Green Tech Companies Protest Patent Reform Legislation

In a new, interesting and exciting twist, green technology companies are joining the debate about whether Congress should enact sweeping changes to the US patent laws and are concluding that the Patent Reform Legislation submitted in both the US House and Senate is flawed and should not be enacted.  This is a potentially monumental event in the patent reform saga and provide the pharmaceutical industry, biotech industry, US manufacturers and independent inventors with a powerful new partner in the debate over the future of the US patent system.  This continues to frame the debate such that Silicon Valley is on one side of the debate and desperately wants apportionment of patent damages, and pretty much the remainder of all other technology companies and inventors do not want apportionment of patent damages.  With green technology being the political poster child for the way forward in the US economy, both from a jobs standpoint and from a standpoint of protecting the environment, this green technology lobby could easily tip the scales in favor of those opposed to this ill-conceived patent reform, which would be a good thing indeed.

This afternoon a group of green tech companies sent letters to Senator Patrick Leahy (D-VT), Senator Arlen Specter (R-PA), Representative John Conyers (D-MI) and Representative Lamar Smith(R-TX) detailing concerns that adopting apportionment of damages could reduce capital for investment, stifle innovation and slow down green-job growth.  The letter was coordinated by representatives from a variety of industries, a group informally referred to as the “Cross Coalition.”   This is the first time that green tech companies have joined the patent debate.  This approach to tie the future of green technology to a strong patent system that does not reward the infringer and instead rewards innovation could well be a turning point in the debate.

What follows is the text of the letter, which was also copied to Speaker of the House Nancy Pelosi (D-CA) and House Minority Leader John Boehner (R-OH).

We write today regarding the importance of the United States patent system to our transition to a clean energy economy. Our companies and those we represent are committed to nurturing the innovation pipeline and subsequent domestic manufacturing capacity that will build the next generation of energy efficient, renewable energy, and renewable fuel technologies, creating thousands of American jobs in the process. However, we are concerned with recent legislative proposals to make fundamental changes to the US patent system that we believe would weaken, rather than strengthen, patent protection, putting this innovation pipeline and subsequent American manufacturing capacity at risk.

The patent reform legislation that has been introduced would reduce penalties for patent infringement by changing the law of damages. This change would elevate the importance of one of the factors now considered in calculating patent damages. By giving this one factor – apportionment – a preeminent position in damage calculations, proponents of the legislation would have achieved the goal of reducing damage awards. This type of reduction in the value of intellectual property rights could adversely affect the future of our industries in the United States in two ways.

First, in order to meet the demands of a low-carbon energy future, the need for innovation in the areas of energy efficiency, energy crops, advanced biofuels, renewable energy, renewable fuels, carbon capture and storage, and environmental technologies is great. Our ability to rapidly  innovate in these sectors is critical to ensuring that we and others will be able to effectively meet our mutual goals of reducing carbon dioxide emissions, thereby reducing the impact of global climate change and reinvigorating the American economy with the creation of green jobs. A significant reduction, or elimination of much of the value of the intellectual property that will be generated through this process will have an effect on the availability of the venture capital required, decreasing the speed at which innovation will occur.

Second, we anticipate that our economy will flourish as innovation in environmental and climate technology sectors drives the creation of green jobs. Our companies and our members create these jobs as we manufacture and market our patented products and technologies to domestic and international customers. If the current patent system is modified, making it less costly to infringe on existing or future patent rights, we anticipate that our competitive advantage in the global marketplace will be reduced, impacting the creation of green jobs.

As proposals are made to change the U.S. patent system, we encourage you to take into account the impact of these proposals on the viability of our burgeoning green economy and its associated green jobs, as well as our ability to attract the capital required to innovate at the necessary pace to effectively combat global climate change. Drastic changes, such as reducing penalties for patent infringement, will only discourage innovation, resulting in reduced investment and lost jobs at a time when the country can least afford it.

We believe the American patent system is the best in the world and we look forward to working with you to ensure that it becomes even stronger. Thereby we can continue to encourage the kind of investment, product creation, and job creation that has been the hallmark of our economy for decades, and will ultimately drive our ability to meet the challenges posed by global climate change. Thank you for considering our views on an issue of fundamental significance to innovation in America.

