EDITORIAL NOTE: The following article has been posted as an online petition you may sign by visiting IndependentInventorsofAmerica.org. On Friday the United States Senate held additional hearings and seem poised to act relatively quickly on the Senate version of patent reform. For information about how to directly contact your U.S. Senators please see Senators of the 113th Congress.
We represent independent inventors and small patent-based businesses across the country and we are against any patent legislation that includes provisions of the Innovation Act (H.R. 3309) and the many variations and additions under consideration in the Senate. This legislation will levy grave harm upon independent inventors and small patent-based businesses, as well as the investors we need to help commercialize new technologies and to protect our inventions.
The American patent system is a trade between an inventor and society. An inventor discloses an invention for all to see and build upon, and the government grants and protects for the inventor an exclusive right to the invention for a short period. The American patent system was intended to enable anyone, regardless of economic status, race or gender, to profit from the invention of something new and valuable. This system has worked as intended for over 200 years, fueling the creation of the greatest economy in the world.
The very nature of new and useful patented inventions causes disruption of the status quo. Thus, since the mid-1800’s, vested interests have sought to use patented inventions without having to deal with patent holders by repeatedly petitioning Congress to weaken patent protection. Despite these calls, Congress has resisted most efforts to weaken the patent system. That Congressional restraint has proven wise is evidenced by the level of commercialized innovation that has occurred in America through the patent system, which continues to drive our economy like no other nation.
Today, Congress is under another call to weaken patent protection. This time the alleged culprit is a so-called “patent troll” who, according to some reports, hijacks inventions and while providing no product and therefore no societal value, extorts billions of dollars from the economy. This story could not be further from the truth. The argument is based on highly questionable data. Some of the claims are that patents asserted by so-called “patent trolls” are much weaker than patents asserted by others, that these entities cause billions of dollars of unnecessary cost, and that the number of patent infringement lawsuits has risen dramatically due to the so-called “patent trolls.” All of these assertions are highly disputed.
The Government Accounting Office Report required by the America Invents Act finds that there is no “patent troll” problem. Data supporting the claim of billions of dollars of reported cost cannot be verified and actually represent primarily voluntary and court directed license agreements for valid patents. In addition, analysis of patent litigation shows that the number of patent suits relative to the number of patents issued today remains consistent over the 200 plus year history of the patent system with the exception of a short period prior to the Civil War when the rate was higher than it is today. The reports supporting this latest round of legislation are simply not valid.
Further, what is being characterized as a “patent troll”, and is the target of the proposed legislation, is really an investor. As individual inventors and small patent-based businesses, we need investors to practice and protect our inventions. A patent is sometimes the sole asset we can leverage to attract that investment. Damaging investors therefore damages inventors.
Provisions in current legislation under consideration in the Senate are harmful or fatal to individual inventors and small patent-based businesses. For example:
Loser Pays will significantly increase risk to the inventor for defending a patent. A patent infringement lawsuit is incredibly expensive. The typical independent inventor has very limited financial resources. Furthermore, most inventions have a limited market, often small enough that the increased risk of paying an opponent’s legal fees could make it economically unfeasible to protect the invention even if the funds were available. This provision could be fatal for a large percentage of inventions.
Fee Shifting “Joinder” allows investors and others to be personally liable for the legal fees of a defendant if the plaintiff does not prevail. Few investors will risk personal assets beyond what is directly invested in a business, so this provision will severely limit investment in new technologies. With no investment, this is fatal to most inventors, who are common people.
Elimination of Post Grant Review Estoppel – Under the current law, a Post Grant Review prohibits the petitioner from later arguing “any ground that the petitioner raised or reasonably could have raised during that post-grant review.” The proposed legislation strikes “or reasonably could have raised.” This will allow a defendant to bring multiple sequential Post Grant Reviews in an effort to defeat the patent holder by burning financial resources and time with effectively perpetual litigation. This provision could easily become fatal to most inventors.
Patent Term Adjustment – The proposed legislation will eliminate any patent term adjustment for a delay in patent issuance caused by the USPTO. For a patent that takes many years to prosecute, of which there are many, the enforceable life of the patent could be cut in half or worse. This is not fair to the inventor and could be highly damaging or fatal to a large number of patents. It will also discourage the patenting of inventions and encourage keeping inventions secret.
Enhanced Pleadings and Limiting Discovery – In an already expensive and complicated process, these two elements require the patent holder to spend more money up front and operate with less information than is needed. These weigh heavily against the patent holder’s ability to defend a patent and reduce the ability of the judge to manage the case effectively.
The purpose of the American patent system has been to promote innovation. The proposed legislation will have the opposite effect. In addition to the harm these changes will have on the groups mentioned, these changes represent a 180 degree shift from the ideals with which the American patent system and America itself were created. That vested interests could succeed in such an attempt is unthinkable.
For the good of America, we stand firmly against the proposed legislation and any future legislation that would weaken the American Patent System. We are for any legislation that fully funds the Patent and Trademark Office with all of the fees it generates so that patent quality can improve and application pendency time can decrease.
About the Author
Randy Landreneau is an inventor and product developer. He is President of Complete Product Development and a former President of the Tampa Bay Inventors Council.