Posts Tagged: "Congress"

you continually hear from Members of Congress, Staffers and those giant companies pushing for weaker patents that the goal of the bill is nothing more than to keep small business owners from getting sued for using pieces of equipment that they purchased. The truth, however, is far different. The small businesses that Congress claims they want to protect are just political pawns in a much larger game of chess. The people funding the effort to enact further patent reform are not small businesses; rather they are Google, Cisco, J.C. Penney, and other giant corporations. The interests important to these giant corporations are driving the push for more reform, not a deep-rooted concern for the plight of American small businesses.

The stark reality of how government operates leaves us with a patent system that will be perpetually on the brink. Giant corporations have become effectively insulated from any consequences associated with stealing patented innovations, yet they continually want more and more help from Congress, which they dress up and roll out as “reform.” Even if they fail this time these companies will return, with more lobbyists and special interest groups demagoguing innovators as inherently evil, Satan practically. Rather than recognize the critical role patents play in the innovation ecosystem and in the U.S. economy, Congress is poised to flush the patent system down the drain because there are a handful of giant tech corporations that believe they would benefit.

By May 22, 2015, Congressman Goodlatte scheduled at least three $1,000 a plate breakfasts for wavering Judiciary Committee Conservatives. Money made at these breakfasts went directly to the Conservative’s campaign coffers. While not directly stated, the timing of the breakfasts suggest they might have been intended to influence their vote on patent reform. The secret to maximizing lobbyist donations is to guarantee the proper bang for the buck. For this reason, Goodlatte, whose rank and power matter to crafting legislation favorable to donors, attended these breakfasts personally, allowing his name to be used in order to ensure a larger turnout.

Innovation is the lifeblood of a prosperous economy. Sound patent policy, which encourages the nexus between risk and ideas (especially for small entrepreneurs), makes invention profitable. The U.S. patent system enables that dream by protecting the market an invention creates long enough for the inventor to gain a toehold against competition, and by creating a property right capable of attracting critical investment to bring the invention to market and grow the business. Don’t let H.R. 9 or S.1137 kill this can do American spirit of innovation.

Leading organizations of the Conservative Movement have stepped up their game informing Congress on the philosophical reasons for opposing the Innovation Act and its Senate companion, the PATENT Act. This increased patent bill opposition is directed at Republican lawmakers, the political majority party in both houses of Congress. With House leadership deciding to postpone H.R. 9’s floor debate until at least September, the expanded conservative opposition seems to be effective.

As patent reform keeps chugging along in Washington, an important briefing was held on Thursday, July 23rd, between members and staff of the U.S. House of Representatives Judiciary Committee and U.S. Patent and Trademark Office Director Michelle Lee. The meeting focused on H.R. 9, the Innovation Act, which recently moved out of committee and is heading to the floor of the House for a vote once it’s scheduled, although a vote is not expected until September at the earliest. The briefing was closed to the press.

Most Congressional offices now understand how loser-pay, bonding and joinder stops the flow of capital to innovation startups, how customer stays make defending patent rights impossibly difficult, why eliminating PRG estoppel perpetuates litigation shifting almost all of the costs onto inventors, and how IPR’s and CBM’s unjustly strip property rights and devalue all patents. Rank and file offices seem to be listening. However, key offices are deliberately deaf.

Members of both major American political parties from both the Senate and the House of Representatives came together at a press conference held on the afternoon of Tuesday, July 14th, to oppose the most recent round of proposed patent reform bills in either chamber of Congress. Meanwhile, rumors are swirling that suggest that the Innovation Act (H.R. 9) has been tabled for the rest of the summer in the House of Representatives.

During the last hearing of the House Judiciary Committee there was an attempt to insert language via amendment that would make it impossible for Kyle Bass and others to challenge pharmaceutical patents via post grant challenge at the Patent Office. Judiciary Chair Congressman Bob Goodlatte (R-VA) vociferously objected saying that if the amendment to prevent post grant challenges to pharmaceutical patents passed it would create a so-called scoring problem with the Congressional Budget Office (CBO). What an admission by Goodlatte! No legislative help is coming for pharma’s post grant challenge problem because the federal government likes the idea of some patents on important drugs being invalidated, which will save Medicare money.

Patent prosecution describes the interaction between applicants and their representatives, and a patent office with regard to a patent, or an application for a patent. (source: Wikipedia). It is a well-known term of art commonly used in the IP community. On the other hand, patent persecution describes the activities among various actors currently dismantling the US patent system, block by block. It is a recent phenomenon and seems to know no boundaries. (source: read the news!).

Today, our patent system is faltering. For the first time in our history, inventors and their counsel are considered villains for defending hard-earned patent rights. Companies that steal patents from inventors are called our innovators. The innovation world has turned up-side-down. A few misguided decisions by the courts and the “so-called” America Invents Act of 2011 has made it a CEO’s fiduciary responsibility to steal patented inventions and massively commercialize them with no concern for patent rights.

Having to defend their patent in post grant reviews such as an IPR can easily cost patent owners between $700,000 to over $1 million when the subject matter of the patent under challenge relates to the biological or pharmaceutical sciences, due in part to the need to cast a wide net for relevant prior art, according to experienced practitioners like Brad Olson, a partner with Barnes and Thornburg, LLP. Such expenses are particularly threatening to new companies finding the patents that drive their business under attack just as they are desperately trying to raise money for their very survival. Given the track record of IPR’s as “patent death squads” potential investors or licensees can’t be blamed for waiting until the reviews are completed to finalize pending deals.

Starting before World War II and continuing throughout the 1950s, 60s and 70s, short sighted and now discredited government antitrust policies, coupled with judicial hostility toward patent enforcement and patent licensing, converged to reduce the enforceability of patents and to restrict the ability of patent owners to license their inventions. The result: foreign competitors began to capture entire industries that should have been dominated by U.S. companies that had pioneered the relevant technologies.

The reach of the veil piercing is also unprecedented. The proposal implies that an inventor who assigns to other companies that make no products and stand to make a royalty is an interested party. Think about that – we are no longer considering charging just investors or shell company owners with attorneys’ fees. Instead, the proposal would pierce the veil all the way down to the inventor that assigned the patent to his or her employer. If this broad a reading seems unreasonable, consider the recent manager’s amendment, which clarifies to exclude lenders, because the language is so broad it might have included lenders before.

One thing that all the changes in patent law over the last decade has accomplished is to make it a far better business decision to infringe. There has always been concern in the patent holder community about something called the efficient infringement theory. Under this theory it makes more sense to infringe rather than to negotiate and seek an amicable resolution. In the past this was a problem largely isolated to small businesses and independent inventors who simply didn’t have the resources to fight when their rights were being infringed by a large entity that was not interested in participating in a responsible way in the honor system that Judge Michel describes. Today, however, efficient infringement is alive and well, and is a problem for all patent owners regardless of size.