Inventors Should Have Same Chance to Succeed as Reps. Issa and Massie
This month, Congress is moving forward on significant legislation to revise the patent system, and President Obama has said that he will sign into law any legislation that reaches his desk. Last week, the Senate Judiciary Committee voted on S. 1137 (the PATENT Act), and this Thursday, the House Judiciary Committee is planning to vote on H.R. 9 (the Innovation Act).
In the ongoing debate over H.R. 9, two Congresspersons have been prominent voices speaking out about it – Representatives Darrell Issa (R-CA) and Thomas Massie (R-KY). Both Reps. Issa and Massie are inventors with many patents to their names. Both of them have very different views of this patent legislation.
Rep. Issa is a prominent supporter of the patent legislation, which would drastically curtail the ability of inventors to defend their patents. Rep. Massie opposes it.
Although H.R. 9 is ostensibly aimed at nuisance lawsuits brought by some patent owners, it places unprecedented and extremely costly burdens on all innovators who are forced to sue to protect their property rights. Rep. Massie explains that “the bill attempts to ‘fix’ a few isolated abuses of the patent system, but instead it sets forth a comprehensive overhaul of the existing legal framework that compromises the rights of all legitimate inventors.”
By contrast, Rep. Issa contends that raising obstacles to enforcing patents won’t harm inventors. When the patent legislation was officially announced, Rep. Issa declared that it was necessary because it would stop “patent trolls who exploit loopholes in our patent system, bullying inventors and small businesses with frivolous lawsuits to the tune of $29 billion each year.”
Which congressional inventor has the more convincing argument?
The $29 billion figure cited by Rep. Issa has been exposed repeatedly as misleading and invalid and was criticized in a recent letter to Congress by forty economists and law professors. But more important, Rep. Issa’s past experiences as an inventor and entrepreneur enforcing his patents against infringers teach important lessons about the impact that the patent legislation would have on future inventors and startup companies.
Many years ago before he was elected to Congress, Rep. Issa, like many entrepreneurs, built a new business with his spouse that depended on his patented innovation. And his company had to go to court to protect those patents. Court records show that while Issa was still the controlling shareholder of his company, Directed Electronics, it had to do what many innovative startup companies are forced to do: it filed well over a dozen lawsuits to hold many infringers accountable for pirating his patented innovation.
Rep. Massie’s words are thus backed up by Rep. Issa’s experiences in America’s innovation economy: Inventors and startups need to be able to go to court to defend their patent rights.
The need for Rep. Issa’s company to enforce its rights reminds us that inventors and small businesses often have to protect their patents through litigation. But the patent legislation supported by Rep. Issa will make it much harder for all patent owners to protect their rights, imposing extensive financial and procedural burdens that go far beyond what is necessary (or helpful) to curb abusive litigation practices. Whereas true patent reform should be a scalpel, this patent legislation is a sledgehammer. All legitimate inventors and startup companies, like Reps. Issa and Massie, are treated as acceptable collateral damage in the effort to eliminate the handful of bad actors who file nuisance lawsuits.
Moreover, this legislation has become less justified in the past year. In the last year, the number of patent lawsuits has collapsed, probably in response to the Supreme Court issuing a slew of opinions in the past couple years that have tightened up standards for obtaining and litigating patents, as well as loosening the standards for awarding attorneys’ fees and costs to anyone defending themselves against a frivolous patent lawsuit.
In fact, one of last year’s important decisions by the Supreme Court, Alice v. CLS Bank, has thrown the high-tech industry into disarray as wide swaths of tech patents very similar to the patents Rep. Issa received two decades ago are now being invalidated almost daily as unpatentable “abstract ideas.”
All of this reinforces the points repeatedly made by individual inventors, universities, venture capitalists, and many other stakeholders in the innovation economy: Congress should back off from overbroad legislation that harms inventors and companies who rely on strong patents. It should instead proceed cautiously and narrowly.
Rep. Issa’s successes as an inventor and entrepreneur are commendable, and his company’s many lawsuits to defend his patented innovation against infringers free-riding on his inventive labors are just as commendable. Notwithstanding the anti-patent rhetoric sweeping Washington these days, the next great innovators deserve the same chance to succeed and protect their innovation that both Reps. Issa and Massie enjoyed in their day.