Posts Tagged: "Patent Reform"

Universities are dependent upon the U.S. patent system and the capacity of that system to protect the legitimate intellectual property rights of individual university inventors and large companies alike. This system drives U.S. innovation and our economic competitiveness in the world. Patents provide universities with the means to ensure that many discoveries resulting from research are transferred to the private sector where those discoveries can be turned into innovative products and processes that power our economy, create jobs, and improve quality of life.

Large companies can steal your patented technology, make a great deal of money, ignore you all together, and then have the resources, the vast resources in most cases, to delay your enforcement actions or actually destroy your patents by any means necessary. So the only recourse left for me and others like me is to bring suite to protect my invention – my intellectual property rights. However, the loser pay clause in HR 9 would be a showstopper for me. Bringing a suit against a patent infringer would be too much of a risk for me and my family now and I’ve already used my life savings and family inheritance and hard work for over 15 years plus the untold impact on my family just to develop and maintain my patents. I just do not believe the independent inventor is the problem.

There is no credible evidence behind proposals to make the drastic changes embodied in the Innovation Act, the removal of discretion from judges to judge each case on an individual basis with mandatory stays and fee shifting, and new rules for pleading and discovery that would undermine the ability of legitimate inventors and patent holders from enforcing their rights against infringers.

Earlier today 40 economists and law professors wrote to Senate and House Judiciary leaders explaining that the data it that keeps being cited to justify HR 9, otherwise known as the Innovation Act, is “flawed, unreliable and incomplete.” The professors caution Congress to proceed cautiously, particularly given the numerous misleading and flawed studies that “highly exaggerated claims regarding patent trolls.”

”[L]itigation abuse is driving so many of the issues and so much of the negative sentiment around patents generally. Certainly it’s important to ensure that quality patents are issued, with quality examinations, and quality patents are filed from a disclosure standpoint. The problem is largely addressed with the patent owners and how they’re asserting and using and abusing their rights versus how those rights may or may not come out of the Patent Office.”

An effort to address bad actors may unnecessarily create significant hurdles for innovators seeking to enforce or license the rights to their own innovations. The fear of unintended consequences requires targeted reform that will specifically address only the abusive behaviors relied upon by the bad actors, namely misleading and fraudulent demand letters. The trick will be to tackle these abusive behaviors that serve no legitimate purpose while not making legitimate business communications impossible. Luckily, it is not difficult to spot fraudulent demand letters and distinguish them from legitimate business inquiries. But will Congress be able to strike the appropriate legislative solution?

The company that just forcefully promised to fight the troll at all costs now can’t write the check fast enough. The case settles, the corporation feels vindicated because they didn’t have to pay their high priced attorneys for more than a couple hours, and they have mitigated the risk. This story is repeated constantly, but one thing never changes. Because the case was settled there is no prevailing party. Therefore, there will never be an award of attorneys fees against the nefarious actors that are rightly called patent trolls.

The STRONG Patents Act appears to be overwhelmingly favorable to innovators and patent owners. This legislation stands in stark contrast with the Innovation Act submitted in the House by Congressman Bob Goodlatte (D-Va) and shows a very different, alternative vision for the patent system.

Notice letters play an important role in the patent system. Indeed, as the Supreme Court has explained, ”[p]atents would be of little value if infringers of them could not be notified of the consequences of infringement.” Virtue v. Creamery Package Mfg., Co., 227 U.S. 8, 37-38 (1913). Patent law encourages patent holders to take reasonable steps to notify others of existing or pending patent rights and their possible infringement. In some instances, federal patent law requires patent holders to send notice letters to accused infringers to preserve their patent enforcement rights and ability to collect damages. Notice letters and licensing communications can also serve the interests of accused infringers. Once a patent holder has made its rights known, the accused infringer can determine whether to cease the allegedly infringing activities, negotiate a license, or decide to continue its activities based on an assessment of non-infringement or invalidity.

”We have corporate interests masquerading the drastic overhaul of the patent system as mere tort reform… It makes no sense to undermine long-standing property rights to address a supposed litigation explosion that doesn’t exist with a supposed tort solution that doesn’t apply.”

The legal costs of the IP system should be measured against the value of intellectual capital in the U.S. economy, estimated in a study by Kevin Hassett and Robert Shapiro to equal between $8.1 trillion to $9.2 trillion… Weakening the US patent system harms economic prospects for middle income earners because it will stifle innovation, discourage patenting, reduce private investments in new technologies protected by patents, slow economic growth, increase unemployment, and harm consumers. The proposed reforms will reduce prospects for economic advancement for middle income earners because they damage entrepreneurship and small business and favor large incumbent firms over inventors and innovators.

Once upon a time Comarco manufactured products, but the company was pushed from the industry by cheaper infringing products. That makes the Comarco story a prime example of the often overlooked reality facing small businesses in a global marketplace increasingly dominated by giant conglomerates. It would seem that the Comarco story is one about how large companies push original innovators out of the marketplace as the result of widespread infringement.

It should be self-evident that not all patent owners are patent trolls, and when you acquire rights it is not an economic cost, yet these absurd propositions are at the foundation of the Bessen/Meurer “study” relied upon by Chambers and Ullman. Shame on anyone who uses the thoroughly discredited, agenda driven, biased conclusions of Bessen and Meurer. Shame on Congress if they are swayed by such snake oil and shiny objects. The Bessen/Meurer conclusions, seriously flawed as they are, shouldn’t be used to destroy the patent system and tilt patent laws toward infringers and away from innovators.

While there has been much written in the past months on efforts to change the U.S. patent system, there has been little focus on the vital role that the current patent system plays in supporting universities in conducting basic research and development (R&D). This university-driven R&D is a critical force in driving innovation, inventions and often startups that create jobs and promote American competitiveness.

Congressman Darrell Issa (R-CA), a member of the House Judiciary Committee and the Chair of the Subcommittee on Courts, Intellectual Property, and the Internet, struck a defiant tone this morning speaking at the National Press Club. Issa explained in no uncertain terms that the patent litigation reforms contained within the Innovation Act will not be watered down, period. He told the audience that never again will a defendant first learn of the allegations against them only at the end of the case.