Posts Tagged: "US Patent System"

I have come to the dejected realization that our patent system does little to protect anyone who does not have millions in the bank to defend their invention… So why would someone now choose to publicly disclose their invention if the likelihood of being awarded a patent is decreasing and the potential costs are increasing? In this inventor’s eyes, they won’t and I won’t, at least not without a lot of money set aside as a defense fund. That is why my decision today is difficult and why I have chosen to write about this. I have believed in our patent system, as my father did and grandfather does, but I cannot overcome the concern that given the current landscape, I am better keeping my knowledge in my head rather than sharing it with the world.

The American patent system represents a delicate balance. On the one hand, the patent system provides an incentive to invest in risky technical problem solving by giving an inventor an “exclusive right” for a limited time. On the other hand, from the time of the first Patent Act in 1790, patent critics have argued that patents block competition with a temporary monopoly. This tension has, nevertheless, enabled the rise of the U.S. as a major industrial economy, particularly after the Civil War. Optimally, the patent system encourages inventors to take risks to invent and disclose new and useful things by investing in ex ante costs before a later payoff. After a limited time of exclusivity rights, a patented invention falls into the public sphere, thereby providing a public interest in the long run. Economic and technological progress proceeds by building on previous inventions. Until about 2006, the U.S. patent system worked well, as evident in the development of the largest and strongest economy in the world.

We just don’t need another lawyer or lobbyist to run the USPTO. We need more this time. We need someone from the grassroots who understands the very real hurdles facing America’s most innovative segment. Congressman Thomas Massie (R-KY) comes to mind. He has built a company based on his patents and is a strong advocate for strong patents for startups. Hans Høeg, Congressman Massie’s Chief of Staff, also comes to mind. He is an inventor with a couple dozen patents and a startup built on patents. He also has four years navigating Congress and the government in his role working for Massie. He understands how patents work at the grassroots level, he understands the processes of the USPTO, he is experienced in patent law and licensing, and he understands how to navigate politically.

Perhaps when the Senate Banking Committee convenes to consider the nomination of Wall Street attorney Jay Clayton as the new head of the Securities and Exchange Commission they should ask about efficient infringement and the infringe at will culture. What is your position, Mr. Clayton, on the legal obligation of a public company to shareholders? Should publicly traded companies inform shareholders that patent assets are worthless, or at least worth less, given the legal and regulatory climate in America? Should publicly traded companies systematically infringe and ignore all patent rights? Should publicly traded companies be using billions in shareholder monies to aggressively collect patent assets while they are simultaneously using millions to lobby against the viability of patents? What exactly do shareholders have a right to know?

The result of attacks on the patent system has been a concerted critique of key elements for protecting patent rights. These have included enabling the PTO to attack patent validity in a second window, attacking classes of inventions such as software and medical diagnostics, limiting access to the courts, increasing costs of enforcement by several magnitudes and restricting patent remedies. The totality of these attacks on the patent system, enabled in large part by the expenditure of vast sums to influence policy by technology incumbents in order to protect their historic monopoly profits, has been to fundamentally alter a democratized patent system to one that requires substantial capitalization. The net effect has been decline of investment in innovation particularly by small entities that require patents as a key tool for competition.

One of Twain’s more strongly held beliefs was that the people of the United States had a unique drive and propensity for innovation, which made this nation a special one… In addition to all the accolades that can be bestowed upon Mark Twain, he was also an inventor himself. As the U.S. Patent and Trademark Office itself has reported, Mark Twain’s real-life alias Samuel Clemens was named as an inventor on three U.S. patents granted to the author during the 19th century. This Monday, December 19th, marks the 145th anniversary of the issue of the first U.S. patent granted to Clemens. U.S. Patent No. 121992, titled Improvement in Adjustable and Detachable Straps for Garments, was issued in 1871 and protected an elastic strap for vests, pantaloons and other clothes.

It is almost impossible to believe this report is the work product of the Obama Administration. The section on patents, which begins on page 134, reads like a cross between a Monty Python skit and a Soviet era, propaganda laden news report. Perhaps the Obama Administration is trying to rewrite history and brainwash the entire industry into believing that President Obama has been a tremendous defender of the U.S. patent system. Simply stated, the Obama Administration can write all they want about the importance of the patent system and how patents are critically important for innovation, but the reality is that the future of American innovation has been forfeited (or at least heavily mortgaged) by a calculated, intentional, and willful dismantling of the U.S. patent system for the benefit a handful of politically well connected companies that helped President Obama get elected and then re-elected.

Barack Obama came to office with the suspicion that patents caused higher prices and created market inefficiencies. He set a mission to disassemble the patent system, which culminated in the America Invents Act… Obama supplied power to the market incumbents, thereby fortifying their monopoly power, while depriving market entrants of critical tools. By strengthening incumbents and their industrial oligopolies, he harmed competition from market entrants, policies that generated the slowest growth in history.

Several weeks ago Internet Association President Michael Beckerman sent a letter to President Elect Donald Trump and the Trump Transition Team. The Internet Association is made up of companies that are by and large openly hostile to the U.S. patent system and innovators. The letter touched upon issues ranging from copyright safe harbors under the Digital Millennium Copyright Act (DMCA) to recommended reforms to the Electronic Communications Privacy Act (ECPA) to open access to the Internet and, of course, patent reform. I will confine my comments (see below) to the Internet Association’s patent reform commentary… Not that it should come as any surprise to anyone who follows the patent reform debate, but what the Internet Association says here is a lie.

The PTO then drifted towards being a very user unfriendly operation that has become a center of suspicion and cynicism. I do not think Director Lee necessarily played a direct role in this, i.e., guided this trajectory with policy objectives, but rather was present when it occurred. I do think, however, that politics and branding may have played a role. Kappos had been perceived as too “pro patent”; after all, he hailed from the PTO’s largest customer, IBM. Then Lee became the “anti-patent antidote”; hailing from a patent system foe, Google.

As more reports come out that patent filings for individuals and small businesses are down and a general recognition that real innovation does not come from large organizations, but rather small ones, it is becoming clearer that changes in our laws have decreased the previous standards that were in place to “promote the progress of science and useful arts.” As such, it seems to this author that our current patent laws are unconstitutional, or at the very least are thoroughly and completely frustrating the constitutional purpose for which they were created since our laws are promoting less and not “securing” our discoveries. We need to strengthen our patent laws to have a system that promotes the progress of science and useful arts by efficiently and affordably securing for inventors the exclusive rights to their discoveries and innovations.