The Patent Reform Act Will Harm the U.S. Technology Industry (Stalled But Not Dead Yet)

cnet ^ | March 6, 2008 | Steve Tobak

[khnyny]

The proposed Patent Reform Act of 2007 will be coming up for a vote in the Senate in a few months. A similar version of the bill has already passed in the House.

The bill has certain relatively benign provisions, but let's ignore them since they just cloud the argument and are of little interest to either side in the debate.

Let's instead just cut to the chase. In lay terms, the bill makes it easier to challenge issued patents and harder for patent holders to obtain compensation through the U.S. legal system.

Regardless of how that sounds to you, make no mistake - this debate is between two opposing sides with their own interests at heart.

In one corner are big technology companies such as Apple, Cisco, Dell, Google, HP, Intel, Microsoft, Oracle and SAP. These folks make a living selling products and services. They say that patent abuses in the current system are stifling innovation.

In the other corner are technology licensing companies such as 3M, Qualcomm, Rambus, Tessera, and biotech and pharmaceutical companies. They say the act will limit patent holder's rights and stifle innovation.

While each side claims the other limits innovation, the truth is that neither side cares about innovation; they are only concerned with their business model. That's not necessarily a bad thing, since a company's duty is primarily to its shareholders, but it does bear mentioning here.

Here's how I see it: Over time, U.S. technology companies actually manufacture fewer and fewer products. We are now under intense and growing competitive pressure from companies in China, India, Taiwan, etc. Our technology lead is being challenged like never before. Nobody seems to debate that.

That said, we continue to be the world's technology leader because we invent. And the U.S. courts are the first

[khnyny]

Also from the article:

"The proposed Patent Reform Act will therefore weaken the rights of U.S. patent holders, whoever they are, and wherever the offending company is, period. Moreover, it will have a ripple effect in international patent offices and courts, thus further weakening the patent rights of U.S. companies overseas."

[nyyankeefan]

if the chinese cannot invent it ~ they will steal it and send knock offs to the US...of ocurse the lib/dems think this is great and don’t worry ~ when b. HUSSEIN is POTUS - he will talk with the chinese!!!

[Eurale]

As a holder of several U.S. utility patents, I can attest that stealing patents today is easy to do. Here’s how it works:

1. Inventor spends tons of money developing technology and obtaining patent.

2. Inventor spends tons of money beta-testing, developing markets, business models, etc., etc.

3. Big Japanese company steals patent and markets your product, while saying “sue us”.

4. Inventor spends > $400K on patent prosecution lasting years, while overseas firm saturates market with your patented product, and pocketing money

5. After years in court, inventor wins. No damages are allowed or retroactive moneys.

6. Inventor is allowed to keep money from sales only after the date of the judgement, however the product lifecycle is up, and the foreign firm has already patented the second generation product from the original.

American inventor = screwed

Japanese firm = wealthy

Trust me, that’s exactly how it works.

[khnyny]

Hmm, perhaps it would be better for Congress to concentrate their efforts on protecting the American patent system and American inventors. Oh, that’s right, there’s little campaing money in doing that./s

[khnyny]

Here’s the most important (imho) part of the current “legislation”:

[The Patent Reform Act would require the publication, online, of all patent applications 18 months after filing — even if no decision has been made on granting a patent. That means that inventors big and small would see their precious creations exposed to the world, in all their scientific detail, with no certainty of ever gaining patent protection. And copycats around the world would have more than a year to duplicate the invention and even claim it as their own.”]

So...in other words - here it is world - take it.

[bluedressman]

I’m not generally supportive of more regulations....

but since pharma is so subject to FDA, their considerations for patents should be treated differently than computer technology.

[Eurale]

Precisely. The U.S. has done nothing to protect its citizen’s intellectual property rights. So, why go to all the effort? I paid just under $1M to learn that lesson, and still haven’t recovered financially. The “American Dream”, from an inventor’s perspective, is just a tagline. Nothing more.

[Carry_Okie]

[The Patent Reform Act would require the publication, online, of all patent applications 18 months after filing — even if no decision has been made on granting a patent.

My most recent application just received a notice of allowance, after eight years.

[PGalt]

Interesting. Thanks for posting. Thanks to all contributors to this thread.

[Grut]

Trust me, that’s exactly how it works.

At least you got a patent; for most of us the patent system is so expensive that it might as well not exist.

[Eurale]

:... the patent system is so expensive that it might as well not exist.”

If the invention is a product, I would advise anyone to spend the money on bringing the product to market with as much force as possible. Competitors are less likely to invest in chasing a product that has already saturated the market. That leaves only knock-offs and next generation competition. A patent, unless you’re Bell Labs, Microsoft, etc. means nothing anymore. International patent protection is even more of a joke!

[razorback-bert]

An amen from the choir!

[Melchior]

Name the forces in Congress that favor the bill, and those that don’t. That will give a better idea if it is pro or anti-capitalist.

[ketsu]

If the invention is a product, I would advise anyone to spend the money on bringing the product to market with as much force as possible. Competitors are less likely to invest in chasing a product that has already saturated the market. That leaves only knock-offs and next generation competition. A patent, unless you’re Bell Labs, Microsoft, etc. means nothing anymore. International patent protection is even more of a joke!

If it gets rid of software patents and patent farming I'm all for it. Also if it makes it easier to challenge spurious patents(i.e. One click shopping) that would make me happy too.

[bvw]

And the U.S. courts are the first line of defense for U.S. technology companies and inventors alike against all offenders, domestic or international.

There's the tell. Neither a court nor a lawyer is ever the first line -- or even second or third line -- of defense for promoting progress in technology and science. What are the REAL defenses?

(1) The free flow of information.
(2) The nurturing of the creative.
(3) The freedom from fear of punishment when one uses or applies creativity.

It is the nature of human institutions to hammer down upon the truly creative and innovative, the "different". And few human enterprises do that as well and with such power as the courts.

Companies who are creative and innovative do not succeed because of patents -- they succeed despite them.

[The Spirit Of Allegiance]

FYI

[ShadowAce]

[antiRepublicrat]

I have heard this bill doesn’t go far enough for real change. If it’s not now, punitive damages should definitely go from the time of the filing of the suit.

[antiRepublicrat]

So...in other words - here it is world - take it.

This is meant to stop submarine patents, where a patent is filed in secret, usually to include things created by others during the time, then ta-da, someone who actually invented something is getting sued for patent infringement. Lemelson was a master at these.

[antiRepublicrat]

Name the forces in Congress that favor the bill, and those that don’t. That will give a better idea if it is pro or anti-capitalist.

It depends on who believes the tripe in this article. This bill is in large part anti-capitalist. Companies are afraid to develop anything these days for fear of getting sued over an overbroad or obvious patent. If they're not afraid, at least they have to count on getting sued for anything they do. That is anti-capitalist and against the constitutional grant of patent monopoly. The first thing that needs to be done take the concept of what can be patented back to about 1980, then let the USPTO keep its money to hire competent examiners, make it easier to challenge a patent, and make it harder to take the USPTO to court over rejected patent applications.

This will result in fewer, but higher-quality, patents, ones that actually "promote the Progress of Science and useful Arts." Because if they don't then there is absolutely no constitutional basis for their existence. Yes, this is a constitutional issue.

Madison was naive to think that the will of the people could keep government-granted monopolies from being abused. Jefferson's reservations were prescient.