A Method to Spur the Economy Comprising Cutting Taxes: Obviously Non-obvious and Patentable Inventions Part II

By Gene Quinn
February 16, 2010

Back in November of 2009, I wrote Obviously Non-obvious and Patentable Inventions Part I.  I have for some time wanted to return to this and continue with Part II, which really is implied explicitly if you are going to call something Part I.  In any event, Part I was a combination of a rant about KSR tied together with frustration that the NCAA and otherwise brilliant (or so they tell us) University President’s cannot figure out a way to concoct a Division I (I refuse to call it Football Bowl Subdivision) playoff for College Football. Obviously, a Division I College Football playoff must not be obvious because it if were you would think a bunch of bright people in ivory towers would have figured out how to make it work, particularly given that there would be more money to be made off the labor of unpaid (except perhaps for USC players) amateur college athletes. With there being college playoffs for every other sport, including in other divisions of college football, the conclusion must be that a Division I playoff must not be “common sense” and, therefore, must be non-obvious. Picking up on this theme and focusing on things that at first glance seem incredibly obvious but must not be at all obvious given that those who are exceptionally smart can’t figure them out, I thought with tax season right around the corner it might be worthwhile to explore method of stimulating the economy by cutting taxes.

First, lets rehash a little bit of the law of obviousness as handed down from on high by those at the Supreme Court. You know, the ones who obviously know what is “common sense,” at least more so than those who understand that science is unpredictable and the art of inventing is anything but predictable, and what seems to be “common sense” is frequently misplaced naivety. Thanks to the US Supreme Court’s decision in KSR v. Teleflex that which is “common sense” is obvious. There are no hard and fast rules for what is obvious, rather the Supreme Court thought it wise to leave it as a case by case determination, so the 6,000 or so patent examiners are left to figure it out for themselves on a daily basis, applying common sense as they interpret it.  Now those in the audience who are snickering need to STOP right now. We are really lucky that there are only 6,000 or so different interpretations of what is common sense, down from the infinite number there could be. Please also ignore the reality that with 6,000 different decision makers, each of whom have no objective criteria to follow, cannot hope to possibly provide uniform decisions across the examining corps. And for goodness sake, don’t even mention or notice that this unequal treatment might have Constitutional implications. That stuff about similarly situated individuals really was more aspirational anyway.

OK, now with the table set, lets explore the tax code. Well, OK, not really the tax code because that would take forever given the tens of thousands of pages and ultra small type. Lets focus on the part where the government raises taxes or perhaps the part where they threaten to raise taxes moving forward in order to pay for extravagant spending, you know the kind of spending that one engages in with borrowed money. I mean really, if any individual were to borrow, spend, borrow more, make less, spend, borrow more and so on, their credit card would be cut up in a New York minute, which for those unfamiliar with NY is far less than 60 seconds. Of course, when you can print money, tax and simply write IOUs to the Chinese, fiscal restraint is not something that comes naturally.

The objection I have personally to the borrow-spend-tax-spend-borrow-some-more philosophy is that it doesn’t work, at least if at the end of the day you want to be able to function without having enormous amounts of debt to pay off and interest payments that are so large you no longer have any hope of paying off the principal. I realize many who are reading are tempted to say that this is all obvious and hardly something that is new, but how can it be? The best and brightest minds in government have decided that taxing more, borrowing more and spending more will be a successful strategy for turning around the economy. So if the best and brightest minds think prolonged spending of more than you bring in and constantly borrowing to fuel the spending habit is acceptable and prudent fiscal policy, who is the Supreme Court to say that my invention is common sense?

So what is my invention? Well, I like to think of it as rather sophisticated, eloquent and perhaps even a little revolutionary. Maybe not revolutionary on the scale of Einstein’s General Theory of Relativity, but revolutionary in the same way that the forward pass forever changed the game of football. Yes, a game changing revolutionary invention is what I have. The best part about it is that at one point in time it would have been widely viewed as true, simple, correct and the only sane thing to do. Today, however, it is an earth shattering innovation, at least insofar as the Supreme Court defines innovations. I mean, if it isn’t common sense it has to be patentable, right?

What I propose is a method of stabilizing the economy and spurring job creation comprising an across the board TAX CUT for both individuals and businesses. Now I am fully well aware that this “invention” has certain prior art, such as perhaps the following speech by President John F. Kennedy, which is well worth the 2 minute investment in watching.

