Earlier today more than 130 US manufacturing companies sent a joint letter to President Obama detailing their serious concerns about the economic impact that enactment of patent reform legislation would have on the US economy should such reform look anything like what was proposed during the 110th Congress last year. The letter sent to President Obama coordinated by the Manufacturing Alliance on Patent Policy (MAPP), an ad hoc coalition of manufacturing companies. Last month MAPP released an economic analysis that explained that adopting the failed patent reform proposals of 2008 would put at risk 298,000 manufacturing jobs and reduce R&D investment by up to $66 billion. 

With patent reform being a top priority in Congress, there is real concern regarding what the 111th Congress will propose when patent reform once again takes center stage on the Congressional agenda, which could come as early as late winter or early spring according to some sources.  It seems unthinkable that Congress and the President would be at all interested in doing anything that could even potentially have that kind of negative impact on the US economy.  With the stimulus packages in excess of $800 billion and the stock market plunging after Treasury Secretary Timothy Geithner announced his ill-defined plan to use both public and private money sure up the banking system, we simply cannot take the loss of so many jobs and investment in research and development.

In the 110th Congress, patent reform legislation was introduced, with most of the provisions, and certainly all of the controversial provisions, primarily benefiting only large high-tech and financial services companies.  The word around Washington, DC is that when patent reform legislation is reintroduced it will look remarkably the same as did the failed 2008 legislation, which means it will be more of the same and will benefit only those same high-tech and financial services companies.  The prosperity of two industries should not come at the expense of the broader US economy and those innovators who drive economic activity.  Those supporting the controversial provisions of patent reform legislation merely want to insulate their market dominance and make it economically feasible to infringe with impunity, and it is difficult to explain why such legislation ought to even be considered at this point.   It  makes no sense for bad patent reform to still be on the agenda in Washington when there are so many other issues that need to be addressed in order to bring the US out of recession.

The letter by US Manufacturers to President Obama is quite persuasive and makes excellent points.  Some of the highlights include:

• “A recent study focusing on the impact of apportionment legislation estimates that this change alone would put at risk up to 298,000 manufacturing jobs and reduce R&D investment by up to $66 billion.  This would be a negative outcome even when our economy is strong; at a time of economic crisis, it would be tragic.”
• “We feel strongly that the prosperity of a few companies within two industries should not come at the expense of a larger group of stakeholders.”
• “[T]here is no explosion in patent litigation. In 1993, lawsuits were 1.45% of patents granted. In 2007, lawsuits were 1.48% of patents granted. The number fluctuates from year to year, but it has never indicated a system out of control. (Source: USPTO Annual Reports, Federal Judicial Statistics)”
• “[T]here is no explosion in patent damage awards. Adjusting for inflation, the median annual patent damages award has actually dropped slightly over the last 13 years. In constant dollars, the median was $3.9 million from 1995 through 2000, and $3.8 million from 2001 through 2007. (Source: 2008 Patent Litigation Study, PriceWaterhouseCoopers.)”
• “It is crucial to remember that patent damages are imposed only after patent validity and infringement are determined on the merits. In other words, those paying damages have been found to have unlawfully used intellectual property belonging to someone else.”
• “It would be a terrible mistake to allow the increase in patent applications to become an excuse to undermine patent protections. Rather, Congress should take advantage of Americans’ growing desire to invent by ensuring that the U.S. Patent and Trademark Office (“USPTO”) has the resources and management to handle the increased number of applications in a thorough and timely manner.”
• “The legislation introduced in the 110th Congress dealt with patent issues on the back end rather than the front end, i.e., it attempted to deal with the symptoms of poor patent quality and growing pendency rather than addressing these issues directly. Many of the problems identified by legislative reform proponents as reasons for such reforms are best addressed instead by reforms of USPTO operations.”

The Manufucturers that signed this letter to President Obama are:

 The 3D Source, Inc., Westbury, New York
AbTech Industries, Scottsdale, Arizona
Acclarent, Inc., Menlo Park, California
Acorn Cardiovascular, St. Paul, Minnesota
Adhezion Biomedical, Wyomissing, Pennsylvania
Adriot Medical Systems, Inc., Loudon, Tennessee
Advanced Medical Technology Association (AdvaMed)
AEgis Technologies Group, Huntsville, Alabama
Aero Marine Co., Port Townsend, Washington
Air Products and Chemicals, Inc., Allentown, Pennsylvania
American Broadhead Company Inc., Gonic, New Hampshire
Amidex, Inc., Lakewood, Colorado
AngioDynamics, Queensbury, New York
Animas, West Chester, Pennsylvania
APJeT, Inc., Santa Fe, New Mexico
Applied Technology Associates, Albuquerque, New Mexico
Aspiration Innovation, Inc., Fort Collins, Colorado
Asthmatx, Inc., Sunnyvale, California
BAE Industries, Inc., Auburn Hills, Michigan
Big Horn Valve, Inc., Sheridan, Wyoming
Biosense Webster, Diamond Bar, California
Brainstorm, LLC, Colorado Springs, Colorado
Calibra, Redwood City, California
Carbylan Biosurgery, Palo Alto, California
Cargill, Minneapolis, Minnesota
CHA Corporation, Laramie, Wyoming
CIC Photonics, Inc, Albuquerque, New Mexico
CLRS Technology, Costa Mesa, California
Columbia Medical, Santa Fe Springs, California
Contrast Optical Design and Engineering, Inc., Albuquerque, New Mexico
Corning Incorporated, Corning, New York
Crystal Clear Technologies, Inc., Menlo Park, California
Cummins Inc, Columbus, Indiana
Cummins-Allison, Mt. Prospect, Illinois
CVI Melles Griot, Albuquerque, New Mexico
Cyberonics, Houston, Texas
Dallas Optical Systems, Inc, Rockwall, Texas
DePuy Orthopedics, Warsaw, Indiana
DePuy Spine, Raynham, Massachusetts
DexCom, Inc., San Diego, California
Diamond Antenna and Microwave Corporation, Littleton, Massachusetts
Diamond-Roltran, Littleton, Massachusetts
Dolby Laboratories, San Francisco, California
Dow Corning, Midland, Michigan
Dynamet Technology, Inc., Burlington, Massachusetts
DuPont, Wilmington, Delaware
DxTech LLC, Merrimack, New Hampshire
Dynatronics, Salt Lake City, Utah
Edwards Lifesciences, Irvine, California
ElectroChem, Inc, Woburn, Massachusetts
Eleme Medical, Merrimack, New Hampshire
Element One, Boulder, Colorado
Energized Glass LLC, Fort Collins, Colorado
Ethicon Endo-Surgery, Cincinnati, Ohio
ExploraMed Development, LLC, Redwood City, California
Exxon Mobil Corporation, Irving, Texas
FarSounder, Inc., Warwick, Rhode Island
The Foundry, Inc., Menlo Park, California
Front Range Oil and Gas, LLC, Windsor, Colorado
Gen-Probe, San Diego, California
Headwall Photonics, Fitchburg, Massachusetts
Heritage Woods, Inc., Alto, Michigan
High Peaks Materials, LLC, Commerce City, Colorado
Hill-Rom, Inc., Batesville, Indiana
Hunt Control Systems, Inc., Fort Collins, Colorado
Inovadeas, Fort Collins, Colorado
Insightful Products, Scarborough, Maine
InstruTech, Inc., Longmont, Colorado
InSync, Inc., Albuquerque, New Mexico
Interrad Medical, Inc., Plymouth, Minnesota
Irwin Research & Development, Yakima, Washington
Keeton Industries, Wellington, Colorado
Kinetic Concepts, Inc., San Antonio, Texas
Kyzen Corporation, Nashville, Tennessee
LandNet, Inc., Loveland, Colorado
Lappintech LLC, Douglas, Wyoming
Laser Light Engines, Salem, New Hampshire
Lateral Reservoir Stimulation, Fort Collins, Colorado
Liberty Research Co., Inc., Gonic, New Hampshire
Life Technologies, Foster City, California
LogicMark, Fairfax Station, Virginia
Look Dynamics, Inc., Longmont, Colorado
Manufacturing Alliance on Patent Policy (MAPP)
Mar-Bel Associates, Naples, Florida
Masimo, Irvine, California
Materials Systems Inc., Littleton, Massachusetts
McCarter Technology, Inc., La Porte, Texas
Meadowlark Optics, Frederick, Colorado
Medical Device Manufacturers Association (MDMA)
MedRad, Pittsburgh, Pennsylvania
MicroCube, Fremont, California
Milliken & Company, Spartanburg, South Carolina
Monsanto Company, St. Louis, Missouri
Nanosys, Inc., Palo Alto, California
NeoVista Inc., Fremont, California
Neuronetics, Inc., Malvern, Pennsylvania
NuVasive, Inc., San Diego, California
Optical Research Associates, Westborough, Massachusetts
OtterBox, Fort Collins, Colorado
Q-Med Scandinavia, Inc., Princeton, New Jersey
Parts on Demand, Louisville, Colorado
PE Fusion, LLC, Gillette, Wyoming
PepsiCo, Purchase, New York
Physical Sciences, Inc., Andover, Massachusetts
Pomoco, LLC, Centennial, Colorado
PopPack LLC, San Francisco, California
Rearden, San Francisco, California
S&C Electric Company, Chicago, Illinois
Scientific Solutions, Inc., Nashua, New Hampshire
Sculptured Homes, LLC, Birmingham, Michigan
Snaptron, Windsor, Colorado
SoftRay, Inc., Laramie, Wyoming
SO Sound Solutions, Louisville, Colorado
StaticOff LLC, South Portland, Maine
Syngenta, Golden Valley, Minnesota
Tegracore LLC, Fort Collins, Colorado
Terra Moya Aqua, Inc., Cheyenne, Wyoming
Texas Instruments, Dallas, Texas
Tranex Inc., Colorado Springs, Colorado
TRS, Inc., Boulder, Colorado
TruTouch Technologies, Albuquerque, New Mexico
Unicover Corporation, Cheyenne, Wyoming
United Technologies, Hartford, Connecticut
Unitron, Dallas, Texas
Vail Metal Systems, LLC, Edwards, Colorado
Value Plastics, Inc., Fort Collins, Colorado
VentureAdAstra, Anchorage, Alaska
Vibrynt, Inc., Redwood City, California
Walker Manufacturing Company, Fort Collins , Colorado
Wellington Operating Company, Wellington, Colorado
Wellington Water Works, Wellington, Colorado
WildBlue Communications, Inc., Greenwood Village, Colorado
Wolf Robotics, Fort Collins, Colorado
Wyoming Silicon, LLC, Sheridan, Wyoming
Zimmer Inc, Warsaw, Indiana

About the Author

Eugene R. Quinn, Jr. President & Founder of IPWatchdog, Inc. US Patent Attorney (Reg. No. 44,294) B.S. in Electrical Engineering, Rutgers University J.D., Franklin Pierce Law Center L.L.M. in Intellectual Property, Franklin Pierce Law Center Send me an e-mail

Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide