Eleven score and eight years ago today, our Founders brought forth an institution designed to promote progress in the fledging nation called America: our patent system. Despite its value to our nation, 228 years later that system is under siege and attack by powerful monopolists intent to protect their interests in the new economy and undermine the Founders’ intent.
In 1790, the U.S. patent laws were first enacted and individuals could obtain a patent under the new federal government. For about a century beforehand, British citizens in the various parts of the American colonies could obtain patents for that region, and Britain and other European countries had patent laws as well. But the new American patent system was different: it was democratized in that anyone could participate, without the need for consent from the Crown.
The origins of patent laws date back to the Fifteenth Century when Florentine regents sought to attract and keep innovators and their inventions. Elizabeth I was a keen ruler in passing various patent laws to encourage foreigners with ideas and inventions to relocate to Britain, as well as encourage domestic innovation. This spirit of governmental entrepreneurship was later inculcated in the culture of the American Colonies, and our Founders were well versed in the purposes and advantages of a patent system. George Washington in his first State of the Union Address stressed the importance of a patent system, in which he spoke of “the expediency of giving effectual encouragement as well to the introduction of new and useful inventions from abroad, as to the exertions of skill and genius in producing them at home.”
To our Founders, the purpose for having a patent system was twofold. First, as with any savvy country, you wish to attract those with ideas and businesses, as noted by President Washington, Alexander Hamilton and others. A patent system provides a short-time reward to do just that, i.e., an exclusivity period now 20 years from filing for the patent, excluding all others from profiting from that particular invention during this time. Thus, an innovator can secure their right to that creation, obtain funding and do whatever is necessary to promote or sell that invention. Second, that exclusivity reward must come to an end, i.e., at 20 years, and when it does, all of that innovation enters the public realm for everyone to use. Our Founders knew that technological progress usually builds on the work of others, and the quicker innovations and the knowledge surrounding them enter the public realm the better. In contrast, business approaches that rely on trade secret protections prevent the dissemination of ideas, thereby hoarding knowledge. Our Founders recognized that patent rights should be very strong, but also short-lived, and thereafter dedicated to the world of knowledge, thereby serving a greater public purpose.
Over the past two centuries, our patent system has been operating faithfully like a sturdy machine powering our nation, making us mighty. That machine has required tweaking on occasion, and has been attacked by some along the way as antiquated. Nonetheless, our nation has prospered nicely over these many years and remains at the forefront of scientific innovation, albeit with many modern challengers. We are the envy of the world for many reasons, including the strength of our patent system. Innovation can flourish here and inventors were thought to thrive in such a competitive environment thanks to our robust patent system. But times have changed, and are changing.
Today, the patent system is under relentless attack. Until recently, technological innovation was a relatively slow process, often requiring many years of product development and testing, and the length of patents and their use were far less controversial. As technology accelerates, however, many now condemn the patent system for stifling innovation and question American innovators, even popular past innovators such as the Wright Brothers, calling them patent trolls. Indeed, the “little guy” is attacked for protecting their property, in this case intellectual property. The Wrights were embroiled in a very competitive struggle to create an airplane. Others, far more financed, failed miserably for years. Suddenly, two upstart bicycle mechanics from Ohio turned the world upside down by demonstrating that heavier-than-air flight was possible. The Wrights protected their ideas with patents, and the also-rans attacked them for stifling airplane technology.
In Congress today, our legislators are barraged by many lobbyists of large, primary tech corporations that, again, insist that the patent system requires reform. Indeed, back in 2011, even the Obama Administration threw its heft into this cause through the Commerce Department, ostensibly on behalf of the very same large tech corporations, to force further significant changes to the patent system. At the behest of these same players, major administrative changes were also made to the patent system that have created much carnage and chaos, i.e., causing the invalidation of many patents under simpler procedures and a relaxed standard of review, a devastating devaluing of patents.
These drastic changes dramatically affect very American industries: software and health care. Unlike the more physical innovations of yesteryear, e.g., the plow, modern inventions are generally more abstract, e.g., the operations of software code and the test paradigms of critical biotechnological innovations. Increasing sophistication of innovation in the new economy is also at play. Unfortunately, through various opinions, the Supreme Court has created uncertainty in these “abstract” areas, and the United States Patent Office, in trying make sense of the various Court opinions, was pressured by the Commerce Department to hastily promulgate new rules and procedures designed to greatly restrict anything deemed too abstract, which is a rather vague and abstract term in itself. Indeed, some trial judges today even dismiss patent cases outright because they consider the invention abstract. We remain in the paroxysms of these changes.