I am also well aware of other prior art, such as perhaps the speech below by President Ronald Reagan, which is well worth the 2 minutes and 41 seconds. In this prior art speech Reagan, at the end, encourages young people to start businesses and join the Age of the Entrepreneur. He also pays homage to Justice Scalia by a “gobbledegook” reference. Of course, Scalia’s reference was to the patents being gobeledegook, while Reagan’s statement relates to the tax code.

I am sure there are other pieces of prior art, even some pieces of enabling prior art, or come to think of it wildly successful and unimaginably enabling prior art, but I am going to hang my hopes on secondary considerations. Secondary considerations, sometimes called objective indicia of non-obviousness, look to see if there are countervailing reasons why an otherwise obvious invention might really not honestly be obvious after all. One of the best is a long felt and unresolved need. Since our economy is desperately in need of saving and the troubles facing families and business seem as if they have been going on for an extremely long time, I think there may just be a long felt and unresolved need. And I am here to help!

Proponents of tax increases point out that they merely want to do away with tax decreases, so it really isn’t a tax increase, although your taxes will go up. They also claim that the rates would merely approach the tax rates during the Clinton Administration. Of course, there is a substantial difference between raising taxes when the economy is booming and when the economy is foundering. I mean if we are going to be perfectly honest there is a big difference between taking a higher percentage when you have a lot more than taking a higher percentage when you have a lot less. I know politicians are not all that good at math, but in the “taking more when you have less” category what results is less left over than in the “taking more when you have more” category. Unfortunately, you really cannot mention that in “polite” company without being offensive I suppose.

As far as I am concerned, our leaders ought to be calling plays from a playbook consisting of plays that have worked. I see no advantage calling plays from a a playbook comprised of plays that have never worked, hoping this time will be different. Isn’t that what Einstein called the definition of insanity? The fact that the plays have never worked does not necessarily mean they are “over due” for success. Perhaps the plays that have never worked are in the “crappy plays book” because they are, well crappy.

So, this being said, I am optimistic that a patent covering a method of stabilizing and growing the economy comprising tax cutting has at least a chance, maybe even a snowball’s chance in DC or chances similar to the odds that the Saints will eventually win a Super Bowl! Yes, pigs can sometimes fly, as it turns out, and if you listen to our leaders in DC cutting taxes is anything but obvious.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments.

  1. step back February 17, 2010 6:56 am

    Hi Gene,

    It’s time to “duck” for cover.
    You right wing is showing.

    If reducing taxes towards zero is such a good and workable solution, then “common sense” dictates that after we cross the zero line, we should keep going. That’s right. we should have negative taxes. Instead of government taking money away from members of the public, it should be giving mo’ money to them!

    What’s that you say?
    We’re already doing that?
    Bailouts? Entitlements?
    Hey in that case, Mr. Economy should be so stimulated by now that he’s doing cartwheels. It can’t get better than this. 😉

  2. Tom February 17, 2010 7:24 am

    Gene, your illustration of the playbook made up of never-successful plays reminded me of an example, perhaps a corollary.
    It goes like this: If I make a bad decision and it comes out OK, is the decision still bad? Of course it is.
    The example that brings this into sharp focus is the person who sells all he has and buys Lotto tickets. He wins. If the decision is better than it was at the beginning, should he now take all he has (including his Lotto winnings) and buy Lotto tickets?
    The point is that his probability of winning the Lotto don’t change (much). The decision is still a bad one, because his probability of losing is still very high.

  3. Tax Cutter February 17, 2010 7:25 am

    The best book you’ll ever read (if you haven’t read it already):

    The Way The World Works.

  4. David Boundy February 17, 2010 9:55 am

    The claim would have to be commensurate with the scope of enablement.

    Short term tax cuts as stimulus to overcome a short term economic downturn (Reagan 1981, Obama 2009) do indeed have a stimulative effect.

    Structural long term tax cuts that lead to a permanent deficit, or cuts that exceed the current surplus (e.g. Johnson 1965, Reagan after 1983, Bush 43 2001) tend to do more harm than good.

