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.
There is a new entry into the patent reform debate. The Main Street Patent Coalition is a national coalition of organizations that says they are dedicated to stopping patent abuse by so-called patent trolls. The Main Street Patent Coalition is encouraging Congress to pass what they call “common sense patent reform legislation.”
The Main Street Patent Coalition members include: the National Restaurant Association, the National Retail Federation, the American Hotel and Lodging Association, the National Grocers Association, the International Franchiser Association, the Application Developers Alliance, the National Association of Realtors, the Retail Industry Leaders Association, the National Council of Chain Restaurants, the American Association of Advertising Agencies and the American Gaming Association. These trade associations say they want Congress to give small businesses a fighting chance against the growing threat of patent trolls.
The Main Street Patent Coalition claims they represent the small business community at large, which has to make you wonder. On their homepage they talk about an innovative, family owned and privately held company named White Castle. According to the LA Time, White Castle has 9,600 employees. How exactly is that a small business? Answer: White Castle is not a small business, at least if you concern yourself with the way the Small Business Administration defines small business. To be a “small business” you have to have no more than 500 employees. Clearly the Main Street Patent Coalition recent press release Small Main Street Businesses Launch Patent Reform Coalitioncarries a misleading, if not false, title.
Phil Johnson (left) and Judge Michel (right) will be on the panel at this Sedona Conference. Shown here at the 2013 IPO Inventor of the Year ceremony.
Next Wednesday, The Sedona Conference will present a webinar that will take a look at an important, topical issue facing innovators – is legislative patent litigation reform necessary or can the Courts handle what some observe are abusive litigation tactics. On January 22, 2014, Patent Litigation Best Practices: A Matter for Congress or for Bench and Bar? will address the issue with an all-star faculty of leading practitioners in the field. The faculty includes former Federal Circuit Chief Judge Paul R. Michel, as well as current Federal Circuit Judge Kathleen O’Malley. Tina Chappell of Intel Corporation, Philip S. Johnson of Johnson & Johnson, and Alexander Rogers of Qualcomm will also offer their perspectives and insights as faculty members.
Patents and patent reform has been in the news, even the popular press, on an increasing basis. The issue of patents generally and patent litigation specifically has been the subject of intense debate over the last 8 years. Congress passed the America Invents Act (AIA) in 2011, with the bill being signed into law by President Obama on September 16, 2011. The overhaul of U.S. patent law was extraordinary, but not all of the parties involved were happy. Some thought the law went too far in some ways, others thought the law did not go far enough. Despite the AIA being the most significant change to patent laws since at least 1952, Congress is considering further reforms again, with the House of Representatives already passing the Innovation Act (HR 3309). Companion legislation in the Senate is likely to move forward during Q1 2014.
2013 turned out to be a very big year for IP, and especially patents, and the year took a course that few would have predicted this time last year. At that time, the senior team at the PTO was primarily focused on the imminent departure of our then-boss, David Kappos, and the end of what had clearly been an extraordinarily active and successful tenure. The AIA had been almost entirely implemented, the new Patent Trial and Appeal Board was up and running, and most of us expected 2013 to be focused on implementation and execution of the AIA and the other initiatives that had been set in motion under Director Kappos.
But things turned out rather differently. Nobody would have predicted a year ago that President Obama would personally call for additional patent reform legislation to curb patent troll litigation. Or that a comprehensive patent litigation reform bill would speed through the House by a lopsided margin and be heading to Senate consideration with a full head of steam. Nobody also would have predicted that the USPTO would also fall victim to sequestration and once again be denied full access to its fees so shortly after the passage of the AIA, which held forth the promise of full access to fees. And few would have predicted that the PTO would be without stable political leadership since Dave Kappos left eleven months ago. Or that a new Chief of Staff and a new Deputy and Acting Director would be named before a new Director was nominated. This unusual and lengthy transition period has caused understandable concern in the IP community, but we should all be pleased that a new Acting Director has been named and will take the reins on an acting basis in just two weeks.
James Madison, father of the Constitution and proponent of strong patent rights.
As the end of 2013 approaches and I look back on what has transpired I am saddened to see that through the year patent rights have continued to erode. It is difficult to comprehend just how far the pendulum has swung. At one time strong patent rights were viewed by our Founding Fathers as obviously necessary. Now any patent rights are ridiculed as a relic of the past that simply stands in the way of innovation. The reality, however, is that patents don’t stand in the way of innovation; patents foster innovation. But so many won’t even take the time to inform themselves. Rather they equate “innovation” with a new consumer product. But to innovate is to do something new. Innovation has nothing in and of itself to do with a new products or services.
