Politics

Patent Bill Should Die

The so-called Patent Reform Act is fundamentally flawed. It combines many bad provisions. Some of the worst parts of the bill include a new, administrative route to challenge patents after they are granted, the ability to infringe a patent without having to pay back what the patented product is truly worth, giving a patent to the first party to file an application rather than the traditional first-to-invent standard, and forcing publication of patent applications at 18 months.

A group of the largest high-tech firms is pushing this legislation, which certain lawmakers are all too eager to accommodate. In short, though, S. 1145 and H.R. 1908 would destroy what the Founding Fathers put into the Constitution with the specific intent of stimulating invention.

The bills purport to “harmonize” (in fact, dumb down) our patent system with the model predominant in Europe and Asia. Proponents claim their bills fix problems like low patent quality. But it ain’t so.

The so-called Patent Reform Act is fundamentally flawed. Some of its worst parts include new post-grant challenges, the ability to infringe for cheaper, “first-to-file” and forced publication at 18 months.

Under the bills, a patent’s validity could be challenged throughout a patent’s life. These appeals would be brought in a lower-cost, administrative forum instead of a real court. It’s easier for competitors to antagonize patent holders for years. And the competitors could do it more often because such challenges would be cheaper.

Also, what’s touted as “proportional liability” is actually rewarding infringers with less liability exposure for unlicensed usage of patented elements. It would be tougher to prove “willful” infringement and thereby win punitive damages. Instead, IP pirates would only have to pay back a small portion of the patented element’s value.

The legislation adopts the foreign first-to-file-a-patent-application standard. Currently, America awards patents to the “first to invent.” Big companies with armies of lawyers can afford to get their patent applications in before the little guy toiling away in his garage who actually first invents something. It also kills off provisional patent protection, which costs less and is of prime benefit to independent inventors.

The forced publication measure will require all inventors to disclose all their invention’s details after 18 months. It takes the Patent and Trademark Office about 33 months to issue a patent. So, for a year and a half an inventor would face hordes of Chinese, Indian and other thieves who’ll steal his invention and gain a commercial edge. The American inventor wouldn’t have any legal rights to protect his creation.

Is this what the Founders had in mind? Hardly. Article I, Section 8 of the Constitution empowers Congress “[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

Why did men of competitive private enterprise choose to grant people an outright, legally protected monopoly? As they explained in Federalist 43, “The utility of this power will scarcely be questioned. . . .  The right to useful inventions seems with equal reason to belong to the inventors.”

They noted the rights of copyright under British common law and that it wouldn’t work for each state to try to create its own laws governing intellectual property within the common nation.

“The public good fully coincides in both cases with the claims of individuals.” That is, the success of America’s private enterprise, market competition and international competitiveness, from which all Americans benefit, hinges on rewarding creative people with strong intellectual property rights.

This model has proven itself extraordinarily successful. It’s no coincidence that America became the world’s strongest economic engine because of its patent and copyright laws.  It’s why inventors like Thomas Edison, Alexander Graham Bell and George Washington Carver sit among the panoply of American heroes.

The facts, cited by U.S. Business and Industry Council, tell what the patent bills risk. U.S. manufacturers perform two-thirds of the R&D. They own six out of ten patents and, increasingly, corporate intellectual property is a firm’s greatest asset. Small inventors, independent firms, research universities and nonprofits file a third of the patent applications.

At heart, the legislation advantages a single sector and disadvantages all other sectors.  High-tech, which uses many patented elements and so has to secure licenses from the various patent holders, wins. Notably, Big Tech contributes lots of its political money to Democrats.

Who loses? The productive sectors. They range from independent inventors to small businesses to universities to venture capitalists to large and small manufacturers of every sort to nonprofit research entities.

So, we’re pressed to scrap our highly successful patent model for an inferior one, unilaterally disarm in the highly competitive global market and disadvantage the most creative sectors of our economy.

We’re to rob America’s inventors. We’re to remove the economic incentive that entices them to invest time and treasure in turning an idea into an item. 

We’re to gut the very thing that’s made the rewards worth someone’s risks — and that produces the miracle medicines, the labor-saving devices, the safety and security improvements that benefit all Americans.

If it really wanted to be constructive, Congress would allow the Patent and Trademark Office to retain application fees. That would enable the PTO to review more applications more quickly. It would also improve patent quality.

A Congress willing to sell the birthright of America’s real innovative sectors for the porridge of “harmonization” and tech execs’ campaign contributions is a disgrace.

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