  5. pop February 17, 2010 10:26 am

    -Gene

    I am a libertarian, in my own way, just to set the context for my next comment. Debating about monetary policy, the federal budget, and economic indicators is about as useful as debating why the color blue is immoral. Any way you mine the data, somebody will come a long and say, “yes but you forgot to factor in/out this variable which supports my party policy.” One thing is clear, Clinton may have had high taxes, but he was the first president in a very long time to have a balanced budget, which none of the fiscal conservatives in the republican party have managed to do before or since.

    I find it funny, although not laugh out loud funny, that the “conservative” party of “taxed enough already” and “small government” can’t manage to stop spending. You can’t have your cake and eat it to. You either have to tax more, or spend less, and nobody is going to get elected on a ticket that preaches that. Everybody wants low taxes and exorbitant social services and defense spending, but that just isn’t sustainable.

    The real problem, that nobody wants to address, is not consumer confidence, it isn’t lack of credit, and it certainly isn’t too much taxes. The real problem is that everybody, and I do mean everybody, is consuming more than they produce. As a country we run a trade deficit. As a government, we spend more than we tax. As a people, we spend more than we make, and we borrow more than we can pay back. Lower taxes and inflation aren’t going to make people produce more, only spend more, which is what got us into trouble in the first place. Depending on your outlook, we are either heading for stagflation, or are already there.

    There is only one way to fix the economy. People have to start producing more, spending less, and paying off their debts.

  6. American Cowboy February 17, 2010 10:35 am

    Gene, sorry but your invention is not patentable.

    It would have been obvious to those of ordinary skill in the economic arts. The fact that the idiots who hold public office can’t figure it out (or they choose not to implement it because they benefit from pandering to voters who think the government can give them a free lunch) does not prove non-obviousness when considered in light of those of ordinary skill in the art.

  7. Gene Quinn February 17, 2010 10:54 am

    Step-

    Come on man! Where do you see me saying that taxes should tend toward zero? I am happy to engage in a debate on appropriate tax policy, but trying to put words in my mouth and suggest that the government should pay us, which is not conservative but rather socialist, doesn’t seem particularly helpful.

    -Gene

  8. Gene Quinn February 17, 2010 10:59 am

    David-

    I would tend to agree that long term tax cuts lead to deficits, but I do think you are over simplifying at least Reagan and Bush 43. Reagan was addressing a situation where there were no incentives for top earners to succeed because the government would take an unacceptably high percentage, which was a disincentive to succeed and put the sums at risk necessary to succeed, not to mention the time necessary to succeed with ever decreasing return. He also started the military engine that cause the Soviet empire to collapse. So deficits are bad no doubt, but I do think they need to be considered in a greater context and setting a prolonged expectation of keeping more was probably exactly what was needed to unleash America at that time.

    Insofar as Bush 43 is concerned, lets not forget the devastation of 9/11 on the economy and allowing individuals to keep more for a prolonged period and setting that expectation was also what was needed. Having said that, the problem of Bush and the Republicans in general was that during the 2000’s they spent far too much on things that were discretionary. More spending with less taxes only defers the inevitable problem down the road.

    -Gene

  9. Gene Quinn February 17, 2010 11:05 am

    POP-

    I agree with everything you say. What I would point out is that I did vote for Clinton (at least the second time) and think the partnership he cultivated with Newt Gingrich to reform Welfare and have a balanced budget was exceptionally appropriate. Also, at times when the economy is booming taking more when there is more left over is not offensive, and seems prudent fiscal policy.

    As for the “conservative party”, there has not been a lot “conservative” about the Republican party over the last few years, which is why they had their head handed to them in 2006 and 2008. Unlike many conservatives though I think Bush was right to prop up the financial institutions with TARP, although Obama et al are repeatedly trying to take credit for that which Bush really did. Having said that, if the Republicans want to have any chance in 2010 they need to ditch the tax less spend more philosophy and get back to conservative roots.

    I personally think the Tea Party will be best viewed as the “kick the incumbents out” society. We need fiscally conservative Republicans and fiscally conservative Democrats. We need to spend less and borrow less as a nation and live within our means.

    -Gene

  10. Gene Quinn February 17, 2010 11:06 am

    AC-

    So you mean that just because something isn’t “common sense” doesn’t mean that it is patentable? (tongue firmly planted in cheek).

    Too bad the Supreme’s weren’t more clear on the definition of one of ordinary skill in the art. Perhaps some get so educated and are so smart that they just lose sight of “common sense,” which after a while isn’t so “common” after all.

    Cheers!

    -Gene

  11. pop February 17, 2010 11:32 am

    -Gene

    As far as common sense is concerned, I think there are two major problems. Some things are so common and obvious that many people don’t bother to write them down or even mention them. A person would hope that these sorts of things would be seen through if ever taken to court, but as was mentioned, who is to say what is common sense to a person of ordinary skill, and who decides who is of ordinary skill? When you dress relatively simple things up in complicated computer jargon, and I am coming back to software here for a moment, or even medical jargon, or any jargon for that matter, they can seem very non-obvious.

    Another problem is that people, and mostly companies, do giant land grabs like the ones that take place in the domain name world. It isn’t that “mysuperawesomedomainname.com” wasn’t common sense or that a person of ordinary skill couldn’t have thought of it, just that nobody needed it or wanted it at that moment, so they buy them up by the thousands and sell them to people for robbery prices later on.

    Large companies have legal departments who sit around all day dealing with legal matters, and most of them have their own patent lawyers and patent layer sections who sit around all day and deal with patents. It isn’t a surprise that they thousands and thousands of patents each. I don’t think that IBM or Microsoft or Apple are these great innovators who just getting their just rewards for all their hard work. Instead, they piggyback on the computer science and programming community in general and then have their lawyers write up everything they think will pass muster and claim it for their own.

    You have argued that small businesses should use patents in their toolkit, and I don’t disagree, but with the cost and effort required to get one as a percentage of a companies resources, it is no small wonder that the large companies have the lions share, and not because they are doing the lions share of the innovating.

  12. Gene Quinn February 17, 2010 11:40 am

    POP-

    You have to write this up for publication. You are hitting the nail straight on the head.

    1. Some things seem so common and obvious people don’t bother to write them down. That is true, and probably why the Supremes left the teaching, suggestion and motivation test. The trouble is now the test for obviousness is not objective. It also encourages no writing down of things and archiving knowledge. Something needs to be done about this because the lack of an archive of knowledge, even common sense things, is a societal problem (at least in my opinion).

    2. Large companies are certainly not doing the lions share of innovating, and something does need to be done to help small businesses. I have been talking with some folks about this and I would like very much to see something change moving forward. I also think David Kappos is interested in doing some things that could help. People are working on this problem, which is indeed very real.

    More to come.

    -Gene

  13. pop February 17, 2010 12:19 pm

    -Gene

    A funny story just happened to me that almost exactly illustrates the point. I have a friend who called me last night and said he was doing some problems involving deriving things from the formal proof of a limit definition. He asked me if I had ever worked with problems like that involving epsilon. I told him that I couldn’t ever remember epsilon being involved. He immediately got a bit smug and said that I probably couldn’t help him because I had probably only ever been used to special cases of the proof, where he was working with a ‘higher’ level, more abstract version.

    He sent me an email this morning which included pictures and a logical proof written out with all the symbols, and I laughed. I emailed him back and said that just throwing random Greek letters into the proof doesn’t change it any. If I write “change in x” instead of delta, and “change in y” instead of epsilon because it is easier for people to understand who don’t deal with all the jargon of Greek letters and formal math symbols, that doesn’t make the proof any different.

    This isn’t just a problem with patent applications, but with academia as well. Specialists come up with jargon, which makes life easier for those on the inside, but to an outsider, makes things which aren’t that difficult to understand seem impossible.

    There is also the problem of the “Sanitation Engineer” who didn’t feel like being called a janitor, and all the “Software Engineers”, who don’t feel like being called programmers. You can make mopping and taking out the trash seem very complicated and technical if you want.

  14. Gene Quinn February 17, 2010 1:58 pm

    POP-

    You are right again. There is a lot of this type of change without consequence or difference that gets embodied in patents, I would say particularly software patents. There are tons of examples, and all the ones I can think of come from huge companies that seem to file on everything. No small business would ever see the value in filing a patent application on a method of using e-mail to coordinate meeting times.

    The trouble is that with software it hasn’t been patentable for long and most of the best, easiest to find prior art are issued US patents. So an awful lot gets through because there is nothing that can be found and a finite amount of time for searching and finding stuff. The best thing that could be done by those who oppose the patenting of nonsense would be to create an archive of easily searchable information and references. There are some who are “anti-software patents” and they just want nothing patented, but those who are not adverse to patenting if there is an innovation could combine to create a database of information that could be used to ensure trivial crap is not patented.

