If you are unaware that Massachusetts Republican Scott Brown was victorious last night via special election to fill the remaining term of the Senate seat held by the late Senator Ted Kennedy you must be living under a rock. Over the last month or so Brown has surged in the polls and took Massachusetts and the nation by storm, claiming a Senate seat long believed to be practically owned by Democrats. In a matter of days, perhaps weeks, the Democrats will no longer hold a filibuster proof majority in the Senate, which likely all but assures a death to health care legislation and a dramatic slow down in the Obama agenda. Already Senators and Representatives on the Democrat side of the aisle are talking about perhaps slowing down on health care, perhaps even starting over, and in the meantime focusing on jobs, which is after all what the overwhelming majority of Americans want Congress and the President to do. As a policy wonk and political observer I would love to get into a discussion about what this election means, and I have over at BlatantlyTrue.com, where I wrote MA Republican Scott Brown and his Truck Head to DC, but for the pages of IPWatchdog.com, general political discussion is a bit too much off topic. But one story that certainly is not off topic is patent reform, so allow me to ponder what this political tectonic shift may mean for the future of patent reform, which if done right could and should lead to job growth and economic prosperity.
First, it seems appropriate to acknowledge that health care reform has been dealt a significant blow by the election of Scott Brown. Over and over again he proudly declared that if elected he would be the 41st vote against health care in the Senate, a reference to the fact that in order to get any controversial legislation passed in the Senate it is necessary to have 60 votes. With 60 votes a filibuster can be broken, and without 60 votes Senators opposed to legislation can simple debate forever never allowing the debate to end, thereby tying up the Senate theoretically forever. In reality, when a filibuster is threatened no vote is typically held until there are 60 votes to close debate and move forward to a vote. The fact that Brown was elected suggests the majority of people in Massachusetts want health care stopped. Voters knew what they were voting for and would get with Brown, and it seems extremely likely that moderate and conservative Democrats will get that message loud and clear.
It also seems likely that Brown will align himself with a majority of other Republican positions, including Cap and Trade, for example. With no major legislative initiatives to show for 1 year in Office it seems logical that President Obama and Democrats, who control substantial majorities in both the Senate and House, would want to have at least something to campaign on during the Fall of 2010 leading up to the November 2010 mid-term elections. Already the Democrats have seemingly staked out the bank tax issue as something that could have popular appeal, but does anyone really believe banks or corporations pay taxes? Even if taxes go up they are passed on straight to consumers, and it seems that an indirect tax on consumers, while perhaps sounding good, likely won’t lead Democrats where they want to go in 2010.
Patent reform is hardly a kitchen table issue, although President Obama did recently give a speech discussing the Patent Office, calling the electronic filing system embarrassing. Save for a moment that he was completely wrong factually with respect to how he claimed the Patent Office handles patent application filings. He did talk about patents and that is interesting in and of itself. While Presidents always talk about innovation and technology, I cannot recall any President other than Ronald Reagan discussing patents per se. So obviously patents are on Obama’s mind, or were at least in the speech he read off the teleprompter.
Patent reform is not going to bring voters to the polls and turn out votes, or influence the votes of many, if any, voters in the mid-term election cycle. Nevertheless, patent reform is something that could get done and would be at least an accomplishment for the President and the Congress. On top of that, patent reform is certainly a high profile item on the agenda for many of the largest campaign donors, which means that anyone running for Congress should consider it to be a relatively safe issue that could make some important money people very happy. With money being the life blood of politics and running a campaign, don’t under estimate the politicians desire to get on the right side of those with deep pockets.
Of course, patent reform has remained elusive and thorny, with big-tech lined up against pharma and biotech, who oddly are aligned with small businesses, manufacturers and independent inventors. This means that even in the best of political climates any massive overhaul or radical change that would favor one group and disfavor others would be particularly tricky. Factoring in the political tsunami that happened last night in Massachusetts suggests that many politicians, particularly Democrats up for re-election in 2010, are likely not going to want to stick their necks out to alienate big campaign donors. After all, they are doing a bang up job alienating voters. They simply cannot add to the list of dissatisfied by alienating those who would otherwise donate money.
While it may come as a shock to many, even in the political climate throughout the country and in Washington, DC, patent reform is not political, at least in a national sense. Patent reform is political on a regional and local level, so there is absolutely no sense counting up the number of Democrats and Republicans and thinking that could foretell things to come should patent reform once again take center stage in Congress.
With the victory last night by a Republican in Massachusetts, every US Senate race and all 435 races in the House are up for grabs. If a Democrat can lose in Massachusetts, and lose the seat held by the late Senator Ted Kennedy, Democrats could lose anywhere, even in California for example. It just so happens that Barbara Boxer, US Senator from California, is up for reelection in 2010, and already Republicans are wondering “what if.” Right now it seems uncertain exactly who will be the Republican nominee to challenge Senator Boxer, and in recent weeks with Governor Arnold Schwarzenegger taking California’s US Senators to task for agreeing to the sweetheart deal for Nebraska relative to health care legislation, I have to wonder whether he is considering a run. Even with his low approval rating counting out someone as shrewd as Arnold would not be wise. But even if he doesn’t run, there are other Republicans who are polling within a few points of Boxer, and that will likely embolden A+ caliber candidates to come to the forefront.
So why so much about Barbara Boxer? Well, she is a perfect example of someone who would be put between a rock and a hard place if patent reform legislation were to come up again. California has a vast array of businesses in the State, including large numbers of big-tech companies who support patent reform in its most radical form. It is not much, if any, of an overstatement to recognize that big-tech would prefer watered down patent rights and vastly reduced available damages when patents are infringed. This is in part because they want to maintain their dominance and start-up companies with progressive and sophisticated patent strategies can and will call that dominance into question. It is also in part because they want to stop getting sued by so-called patent trolls, or if they are sued and lose they want to pay less. However, California also has a lot of small and growing tech companies, biotech companies and many others that need strong patent rights to succeed. Simply stated, if patent reform is on the 2010 agenda in Congress she will need to walk a fine line and ultimately with a vote would upset some important constituents who vote and who donate. Not exactly a recipe for success given the trending political climate.
With the election of Scott Brown last night a lot of things will change, and I think it makes patent reform less likely to happen. If it does happen and does get back onto the radar screen it will absolutely need to focus on tweaks and changes where there is broad consensus, such as with respect to adequately funding the Patent Office, eliminating fee diversion, enhancing the IT systems thereby allowing the USPTO to better streamline examination and other reforms aimed at making the institution that is the Patent Office operate better and more efficiently. If patent reform comes back with the same radical changes that simply cannot be tolerated by so many individuals and businesses it will be just another nail in the coffin of Democrats. Eventually I think the Democrats will wise up and learn the lessons of 1994, but things definitely will get more interesting before they get any less interesting. It is indeed a great time to be a pundit!