Issa seems to believe patents are an entitlement, not a property right

By Paul Morinville
June 28, 2017

Congressman Darrell Issa (R-CA).

Congressman Darrell Issa (R-CA).

In the June 13th House Judiciary Subcommittee hearing on the effects of TC Heartland, Chairman Darrell showed just how conflicted he is. He first states that patents are property rights and they must strong and reliable. He ignores testimony about China cleaning our clock on patenting, venture capital, startups and job creation due to weak patent rights. He then mocks the messenger. Despite his opening statement lauding property rights, Issa closes the hearing by saying that he is going to file an amicus brief against property rights. This hypocrisy should not go unnoticed.

Issa opened the hearing talking about strong property rights. “The rule of law is key to preserving property rights and nowhere is this more true than with respect to intellectual property. Intellectual property has become the backbone of the last half of the 20th century and without a doubt will be the leading revenue generator in the 21st century. Strong and reliable IP protections depend on Congress getting their rules right to both encourage the development and production of the next generation of innovation…”

Those are strong words strangely coming from a major driving force behind passage of the America Invents Act (AIA), which severely damaged property rights by creating administrative tribunals called the Patent Trial and Appeal Board (PTAB). These administrative tribunals are invalidating property rights at a rate greater than 90% without due process and without a jury, which this week became the core question in a case called Oil States taken up by the Supreme Court.

The effects of the PTAB are exceptionally damaging to small entities. Inventors and startups can no longer defend their patent rights because contingent fee attorneys and investors have left the patent market. That opens their property to unfettered theft by huge multinational corporations, which has now become rampant theft. And rampant theft destroys the startup ecosystem as early stage investors can no longer get a return on their investments and move their money to China and elsewhere where patent systems have been made stronger.

The AIA was made law in 2011. Not so coincidentally, China began strengthening their own patent system the same year. Throughout the hearing, Professor Adam Mossoff of the Antonin Scalia School of Law at George Mason University explained the damaging effects to the U.S. economy of the PTAB and recent Supreme Court’s decisions hostile to patents. He warned that if this continues, venture capital, startups and the economic benefits will move to China.

But the truth is this is already happening. In 2015, nearly twice as many patents were filed in China (1,101,864) than in the U.S (589,410). Venture capital is fleeing to China as a result. In the U.S., “Nationwide, the number of angel and seed stage funding rounds… dropped 62 percent in the first quarter of 2017…” Not surprisingly, the number of startups in China are growing at a very high rate. While U.S. startups are at a near 40 year low. Entire new fields of technology are becoming controlled by Chinese firms. Clearly, venture capital, startups, new technologies and jobs are moving to China and that movement directly maps to the destruction of the U.S. patent system and China’s response strengthening their patent system.

But, Issa wanted to hear none of that. At around 1:19.25 of the hearing, Professor Mossoff explained to the committee how a weakened U.S. patent system is pushing patenting, technology, venture capital, startups and jobs to China. Darrell Issa responded to Professor Mossoff’s analysis by mocking the Professor and laughing at his comments: “I’ll now note that I’ve now heard that China is the country that we’re going to base the high mark of (laughing) of patent (laughing) tolerance on.” Please take a minute to review this exchange. It fully illustrates the arrogance, and the extreme lack of knowledge and curiosity on the part of a very powerful lawmaker who is ultimately responsible for writing our patent laws.

This was not the only time Issa mocked Professor Mossoff. At 1.14.35, Mossoff made the point that there is no statistically valid information that a patent troll problem exists, and that the term patent troll is so undefined and so broad that it encompasses even Thomas Edison. Issa again mocking Mossoff, laughingly said, “I’ve lived a long time. I never thought I’d hear Edison called a Troll in a hearing and before Congress.”

Issa closed the hearing referring Oil States. Oil States asks the question “Whether inter partes review, an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents, violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

Directly contradicting his own opening statement for strong property rights, Issa’s closing statements show that he will continue to take action to weaken property rights. “Lastly, I’m very interested in the case they just took up. I’m a strong believer that for decades we have had ex parte PTO reexamination that invalidated all or some of the claims. So I will be submitting an amicus in that case without a doubt…”

I suppose it is normal to defend a law they sponsored and pushed to become law. But the question in Oil States goes to the heart of what a property right is or is not. The Supreme Court’s answer will guide not only the patent system but potentially all property right disputes for generations. Issa’s definition is that patent is a property right, but that a property right can be invalidated in an administrative tribunal without a jury. If the Supreme Court were to answer with Issa’s definition, there is no protection to property left. In the case of patent rights, the ability of early stage commercialization of new technology will be severely hampered in the United States.

