Senator Grassley talks about patent reform at Iowa town halls

By Paul Morinville
January 10, 2016

senator-chuck-grassley

Senator Chuck Grassley (R-IA)

Senator Chuck Grassley’s town halls are legendary, at least in Iowa. Since May of last year, I’ve been attending as many as I can to explain why S.1137, the PATENT Act, is damaging to inventors. If you’re in Iowa, I’d recommend you attend one. You learn a lot.

The relationship between Grassley and Iowans is unique to say the least. In every county, he knows people by name, and someone knows him, his family or someone he knows. They’ll preface their question with a story about Grassley’s wife, his cousin, his mother-in-law or one of his old friends. To Iowans, Grassley is their friend, their relative, their leader, their neighbor and much more. Iowans trust Grassley like they do their own family, and they know Grassley’s going to do what is right, and especially what is right for them.

I watched Grassley field question after question in detail on diverse subjects from current events, terrorism, water rights, farm legislation, TPP, foreign affairs, the VA, taxes, regulation, Obamacare, and even legislation passed 25 years ago having to do with railroad retirement – and Grassley remembered exactly how he voted on all of it. His answers were factual, descriptive and broadly painted in simple terms so everyone understood the details and why he took a particular position.

He was standing and speaking all day, which would have exhausted a younger man. It exhausted me. If Grassley was tired, it was hard to tell. For 82 years old, this guy is sharp, fluid, healthy, and funny.

The first meeting this week was in Grundy Center, IA, during which a question about patent reform was asked. Grassley answered that he was trying to stop patent trolls, which he described as a person who buys up patents but never intends to build a product, and then sends threatening letters to small businesses demanding thousands of dollars or they will get sued.   Notably, he said that it costs our economy $83B per year.

Grassley allowed me to discuss how S.1137 will harm inventors two or three times last year and Grassley knows who I am and why I’m there. I asked if I could respond to his patent troll answer and didn’t expect him to say yes. But after Grassley made certain everyone knew I was not an Iowan and did all he could to discredit me, he let me have the floor.

I told him that I had been looking for examples of recent demand letters, but had not found any. MPHJ and the effects of the America Invents Act have already taught everyone that sending demand letters is bad business, so nobody sends any out. Now they just sue.

Then I explained I am an inventor and my sole asset is my patent. For a hypothetical moment, I told Grassley he is an investor and he invests in my company. I take his money and commercialize my patent. But big corporations see it, make their own products based on the patent and flood the market. I can’t compete with their deep pockets and I go out of business.

I then explained that he, as an investor in my failed startup, now owns my patent. He does not intend to make a product because the market is already saturated by the huge corporations who stole it to begin with. If he’s going to get his investment back, he’s got to enforce the patent, and that, of course, makes him a patent troll. He’s got one other option and that is to sell it to another patent troll.

It’s pretty obvious but I said it anyway— If he can’t get his investment back, he won’t invest to begin with. Without question, S.1137 will kill his definition of patent trolls, the bad actors shaking down mom and pop main street small businesses, but it would also make it impossible for legitimate startup companies to attract and obtain funding because angel investors and venture capitalists are thrown into the same legislative barrel in S.1137. Making it harder for legitimate startups to get funding is not a winning solution.

What I hope Grassley saw in that hypothetical moment is that S.1137 will kill the very economic engine that we need to foster in order to open up capital for startup companies that bring high paying jobs with good benefits to the US economy and, importantly, to his family of Iowans.

I didn’t explain that the $83B economic cost number has been soundly debunked. Grassley is good with numbers and I really don’t think he knows the number is fake. However, whoever gave him that number knows it. Maybe if his staff reads this, they will let him know he is using false numbers to support very dangerous legislation.

At the end of the meeting, he came over and shook my hand. Then he told me I was doing a good job. I’m not sure what that means, but I’ll chose to believe Grassley is listening and he needs more people explaining the damage of S.1137

Despite Grassley pushing S.1137, which will deal severe damage to inventors and to me personally, I walked away from 13 town hall meetings last week feeling a little like the Iowan I once was, I like the old farmer.

The Author

Paul Morinville

Paul Morinville is Managing Director of US Inventor, Inc., which is an inventor organization working in Washington DC and around the US to advocate for strong patent protection for inventors and startups. Paul has been walking the halls of Congress knocking on doors and sitting down with hundreds of offices to explain the damage suffered by inventors due to patent reforms. Paul is an independent inventor with dozens of patents and pending patent applications in enterprise software. He is also CEO of OrgStructure, LLC, an early stage enterprise middleware provider in Northwest Indiana.