    -Gene

  15. step back February 17, 2010 4:11 pm

    Gene–

    You have obviously struck a prime nervous chord with your readers on this one (which as a widely read blogger, it was probably your intent to do).

    The term, “common sense” is tightly intertwined with politics.

    No doubt, many of your readers can recall a time when “Common Sense” was the title of a short book (or pamphlet) published by one Thomas Paine. The phrase “Common Sense” was not intended back then in Revolutionary times, to convey to the reader/listener that if you don’t know what I mean by “common sense”, then you have none and you are clearly the village idiot. Instead it was merely the title to a detailed articulation that spelled out slowly and in logical sequence what the speaker/writer intended to convey.

    On the other hand, in modern times, the phrase “Common Sense” has been subverted to mean exactly the opposite, namely, I am not going to articulate any details to you and if you don’t instantly know what I mean by “common sense” then you have none and you are indeed the village idiot and I will not spend more time explaining it to you.

    It is in the latter sense that the USPTO often applies the term “common sense” when making out a 103 rejection. But in doing so, they are violating the legal mandate requiring them to clearly explain their position and to not engage in arbitrary and capricious decision making.

    In other words, “common sense” is a cop out for avoiding your duties as a communicator to clearly explain your position. (By “you”, I don’t mean you Gene. That should have been common sense. 😉 )

  16. Jeff Lindsay February 17, 2010 5:36 pm

    Sorry, Gene. The disclosure of your invention would be detrimental to national security and would have to be stifled with a secrecy order. Your patent application could imperil the careers of many politicians and weaken confidence in the Ponzi scheme of printing trillions of dollars lacking any backing other than confidence. Tax and spend policies coupled with accelerating creation of fiat money must continue for the good of this nation. It worked for Zimbabe, Yugoslavia, and the Weimar Republic. Why worry now?

  17. Don February 17, 2010 5:50 pm

    On this anniversary of the so-called stimulus, there is little doubt that a broad, across the board tax cut would have done far more to quickly, broadly, and fairly stimulate the economy, as opposed to the complicated, bureaucratic, highly politicized approach selected by our power-hungry politicians.

    As for spending, this clearly is the crux of the matter. To conquer the spending problem, there is no choice but to overcome the idea of “entitlements”; i.e. the concept that anyone is “entitled” to government largesse. Budgeting needs to be annual, and eligibility for government transfer programs needs to be re-set every year based on available funds in that year. When we converted to a system where we obligated funds from future years to beneficiaries based on guaranteed eligibility criteria, we created huge unfunded liabilities that doom our government to increasing debt levels that we have no right to impose on our children.

    Now, the idea of eliminating all entitlement programs, I suspect, is truly patentable in this day and age.

  18. Mike February 17, 2010 5:54 pm

    Pop :

    Your comments are exceptional. I enjoyed reading them.

    -Mike

  19. Gene Quinn February 17, 2010 6:31 pm

    Jeff-

    I don’t think we can call the mounting unfunded liabilities (i.e., Medicare and Social Security) a Ponzi scheme. Ponzi schemes land you in jail, witness Madoff. Unfunded liabilities land you in Congress. All things being equal, if we were going to talk about magnitude of harm Madoff should be free and Congress should be in jail. Of course, in a perfect world they would all be in jail.

    I must admit, I never considered the national security angle. Sadly, you are probably right.

    -Gene

  20. Gene Quinn February 17, 2010 6:37 pm

    Don-

    I think next week I might have to write Part III, which might actually be a collection of a couple inventions. 1. Spending no more than what you take in; 2. Raising the retirement age; 3. Drastically cutting entitlement programs and recognizing they are not “rights” but “privileges”; etc. etc…. which I might wrap together as a Method and associated system for saving the republic for future generations (i.e., our children). I suspect that would, indeed, be patentable. The thought of doing anything fiscally responsible like this has likely never been tried or contemplated as possible. Come to think of it, it might ACTUALLY be patentable under the KSR test because it would be anything but obvious to try because success could hardly be anticipated. Oh… I like this!!!

    -Gene

  21. Noise above Law February 18, 2010 9:52 am

    Gentlemen,

    An impressive discussion with respect and clear writing from several authors.

    Bravo. A treat to read.

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