For the first 220 years of United States black letter law and precedent based directly on the U.S. Constitution, patents are property rights. Even the Republican Party Platform states that patents are property rights. Issa disagrees with all of that.

Issa seems to believe that patents are instead some sort of public entitlement like food stamps as is evident in his bill, the America Invents Act, and his continuing actions even last week. Issa’s hypocrisy is so blatant, so obvious and so up front that I’m not sure he even understands what he just said, which is a very dangerous problem. So long as Darrell Issa remains in key lawmaking position in the Republican leadership in Congress, venture capital, patenting, new technologies, startups and jobs will continue to flee from the U.S. to China.

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 17 Comments comments. Join the discussion.

  1. angry dude June 28, 2017 11:24 am

    I want this pos out

  2. David June 28, 2017 11:28 am

    No one should be surprised. Whether left, right, or centrist, Congress will do whatever it can to hold on to this power.

    This isn’t about patents. It’s about power.

    Once you understand this, the motivations of the various players become clear.

  3. Telling it like it is June 28, 2017 12:09 pm

    It should come as no surprise that Google is a large contributor’s to Issa’s campaign. https://www.opensecrets.org/politicians/contrib.php?cycle=Career&cid=N00007017&type=I

    Google is the poster child for the “efficient infringement” group. While Issa is a Republican, his positions on intellectual property are much more aligned than to that of liberal Democrats than that of Republicans. He’s from California and takes his money where he can get it — in this case, it is from the liberal, anti-patent establishment in Silicon Valley.

    Google isn’t stupid. They know how to play the game. In this situation Google is hedging their bets by paying off a lead Republican in case their preferred candidates (i.e., Democrats) aren’t in positions of power.

    With regards to intellectual property issues, Issa is no Republican — he is a Democrat being paid by liberal Democrats to advance their issues. One would hope that the Republican leadership in the House would recognize Issa for what he is — a mole for the Democrats.

  4. EG June 28, 2017 12:28 pm

    Hey Paul,

    I’m a registered Republican, but Issa is frankly a disgrace. In addition to his myopic views on patent rights, Issa, in my opinion, badly botched, for example, the conduct of the Benghazi hearings before the House-Trey Gowdy (a former prosecutor) really showed how badly an amateur Issa is in properly and thoroughly conducting the examination of witnesses to such Congressional hearings.

  5. Bemused June 28, 2017 12:37 pm

    Whoever is running against Issa – Democratic, Republican, Socialist, Anarchist – will get my campaign donation. Issa perfectly epitomizes the type of politician who prostitutes his vote to the highest bidder.

  6. Paul Morinville June 28, 2017 1:31 pm

    EG @4. I’ve been a Republican my whole life. I came of age during Reagan while enlisted in the Marine Corps. I voted in my first election for Reagan. I learned the principles of a free nation from him and his speeches. That my curiosity and I began reading about why America works so well and how this great experiment drove our nation to the greatest economic, military and just society the earth had ever seen.

    Because of people like Issa, I am no longer a Republican. The fact that Republicans in Congress put him in such influential positions makes my anti-republican commitment even stronger. I feel fully betrayed. I am also not a Democrat.

    I find this little adventure of the last four years in Washington enlightening, educating, fabulous and truly disgusting. People like Issa must never be allowed to make law. He has threatened me, yelled at me, pointed his bony finger in my face, attempted to find and threaten anyone supports me, and threatened any lobbyists working with me.

    While Trump may or may not drain the swamp, we certainly as voters need to oust people like Issa. And more importantly, we need to stand up and say something…. do something… get active… raise hell… save our country.

  7. JPM June 28, 2017 1:41 pm

    This is not surprising. Darrell Issa is a shill for Google. He is all for weakening the patent system. Google has been one of his top donors for many years according to opensecrets.org

    2016 (Google / Alphabet #1 Donor)

    https://www.opensecrets.org/politicians/contrib.php?cycle=2016&type=I&cid=N00007017&newMem=N&recs=20

    2014 (Google / Alphabet #1 Donor)

    https://www.opensecrets.org/politicians/contrib.php?cycle=2014&type=I&cid=N00007017&newMem=N&recs=20

  8. The Time Is Now To Act June 28, 2017 3:43 pm

    The timing is good here re Issa. He survived the last election but barely. More data is out on him and the next go round will find his campaign facing massive headwinds.

    As EG @ 4 states, it is not just pro patent voices that oppose him. He is running the same card game across sectors.

