2023, Sen. Chuck Grassley, R-Iowa, and Sen. Tammy Baldwin, D-Wis., introduced the Farmland Security Act. The bill, which later became law, requires the Department of Agriculture to report and publish all foreign investments in U.S. farmland, informing Congress’ efforts to protect our land and national security interests.
While this legislation is an essential first step to safeguard American interests, land purchases are only one of many areas where greater transparency is needed to monitor foreign meddling in U.S. affairs. As Congress keeps tabs on the threats posed by these acquisitions, it would be wise to address how foreign adversaries are operating similarly regarding our justice system.
Litigation investing, a rapidly growing industry expected to reach more than $30 billion by 2028, allows investors — based anywhere in the world — to fund lawsuits in U.S. courts with the promise that they will reap a portion of any financial reward. While some investors may have good intentions, many treat the legal system as a means to enrich themselves.
Investors are typically not required to disclose their involvement in court, making our legal system ripe for foreign interference. In the District of Delaware, one of the few jurisdictions that does require disclosure of investors, we learned that a Chinese firm was financing intellectual property lawsuits against tech companies. Investigations by Bloomberg Law also uncovered that Vladimir Putin’s billionaire allies have taken advantage of litigation investment to skirt American and British sanctions.
President Trump, who campaigned on a promise to put America First, has an opportunity to stop this siphoning of money from hardworking Americans to our foreign adversaries and competitors. To start, greater transparency is needed. Rep. Darrell Issa, R-Calif., has introduced the Litigation Transparency Act to require investment transparency for all civil cases in federal court, explaining that the “legislation targets serious and continuing abuses in our litigation system that distort our system of justice by obscuring public detection and exploiting loopholes in the law for financial gain.”
Moreover, the administration can enhance protections in areas that are magnets for undisclosed litigation investment.
In recent years, patent infringement cases have been the top area for new litigation funding, totaling 19% of all new capital commitments in 2023. Trump’s pick to lead the U.S. Patent and Trademark Office, John Squires, was announced in early March. Once confirmed, Squires will have the authority to roll back agency changes that have opened the door for greater litigation investment activity.
The Patent Trial and Appeal Board (PTAB) serves as an alternate venue for federal courts to make determinations in patent-related legal conflicts. At the PTAB, administrative patent judges — experts in technical fields — have the authority to review and invalidate patents that may be involved in infringement cases. Whereas investor presence in lawsuits leads to longer, more expensive litigation, patent validity review at the PTAB is more efficient and less costly than disputes in federal court.
Despite this upside, new agency actions have reinstated old rules making it more challenging to petition the PTAB for review. In effect, this shifts conflicts over patent validity — the top area of litigation investment — into venues more beneficial for the investors. Making sure that the PTAB is well-resourced and accessible to any member of the public who can reasonably show that a patent is likely invalid is one way the next USPTO director can mitigate some of the worst abuse that stems from litigation investors operating behind the scenes.
Blanket transparency requirements and targeted reforms in high-activity areas are necessary to make the U.S. legal system serve America’s best interests first. Lawmakers have already taken action to mitigate foreign influence in other vital arenas; now it’s time to shield our justice system.
Mike Johanns served as secretary of agriculture from 2005 to 2007, as governor of Nebraska from 1999 to 2005, and as a U.S. senator from 2009 to 2015./InsideSources