RALEIGH - Red Hat has been based in North Carolina for over a decade. As a leading provider of open-source software solutions, we've been able to witness and contribute to the state's recent growth in high-technology jobs. While it is our hope that North Carolina's future continues to be filled with this kind of development, companies must be given the tools they need to add to the state's rich history and to create jobs for North Carolina's future.

We, along with many other local and global companies, believe that our ability to create is being compromised by an outdated and imbalanced U.S. patent system. This issue affects all businesses, from smaller companies like us to large multi-national corporations.

The current system has not been significantly updated in more than 55 years. America's abilities and needs have changed greatly since that time, and it's important to have a system in place that not only adapts to these transformations, but encourages them.

Fortunately, Congress is working on a solution. The Patent Reform Act of 2007 -- passed by the U.S. House of Representatives last year and currently before the Senate -- addresses two fundamental issues with the patent system: enhancing patent quality and restoring fairness to the rules that govern how courts settle patent disputes.

First, the number of patent applications has expanded enormously in recent years, and the strained resources of the U.S. Patent and Trademark Office have been unable to keep up despite its concerted, good-faith efforts. As a result, a rising number of patent applications are overwhelming hard-working patent examiners and a higher number of low-quality patents are being accepted. The proposed patent reform legislation would help relieve this workload, making our country's patent system stronger and more efficient.

In addition, plaintiffs are taking advantage of litigation rules to seek unfair and inflated damage awards. With the existing system, a company that claims that its windshield wiper patent has been infringed can seek compensation using the entire car as a royalty base. The resolution of these patent disputes, even when the defendant has a straightforward defense, has become lengthy and expensive. Nationwide, the number of patent litigation cases more than tripled between 1990 and 2007. In 2007 alone, there was a whopping 30 percent increase in patent litigation cases in comparison to the number of cases in 2006.

The Patent Reform Act would give Congress the unique opportunity to make some much-needed improvements to our nation's patent system, forging a balance between allowing innovation to flourish and protecting the rights of inventors.

The legislation strengthens and clarifies patent guidelines so overall patent quality is improved. It also allows appropriate damage awards in the event that actual infringement occurred.

The act also would address the need for effective and timely methods for patent review that will weed out pesky, bad patents and cut down on the need for immediate litigation. The act creates new processes within the PTO to improve patent quality by providing a fair and timely method for reviewing patents after they have been issued by the PTO. The system would allow such a review either immediately after the patent is granted, or in circumstances where a party can establish significant economic harm resulting from assertion of the patent.

It is now up to the Senate to pass the Patent Reform Act. Our elected leaders need to pave the way for the future and, in so doing, position North Carolina for continued job growth.

(Michael Cunningham is executive vice president and general counsel at Red Hat, Inc.)