Yet, tech lobbyists and some press continue to condemn the patent system. Why? Even though corporations file many patent applications, they are also sued frequently, particularly tech companies. With the market share and power of some of these companies, they clearly wish to maintain that dominance any way they can, even by nipping new challenging patented innovations in the bud. To some corporations, the abolition of patents is their goal or at least further diminution in the value of patents and undermining the entire patent paradigm and thwarting competition. Indeed, the small inventor, with a few patents, can be attacked easily under the new patent laws, causing a cloud of uncertainty to hover over new companies whose value is based on their ideas, as covered by patents. This has resulted in fewer licensing and other deals involving patents, resulting in strong industrial movements toward trade secret protections employed instead, which is counter to the Founders’ intention to disseminate knowledge.
A chief justification for these radical changes to the U.S. patent system has been to combat patent trolls. But the definition of what is a patent troll is nebulous and over inclusive, e.g., patent trolls include universities, all individuals and small companies with a new idea, and other non-evil players. The term “patent troll” was coined by large corporations to denigrate anyone with the gall to sue them for patent infringement. Even though the data does not support a pandemic of patent trolls out there, the tech lobbyists continue to decry that the patent system is still running amok. As with all litigation, including patent litigation, the parties may play rough in this battle. Abusive behavior, e.g., the inappropriate assertion of a patent, is already governed by statute, but this is not enough for some tech giants, who want to further impede competition by thwarting patenting, strangling the new innovators at the start. This desired monopolistic level control of some of these tech companies, however, will likely result in antitrust measures in due course.
Another doubt introduced of late is entitlement to patenting. Did the Wright Brothers deserve their fame? Patents helped them maintain their relevance in the face of stiff competition. Yet today the Wright Brothers, Edison and other great American innovators are deemed bad actors and somehow undeserving. Our heroes of yesteryear are being dethroned by the press for no apparent reason than to denigrate the patent system itself.
But who are inventors anyway? As Eric Schmidt, CEO of Google, said on 60 Minutes, true innovation does not come from the large corporations. Instead, he said it is some “graduate student” or “crazy person” that makes change, such as the obscure Wright Brothers warping the airplane wings to control flight, something not envisioned by other aeronautical innovators. Similarly, Mark Twain once said that someone “with a new idea is a crank – until the idea succeeds.” Without a viable patent system, these innovators and inventors from all walks of life will be unable to succeed, to profit, violating a central tenet of the patent system. Penalizing these innovative poor students, “crazy” people and cranks by hindering their chance to obtain funding and protect their technological advances in court is not justifiable and is not right. Legislation and administrative rulemaking that creates fundamental changes to the law to thwart innovators (and their backers) getting their say in court is highly suspect and perhaps unconstitutional.
Despite the proven virtues of a patent system to society, there remains the ongoing erosion of the panoply of patent rights for all, and the shift to better protect corporations’ interests over that of the individual, a way of de-democratizing the patent system. We are in a crisis of monumental proportion, particularly at a time with international challenges to our status as world leader in innovation and technology. For example, the Trump Administration has recently levied tariffs and penalties on China for its inappropriate appropriation of America’s intellectual properties. American innovativeness itself is under threat from within and without, and the ongoing compromises to the patent paradigm have left us open to challenge as world leader. Indeed, the ranking of our patent system to other such systems in the world has fallen markedly in the last few years.
The patent community, however, sees some rays of hope in the recent appointment and confirmation of Andrei Iancu as Director of the United States Patent & Trademark Office. This Trump appointment has great potential to cure many of the ill-effects engendered under the Obama Administration, which catered heavily to the needs of the tech corporations, including the diminishment of patents.
Our patent system remains a modern marvel. Despite its age, it has served us well. We should honor it every year and endeavor to live up to the ideals of our Forefathers who created it. As Abraham Lincoln once said, the patent system adds “the Fuel of Interest to the Fires of Genius.” Despite some positive legislative efforts of late by Senator Coons and others to remedy serious problems in the 2011 Patent Act, the tech lobbyists are still afoot and Congress may keep fiddling with the patent engine and deprive it of fuel, perhaps causing our forges of constructive creativity to dwindle or die out.
Both Washington and particularly Lincoln favored strong patent protection. Yet, our patent system has been seriously challenged in recent years by special interests, devoid of any respect for our national treasure. Our Founders crafted our patent laws, placing them in the Constitution as a means to encourage the progress of useful arts and help all mankind. These laudable goals are being belittled by institutions with dirty hands. Yet, hope springs eternal. Expectantly, the Trump Administration will undo some of the damage caused by his predecessors, and fire up the coals of invention, making innovation in America Great Again.