The Patent Reform Act will harm the U.S. technology industry
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.
United States Senate
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.
US Patent and Trademark Office
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 line of defense for U.S. technology companies and inventors alike against all offenders, domestic or international. That's right. When a U.S. company believes its patents are being violated, its first and best line of defense is to seek an injunction barring products that incorporate the technology in question from entering the U.S.
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.
So, forget all the special interests for a moment and look at the obvious. While some patent reforms might make sense, The Patent Reform Act in its present form will ultimately harm the competitiveness of the U.S. technology industry at a time when we can least afford it. And it only gets worse from here.
Steve Tobak is managing partner of Invisor Consulting LLC. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure. 
So now we have a situation where billions or trillions of dollars worth of intellectual property once in the public domain is locked up in various private hands. And the author tells us to "forget all the special interests"? When it comes to software patents, what else is there but a collection of "special interests" who have stolen much of the basics of software innovation from the public domain? How does it help U.S. innovation and competitiveness to keep these ideas locked up and unusable by all but a few?
The real fix the system needs is to prevent broad vague patents from being granted and to require early findings in court that the patent is directly applicable to the alleged infringement. This would get rid of half of the junk lawsuits and protect patentee rights.
To the poster above I would simply say- ideas need to be protected by ownership.
Then the question becomes what's right for the world. The very existence of patents as a restriction on the rights of others to produce is a heavy burden that can only be justified if it shows a clear benefit to innovation. While you can show such benefits for many types of inventions, I don't think you can make such an argument for software patents, or at least software patents that last for more than a few years.
I truly believe the free and open source software fills a vital role in the ecosystem, to keep established companies from continually charging the public for innovation they performed several years ago. The slow slide of all software into public domain ought to be the true impetus to innovation, and strong software patents only get in the way. However, you can get a lot more money and development power behind proprietary development in certain markets, so I don't think you can argue weak software patents are a threat to the economy.
Remember, the purpose of the economy isn't to let people get rich. The purpose of the economy is to provide lots of goods and services for trade and to make sure that those willing to work for a living can partake roughly according to what they provide.
You say that the opponents to the Patent Reform Act are technology licensing, biotech and pharmaceutical companies. While these groups are definitely opposed, there are many others that are also opposed:
The National Venture Capital Association ? No more money for you!
The Institute of Electrical and Electronics Engineers (IEEE) ? No more engineers for you!
The Medical Device Manufacturers Association ? No more stents for you!
The National Association of Manufacturers ? No more stuff for you!
The Motor & Equipment Manufacturers Association ? No more cars for you!
The AFL-CIO ? No more American jobs for you!
The American Intellectual Property Association ? No more patent lawyers for you!
The Grocery Manufacturers Association ? No more Twinkies for you!
Numerous Research Universities ? No more new technology for you!
As you pointed out, the Patent Reform Act is backed principally by a small group of very large tech companies who are upset because they have to pay less than 1% of their revenues as patent royalties to University researchers, independent inventors and small technology companies with new ideas.
The opposition to the Patent Reform Act includes almost everyone else.
Nice list of those opposing patent reform but it needs numerous additions including strong opposition from independent American inventors including the Professional Inventors Alliance as well as inventors in other countries availing themselves of the advantages of our patent system. This list would also include many if not all patent professional groups including the Patent Office Professionals Association.
All in all, I cannot see how this legislation has progressed this far. It is clearly a cheap attempt to grab rights granted to us under the Constitution. It is clear that the proponents of this legislation are well funded and organized. Grassroots opposition, I trust, will be sufficient to stop it.
Those questioning opposition to patent reform all harp on software patents. They need to be reminded that patents can be obtained for physical devices as well as pharmaceuticals, etc., and those might require strong patent protection. This proposed legislation will affect the entire patent system in this country, not simply software patents.
Steve Tobak
Isn't global competition an incentive to innovate? As in "Innovate, or go out of business?"
And if the large technology actually decide to pack it up and resolve themselves into a dew because they don't have this legal advantage, wouldn't the innovations still reach the populace from those foreign companies?
That said, off the top of my head, it doesn't appear, at least on the surface, that this legislation will have a significant effect on open source software since it's so hard to patent.
Steve Tobak
- by dinnertime August 27, 2008 9:44 AM PDT
- Steve-
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(19 Comments)You really get it! Many thx.
please see http://www.piausa.org/