It is time for all inventors and companies that rely on innovation to take a stand.  The proposed patent reform legislation will only benefit those technology companies who infringe on patent rights of others; those same technology companies that have largely lost the ability to innovate and seek rather to take from others.  Let us not forget that apportionment of damages will make all patents less valuable and make infringement an easy choice for large corporations.  If large corporations do not have to worry about paying potentially large damage awards it is completely predictable that they will simply choose to infringe rather than respect the patent rights of others. 

Legislation that would encourage infringement will hamper innovation and significantly impact the next wave of technologies that could ultimately lead us out of this economic downturn and spawn growth for the next decade.  It is at times like this that we as a nation need to provide meaningful rights to inventors, entrepreneurs and companies engaged in innovating for the future.  While many Americans are losing their jobs such a scenario typically leads to many creative and inventive individuals out of work, who through circumstances beyond their control are now forced to pave their own path to the future.  Recessions are painful and never welcome, but with thoughtful implementation of policy by our leaders a recession can present unique opportunities for the future and lead to the development of entire new industries.  This will not happen if the patent reform legislation is passed and signed into law. 

Calling the pending legislation “patent reform” is really a misnomer.  It would be far better to call it the Silicon Valley Infringers Protection Act of 2009 (SVIPA 09).  This legislation will not benefit pharma, biotech, green technologies, manufacturing or independent inventors.  At a time when economic peril is reported daily Congress must do the right thing and kill SVIPA 09!  In order to help bring about the demise of this terrible piece of legislation everyone interested in innovation needs to play a role.  I am, therefore, issuing a CALL TO ACTION!  Write, telephone and e-mail your representatives and Senators and tell them that patent reform as it is presently proposed must be stopped! 

We do need patent reform, just not this patent reform.  What we need to do is focus attention on the Patent Office and get the Patent Office working again and issuing patents.  We need a philosophical change at the Patent Office, patents must be issued in a timely manner and innovation needs to be encouraged.  Rather than spending precious time on ill-conceived patent reform legislation our elected officials should be trying to figure out how to fix the banking mess and the credit crunch, not spending time doing tremendous damage to US innovation and entrepreneurial spirit.  After the banking and credit matters are addressed then we need our leaders to swiftly come to the aid of the Patent Office to get innovators and small businesses back in the game with meaningful and timely protection for their inventions.

Those courageous green tech companies and organizations that signed the aforementioned letter are:

American Council on Renewable Energy (ACORE) – Washington, DC
Biomass Coordinating Council – Washington, DC
Ocean Renewable Energy Coalition – Darnestown, MD
EESTech Inc. – Chino Valley, AZ
Southwest Windpower – Flagstaff, AZ
Ceres, Inc. – Thousand Oaks, CA
Fallbrook Technologies Inc. – San Diego, CA
Viryd Technologies Inc. – San Diego, CA
Mendel Biotechnology, Inc. – Hayward, CA
IP Checkups, Inc. – Berkeley, CA
Environmental Energy Solutions – West Hartford, CT
GreenWorld, LLC – Arvada, CO
DuPont – Wilmington, DE
EarthLinked Technologies – Lakeland, FL
International Applied Engineering, Inc. – Marietta, GA
Unicoi Energy Services – Marietta, GA
Industrial Resource Group, LLC – Schererville, IN
Konarka Technologies, Inc. – Lowell, MA
Syngenta – Golden Valley, MN
Monsanto – St. Louis, MO
Solutia Inc. – St. Louis, MO
Energy and Environment Research Center (EERC) – Grand Forks, ND
ECR International, Inc. – Utica, NY
ArborGen, LLC – Summerville, SC
PetroTex – Cedar Hill, TX
The Stella Group, Ltd – Arlington, VA
Powered Green LLC – Madison, WI
Terra Moya Aqua, Inc. – Cheyenne, WY

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 Center

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Gene is a US Patent Attorney, Law Professor and the founder of 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


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