What those urging a weaker patent system want is the ability to release products and establish services regardless of whether they are infringing others. But those who infringe are not innovators, at least not in the most broad sense. Sure, they may have improved something, but if they are infringing then what they have done is copy an innovator. How and why that isn’t self-evident is a mystery. Copying is not innovating!
And if patents were getting in the way of innovation then why aren’t we seeing a standstill in the smartphone industry? The arguments made by the anti-patent crowd are ridiculous on their face, yet decision makers just nod their head in agreement as if they speak the gospel. The truth is the smartphone industry started with the iPhone in late 2007. It is just 6 years old! The phones from 2007 look and function nothing like the smartphones do today, and every new version has new improvements, better battery life, stronger structural integrity, glass that is harder to break, operates faster, has better cameras, etc. etc. For an area that is allegedly being suffocated by patents there sure is a lot of readily apparent improvement.
When it comes to the history of software patents it seems that everyone believes they are an expert. Unfortunately, few in the popular press actually take the time to get the story correct. In fact, there is a popular misconception in media that the Federal Circuit was the court that first authorized software patents. I have dealt with this nonsense in the past, and now have to deal with it once again. None other than the Wall Street Journal has published an article on the topic that is simply fiction.
The clearly erroneous Wall Street Journal article in question was published on December 15, 2013, under the title Jimmy Carter’s Costly Patent Mistake. The article, written by Gordon Crovitz, seems to take the position that patents stifle innovation, although Crovitz thesis is not explicitly stated. It would be erroneous enough to state that patents stifle innovation when all of the evidence is to the contrary, but that isn’t the major Crovitz sin in this article, although it is a whopper of a lie often told by patent critics.
Before proceeding, allow me to state what should otherwise be obvious: if patents stifle innovation you would expect run-away innovation in places where there is no patent system, but that isn’t what you see. You see extraordinary poverty, no economy and zero innovation where there are not patent rights. Likewise, you see economies established, domestic innovation and innovation from overseas flowing into countries that adopt strong patent rights. Furthermore, the entire point of a patent system is to grant exclusive rights that force creative, inventive and entrepreneurial individuals who are blocked to design around, which is exactly what happens. Designing around patents leads to enormous leaps in innovation. See Forfeiting Our Future Over Irrational Fear of Software Patents. And for those who don’t get it and erroneously state that we are seeing historic levels of patent litigation, read your history. There were close to 600 patent litigations associated with the invention of the telephone, and smart phone litigation has been but a small fraction of that number. Furthermore, the smartphone as we know it came out in 2007. In the past six years have the over abundance of patents stopped smartphone innovation? Hardly, and everyone who is at all honest knows that to be 100% true. So why the pretending about patents stopping innovation? Obviously there is real patent hatred and critics, like Crovitz, simply ignore facts and prefer their own brand of fantasy over truth.
As ridiculous as it is to suggest that patents stifle innovation, this ill-defined Crovitz thesis isn’t the major issue with the fiction published by the Wall Street Journal. There is objective and verifiable error in his article that even those with an agenda will have to admit.
In the American legal system, the popular notion is that the courts should be equitable and fair to all parties, both plaintiffs and defendants, regardless of the issue at stake. This is reflected in our system’s handling of lawsuit legal fees, which typically keeps the costs of engaging in litigation with the party who contracted those costs during the legal process. Only in the most special of circumstances does the losing litigant have to pay the attorneys fees of the prevailing party in the United States. This has long been believed to be the best way to make sure that even those of modest means have meaningful access to seek redress in Court for wrongs suffered.
The American concept that each party should ordinarily pay for legal representation regardless of whether they win or lose has developed in sharp and direct contrast to legal fee rules in other countries. The two contrasting regimes are named for the two countries that most clearly represent these differing views: the United States and England. In recent days, the United States Congress, urged on by certain high-tech corporations, has considered legislation that would create new rules regarding fee shifting for patent lawsuits as a way to discourage so-called “patent trolls” from engaging in litigation. Unfortunately, the legislative proposals currently being considered are not at all narrowly tailored to address the patent troll problem, even assuming there is a patent troll problem, which the objectively available data calls into question in the first place.
Certainly, there is abusive litigation that occurs in the patent world. This abusive litigation does not, however, signal a problem with the patent system. Rather, the abusive litigation tactics leverage judicial inefficiencies to force litigants into paying exceptionally paltry sums rather than pay to fight a patent litigation that on average could cost $2 million to see through to the end. Those sending demand letters for $500 or $1,000 to small entities should be stopped. Those that sue large entities without care of whether there is infringement and settle for $25,000 or $35,000 should be stopped.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more.
Without hesitation I recommend One Simple Idea and think it should be required reading for any motivated inventor. There is so much to like about the book and so much that I think author Stephen Key nails dead on accurate. The book is educational, information and inspirational. For the $14 cover price it is essential reading.
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