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 12 Comments comments.

  1. Frank Morosky January 10, 2016 3:18 pm

    Well written and good job Paul in helping represent us small inventors to the legistlators that will ultimately make a difference. Grassley does listen to us and is receptive to our communications. Keep up the good work and we are doing what we can to assist in the effort.

  2. Benny January 11, 2016 5:27 am

    An underlying theme of the article is that big corporations are harming the small inventors, and the law is skewed in that direction. Although the US patent system is obviously unfairly biased towards those with deeper pockets, I don’t think we should lose sight of the fact the the big corporations, not the small inventors, are driving the economy, and that many (probably the majority) of talented inventors and engineers are employed by those corporations.
    No, I don’t work for Google,

  3. Paul Morinville January 11, 2016 10:44 am

    Benny, Do you have any information to back up your statement “the fact the the big corporations, not the small inventors, are driving the economy,”? Or “many (probably the majority) of talented inventors and engineers are employed by those corporations”?

    The vast majority of new technologies are invented by independent inventors, startups and universities. These technologies are often initially commercialized in startups, and this is where most job creation happens. Many startups end up being acquired by big companies. Then big companies make the commercialization of the invention more efficient and often shed jobs as a result. I’m not sure what you mean by “drive the economy”, but I would say big companies are in a maintenance mode rather than a driving mode. It seems startups take that title.

    Along the same lines, you preface inventors and engineers with “talented”. I have doubt that more inventors and engineers work for big companies than for startups or on their own, but I think it’s hard to say that more “talented” engineers and inventors do. If you have something that backs that up, I’d sure like to see it.

  4. Eric Berend January 11, 2016 11:02 am

    @ comment #2 (“Benny”)

    Perhaps you do not have the breadth of perception necessary to understand that ‘big corporations’ have influenced business operations as restricted by U.S. laws, such that the “talented inventors and engineers” are left with little other choice than to perform ‘work for hire’ rather than enjoy a fair opportunity to own some, most or all of the economic fruits of their genius.

    When last I looked, the U.S. Constitution specifically describes a patent as a (limited) property right. This observation is corroborated by generations of American economic experience and U.S. legal jurisprudence.

    What part of that, do you not understand? — or rather, prefer to interpret as as being reserved “only for billionaires”?

    Your disingenuous viewpoint reads in like manner as many ‘shill’ sycophants for said billionaire giant corporate interests, led by the recently re-named Alphabet, Inc. (or, is is a LLC?) formerly known as Google.

    This mendacious entity is determined to own any and all forward looking technologies for its benefit without regard to ethics of origin nor tactics of acquisition. To view their activities in this area as anything less than a menace to annihilate small innovative technology based firms and individual inventors, is to severely mistake the magnitude of this literally existential threat.

  5. Benny January 11, 2016 11:04 am

    Paul,
    the nearest information I have to back up my statement that big corporations drive the economy is your own comment – as you say, these corporations, not the startups, efficiently commercialize (i.e., monetize) the innovations. Have you ever purchased an innovative, IP protected product manufactured by a company with less than 100 employees? Didn’t think so.
    Where I live, being acquired by a big corporation and retiring young is the aspiration of every startup company (Waze, Annpuma, etc.) As for your doubts over employment prospects for talented engineers, I can only assume that it comes from someone who has never worked in the R&D of a hi-tech firm, big or small.

  6. Benny January 11, 2016 11:13 am

    Eric,
    I’m not a shill for anyone. I work in a medium sized company, we can’t afford to file patent applications willy nilly for dubious innovation, nor risk being sued for infringement by a competitor. The US patent system is skewed against small companies like ours, and our best bet of getting ahead is to have the financial backing of a bigger corporation to drive our IP. If you can’t beat them…

  7. Paul Morinville January 11, 2016 12:07 pm

    Benny, I worked for Dell in their product development group in the 1990’s. Lots of talented engineers in hardware, software and manufacturing. But Dell doesn’t invent the next big technology. They commercialize it and they are damn good at that. The next newest peripheral or hard drive or monitor is purchased from some other company. Dell sometimes drives the feature set, but the engineering is often done in the peripheral company. In the 90’s some of those companies were small and I remember a couple less than 100 employees. Today the PC industry has consolidated and most of these once small companies are now big.

