Why Patent Reform Didn’t Happen in 2008

It seems hardly possible that we are about to enter 2009 without any meaningful patent reforms having been enacted by Congress or successfully advanced by the United States Patent & Trademark Office during calendar year 2008.  Many are scratching their heads and wondering how this could have happened, but not me.  If you stop and actually look at what has been going on in the patent industry there is no great mystery why the US continues to live with a broken patent system and there is little, if any, real hope that things will change during 2009.  Whether the tech giants that make up the so-called and horribly mis-named Coalition for Patent Fairness want to admit it or not, they are the problem and the reason that there is no hope for patent reform.

In reality, the Coalition for Patent Fairness ought to be called the Coalition for Patent Infringement, because their single minded pursuit is to weaken US patents and insulate themselves from ongoing patent infringement.  Luckily there are many industries and interest groups that were able to stop this self-destructive agenda in 2008.  Unfortunately, the sad reality is that until such time as the tech giants, such as Google, Microsoft, Cisco Systems, Apple, Oracle, Intel and the many others who make up the Coalition for Patent Fairness get serious about making a positive change and actually implement a winning strategy there will be no hope and the US patent system will continue to slip toward irrelevance.

The tech giants in the Coalition for Patent Fairness are joined by a strange assortment of others, most notably prominent banks such as Bank of America, Wells Fargo, Wachovia, HSBC North America, Capital One and others.  The reason for what appears to be a strange assortment of collaborators is the fact that tech giants like Google, Microsoft, Cisco, Apple and others are facing what they characterize as a huge patent troll problem, and this so-called patent troll problem comes disproportionately from business method patents and software patents.  So it is easy to see why the banks and tech giants have formed an alliance to go after these types of patents that impact technology, communication and software.  The Coalition for Patent Fairness is waging an all out assault on those that invent in the high-tech areas that will define the future of the US economy.  At this point in history it should hardly have to be said that we ought to seriously question whether any reform banks want is something that ought to be implemented, and the fact that these banks are in bed with tech giants that want to insulate themselves from infringing patents ought to make us all the more suspicious.

The Coalition for Patent Fairness home page has a series of factoids in the bottom right corner.  If you refresh the screen you will see several different factoids pop up, all with the objective of scaring those who read the information into believing that there is a patent troll problem and the technology and bank members of the Coalition are the victims and they are almost helpless to do anything.  First, they are not helpless, they just choose to pursue bad strategies that are calculated to encourage patent troll lawsuits.  Second, they are not victims at all.  Take a look at this factoid, which I found on the CPF home page today:

Prior to 1990 there was only one patent damage award in history larger than $100 million; over the next ten years there were 13 judgments and settlements in that category, and in the next six years there were 21, including one award for $1.35 billion – the increasing number of huge cases is readily apparent.

Right above this factoid in text that appears to remain static and available all the time it reads:

Over-broad patent grants stifle future innovators, while unjustified lawsuits that aim to extort settlements without regard to the merits of underlying patents clog the courts. Enactment of targeted patent reforms is necessary to ensure the future competitiveness of America.

Now can someone explain to me how these two statements are at all logically consistent?  Of course no one can explain how they are logically consistent because they are not.  There is simply no way that anyone can be both intellectually honest and believe these thoughts at the same time.  So the Coalition laments the fact that there are more and more huge patent verdicts and settlements while simultaneously saying that the lawsuits are unjustified and akin to extortion?  Are they missing the point that severely or are they trying to be manipulative?

Under the rationale of the Coalition for Patent Fairness the courts must be in on the scam and perhaps even on the take because that would be the only way that dubious patents could result in huge awards, right?  So the judges and the juries are being bought off in mafia style.  But wait, that doesn’t explain the huge settlements that are being paid, does it?  So not only are the judges and juries in a conspiracy with patent trolls, but those who are deciding to settle are a part of the conspiracy as well because it would be unthinkable that in these economic times with shareholder value eroding like an ice cube in the Florida sun, those who have a fiduciary duty to maximize value and run these publicly traded companies, would knowingly give in to extortion tactics that only encourage patent trolls to file more lawsuits.

You see, what the Coalition for Patent Fairness really wants is to be able to infringe whatever patents they want, whenever they want, without having to pay the patent owner.  Worse yet, they are actually pushing this agenda in Congress and at the Patent Office.  Conservatives can talk all they like about whether President Bush and President-elect Obama have and/or will pursue socialistic reforms by nationalizing industry, but it is hard to imagine a more socialistic approach than what the Coalition for Patent Fairness seeks, which is the right to ignore patent rights granted to inventors at their sole discretion.

What these tech giants and banks failed to consider was that the patent reform they were paying their lobbyists to push on Capital Hill and the reforms they were urging the Patent Office to implement would only benefit themselves.  It is one thing when reforms by those connected industries will benefit themselves and harm small business, independent inventors and entrepreneurs, but quite another thing when they will hurt not only start-ups but established mega-giant industries like manufacturing and pharma.  You see, the reason we are about to enter 2009 without any reforms or hope is because the tech giants and banks wanted a patent system that let them do what they wanted and which would cripple everyone else.  You simply cannot expect this type of lobbying strategy to work.  Persuasion 101 mandates that to get what you want you need to be reasonable enough so that the giver can actually give you what you ask for.  Thankfully GlaxoSmithKline stood up to the Patent Office, along with independent inventor Dr. Tafas.  Thankfully Cargill and the independent inventor lobby got to enough in Congress to stop the legislative madness.

The solutions to the US patent problems are so clear, and if there is a patent troll problem it could easily be addressed with a simple, inexpensive strategy that doesn’t interest the Coalition for Patent Fairness members.  Rather, they complain about the problem and seek to gut the patent system as the solution.  This is nothing more than greed getting in the way of creating strategies aimed to succeed.

About the Author

Eugene R. Quinn, Jr.
President & Founder of IPWatchdog, Inc.
US Patent Attorney (Reg. No. 44,294)

B.S. in Electrical Engineering, Rutgers University
J.D., Franklin Pierce Law Center
L.L.M. in Intellectual Property, Franklin Pierce Law CenterSend me an e-mail

View Gene Quinn's profile on LinkedIn

Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide


Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

No comments yet.