    His words only tighten the noose. As more in government come to the other side of the aisle to protect American IP rights, the light will shine even brighter on the volume of turncoat coin in his purse.

    Paul does America a great service by standing stronger a taking the ‘boney finger’. Thank you, Paul.

  9. CW5 June 28, 2017 3:44 pm

    So-called patent “reform” is a huge ATM for lawmakers in DC, and has been for years. Both Republicans and Democrats have sold out to the serial infringers. It’s going to take a lot of work to turn the situation around.

  10. EG June 28, 2017 4:10 pm

    Hey Paul,

    Just call me a “skeptical” registered Republican. I’ve voted for Democrats (rarely) and Independents (even more rarely)-that’s because I’m not a “one issue” voter.

  11. Edward Heller June 28, 2017 5:19 pm

    We learn that IPRs are OK because reexams are OK?

    That is a strong argument against us that needs to be rebutted by clear and powerful arguments.

    1. McCormick Harvest already held reexaminations unconstitutional. The Federal Circuit simply refuses to follow that case.

    2. Both reexams and IPRs undermine the property nature of a patent. If the patent can be constantly hauled back into the PTO for its entire term plus 6 years by anybody, without standing, it lacks the most fundamental aspect of quiet title.

    Remedy for bad patents: Money? If the PTO is issuing bad patent due to inadequate examination, perhaps Congress shares part of the blame by starving the PTO of funds?

  12. Night Writer June 28, 2017 7:04 pm

    Google Inc $47,145

    Google gives to this man. We ain’t going win my friends with money to buy off these wh***s.

  13. Ternary June 28, 2017 10:15 pm

    As an independent inventor I am curious what our elected officials have in store for us on patent law. Well, under the leadership of Rep Issa I will not hold my breath.

    Thanks to Paul in this article we are able to learn more about what the House or at least the sub-committee is up to on patent law.

    First of all, of the 4 witnesses with written and presented testimony, only Prof. Adam Mossof appeared to be concerned about the state of our patent system, its position in the world and its effect on independent inventors and innovation. I though he fought very well for independent inventors and was the only one who expressed concern of the negative effects of the current trends in our patent system.

    He attracted the ire of Issa (and of witness patent attorney John Thorne, who came across as a glib self-interested attorney covering for his big company clients). One fairly hilarious moment was when Issa grandstands and shows the USA’s first issued patent and basically invites the witnesses to testify that the Alice 101 decision has no effect on innovation (see at about 1H:50M into the hearing) . Three of the 4 witnesses said without blinking an eye that the patent system was great for innovation implying that Alice has no effect. The only exception was (of course again) Adam Mossoff, who told Issa to his face that the invention of the first patent under the current rule would likely not be patent eligible. He also told Issa that Edison would under current rules be considered a troll. Really funny.

    Actually, Mossoff continually and clearly gets under Issa’s skin, which is a pleasure to watch as Issa has no rational response to Adam Mossoff. Great job Professor Mossoff. You appear to be the only one who dares to make the connection between actual inventions, innovation and the current state of the patent system. The rest appears to be to speak on behalf of their own interest of which Steven Anderson of Culver is the only one who explains why he testifies his way.

    Another great moment is when Rep Johnson of Georgia seems to be on to John Thorne who equivocates about his real interest. (see at about 1H; 16 min into the hearing)

    At a certain stage Rep Issa appears to talk with almost physical distaste about the “little guy.” No doubt about this guy’s interest. Great article Paul. Very informative hearing. If you have any illusions about coming change in the patent system, watch this hearing. And contact your Rep and Senator about the need to change the law on 101 (Alice).

  14. Paul Morinville June 29, 2017 2:13 am

    Ternary @14. Another year and they still have not heard from an inventor. The majority gets 3 witnesses and the minority gets one. There will never be an inventor testifying as long as Issa and Goodlatte control the slate of witnesses. It’s bad for business.

  15. Night Writer June 29, 2017 5:37 am

    @15 Paul Morinville: There will never be an inventor testifying as long as Issa and Goodlatte control the slate of witnesses.

    Correction. As long as Google controls Issa and Goodlatte. Both love Google Bucks.

    People are making a mistake in thinking there is any real debate. These are Google sock puppets running a theater in Congress. That hearing just brought them in 10’s of thousands of dollars in new campaign contributions.

    We have no chance without a PAC that can match Google’s campaign contributions and other spending.

  16. Sam Alessi July 4, 2017 9:51 pm

    deliberately undermining America … shouldn’t there be a place for someone like this …. like in prison

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