    Monetizing is different than efficiently commercializing. Monetizing is done by both big and small companies. Efficiently commercializing is more a matter of scale. More efficient manufacturing, sales, distribution, etc. can often only be effectively done in a big company. Efficient commercialization drives down costs of building the invention and increases its availability, and thus the cost to the consumer is lower. This is a very valid economic role and one that helps keep America on top of the world, but it is not driving the economy – it is maintaining the economy. New technologies that create new jobs drives the economy, and that is not the skill set of big companies.

    No company starts with 100 employees. It starts with a couple and then grows. Google is an example of a company selling a patent protected product with less than 100 employees back in the late 90’s. Others are HP, GE, IBM, and most of the companies on the F500 list. If the company has a product, it is normally started up protected by a patent. The world is full of companies that did not protect their inventions only to be run out of business by big business.

  8. Janet Mlinar January 12, 2016 10:07 am

    Thank you Paul for all your efforts getting patent reform done and backing up the independent inventor. Although I believe when a politician says “good job” or “keep up the good work your doing” is just to appease the person in the moment, right now, politicians are our only outlet in getting laws passed. The truth is, Corporations own our own government. Including politicians. Patent reform to politicians is a game they know Corporations will win. We need Corporation reform first. Or they will continue to do what they do best – take. Yet how can we do that when our own government owes them trillions of dollars. It is not the American people who owe this money either. The money madness must stop. Corporations want not only money but the control of where the money goes. The billion dollar corporations will continue to inflate themselves, not because they need the money, they need to control the money. All of the new inventions people have come up with and they either are waiting to be built or put on a shelf because it interferes with our current systems of either oil or other money making businesses. Once Corporations had control of our money they now control us and every dollar we try to make. The internet is our best tool to try and expose these Corporations and certain people making a mess of not only the patent system but our political process and way of life. We can turn this all around I believe by increasing technologies that exceed their doings and exposing them for what they are really worth. And then we can finally all start living a good healthy life. One good thing can follow another if we are not afraid to do something humane.

  9. Randy Landreneau January 13, 2016 12:23 pm

    Paul – Thank you for your excellent work. After all the work to get true information out, I am shocked to hear that Senator Grassley is basing his judgment on the absurdly false $83 billion figure. That figure was based on the short-term drop in a stock after an announcement of patent litigation, without considering the later increase in value after settlement, licensing, or other disposition. In some cases, the stock values rose above the initial points upon settlement of the infringement case, proving that this study was severely flawed. This figure was so debunked that the proponents quickly came up with another much smaller figure, based on very questionable private, unverifiable data.

    If Senator Grassley is still believing the false propaganda, how many others are also? The fight is far from over.

  10. staff March 12, 2016 3:16 am

    ‘bad actors shaking down mom and pop main street small businesses’

    Rarely if ever does this happen for several reasons. As you said few if any patent holders send out cease and desist letters and haven’t for at least a few years. The law changed. Doing so will almost certainly land you in a distant juris in a DJ action.

    All these fictionalized issues by large multinational infringers is a shell game to divert Congress and others away from their theft. Just because they call it ‘reform’ doesn’t mean it is.

    For our position and the changes we advocate, or to join our effort, please visit us at https://aminventorsforjustice.wordpress.com/category/our-position/
    or, contact us at tifj@mail.com

  11. Gene Quinn March 12, 2016 12:20 pm

    Staff-

    What law changed?

    What is your evidence that there is no shake downs of mom and pop main street shops?

    Who is bringing declaratory judgment actions in distant jurisdictions? The mom and pop small businesses being extorted for a few thousand, or sometimes a few hundred dollars? Are you really saying that mom and pop small businesses are hiring law firms and paying them tens of thousands of dollars (if not more) to file declaratory judgment actions? What is your proof?

    Seriously, you make outrageous claims that are either blatantly false or grossly misleading. So please either provide verifiable factual support or retract.

    -Gene

  12. Gene Quinn March 14, 2016 11:38 am

    Doesn’t look like Staff is going to address any of my questions. Not surprising since the comment was full of inaccuracies. The law has not changed as was claimed, and there are in fact shake downs of mom and pop main street shops by bad actors. It does no good to lie about what is really happening in the industry.