State of Innovation

Patents and Innovation Economics

Guest Post: America Invents Act about Protecting Large Corporations

Dear Friends,

It is easy to take for granted what we have in America.  Even with a terrible economy and crazy politicians, we are still better off than other countries.  Consider how many people try to get to America.  No other country has its equivalent of the “American Dream.”  What is it that makes America different?

When every nation on earth was run by aristocracies, a few great men stood up and said we will create a nation where the every person has rights and the individual is empowered with responsibility for his government and his society.  Furthermore, we will grant him the rights to that which he creates and will take away the barriers that other countries have for those who innovate.  At the time in England, only the privileged could afford to invent.

The patent system that our Founders created was revolutionary at the time, and continues to be significantly different and more favoring of the creative individual than the systems of other countries.  Other patent systems favor large companies and vested interests, and that is one reason that America has out-innovated the rest of the world so significantly.

So, why would large companies that seem to benefit from a good patent system want to radically change it for the worse?  Bill Gates said it best in an interview years ago with Ken Auletta:  “The thing I worry about is some guy in his garage inventing something I haven’t thought of.” Once a company becomes large and has vested interests, it innovates less and tries to protect the income streams it is already receiving.  The vested interest cannot help but try to impede innovation that will become competition.

The America Invents Act was written by the top attorneys of two of the key, large, multinational companies that are behind this bill.  They weren’t thinking about you and me when they wrote it.  In fact, fee diversion wasn’t even mentioned in the first version that was brought to the Senate (!) – it was added in an amendment.  How could anyone who cares about our patent system not even address fee diversion?  The answer is that they have different motives.

Up until now, our patent system has protected and supported the individual inventor, as our Founding Fathers intended.  The America In vents Act changes that.  If you are not aware of the issues, see the attached document.  The bottom line is that a big part of what our Founders provided for us, and that is part and parcel to the success of this great nation, is about to be ripped away.  The America Invents Act could face a final vote next week.  If you care about this country, about freedom, and about the value of the individual, please call your senators and tell them you are against this bill.  For talking points, use last night’s email or go to   Please call tomorrow, Friday.  For your senators contact information, go to  Every man, woman, and child who has ever hoped to pursue the ”American Dream” is depending on you.  Please help in this critically important matter.


Best Regards,

Randy Landreneau, President

Complete Product Development



September 3, 2011 Posted by | -Law, Patents | , , , , , | Leave a comment

Open Letter to Inventors from Randy Landreneau

Dear Inventors,


The Senate is about to take up the America Invents Act.  It is possible that this act will be the first thing addressed when they return to work Tuesday next week, September 6th.  A motion for cloture has been filed, which means a very limited debate if the motion gets a three fifths vote.  In this event, we could see the final vote on the bill take place next week.  Here’s the short version of what is wrong with the bill.


  1. The America Invents Act Will Increase The Time It Takes To Get A Patent: The biggest problem of the patent office, some say the only problem, is the time it takes to get a patent – 3 years plus on average and increasing.  Held-up patents mean held-up jobs, business ventures, and dreams.  At a time when the patent office needs every penny it receives in fees to improve its ability to handle its workload, fees are being stolen by Congress ($100 million this year alone!).  The only thing in the bill that would have helped reduce the backlog was the original Senate version’s guarantee that all of the fees paid by inventors to the patent office would be only available to the patent office.  The current House version put the Appropriations Committee back in charge, the same group that has been responsible for taking inventors fees.  In the face of current deficits, fee diversion will undoubtedly continue.  The only thing that would have helped reduce the patent backlog is gone now.


The change from First-to-Invent to First-to-File will create a rush to file that will increase the patent backlog, further increasing the time it takes to get a patent.  This belief is borne out by what happened in Canada after a similar change.


  1. The America Invents Act will Reduce Job Creation: Census data has shown that net new job creation in the US over the last 30 years comes from startups.  Large companies tend to export jobs.  If you compare the US to Europe, you know that the US has had more entrepreneurial activity than Europe.  The US has produced more groundbreaking technologies.  The First-to-Invent Patent System of America supports entrepreneurship and the First-to-File systems of Europe do not.


In a First-to-File system, the risk of another person filing for the patent before the initial inventor causes inventors to have to greatly reduce any communication with outside parties regarding their inventions.  Individual inventors, who are the greatest source of real innovation, usually need to work with others in research, development, funding, and marketing prior to filing for a patent.  Large companies, on the other hand, can often do everything needed within their walls.  In America, historically, an individual inventor could work toward making an invention successful without having to be nearly as secretive as a European inventor.  In First-to-File countries, inventors have a great incentive to not disclose an invention to anyone prior to a patent application being filed, leading to under-researched, under-developed inventions, and weaker patent applications.  Putting such burdens on individual inventors greatly reduces innovation.  This is a big reason why America has had a multitude of new technologies and new companies while Europe has been dominated by old companies and vested interests.


A friend who was an engineer at a large, well-known electronics company in America told me that if any employee came up with an invention that was too good, it got shelved.  The reason was that it would upset current product lines that are profitable.  Vested interests do not want someone coming up with an invention that will compete with them.  This is why large companies have been trying to change our patent system for many years.  The irony is that many of the large companies supporting this bill can be traced back to one innovative individual who was supported by the American First-to-Invent Patent System in his pursuit of the American Dream.  If innovation and job growth are the goal, changing from First-to-Invent to First-to-File makes no sense at all.


  1. There is much more.  Corporate attorneys will have an additional expensive procedure to use to challenge issued patents and will use it to wear down and defeat potential competition.  Past requirements that attorneys and inventors act “without deceptive intent” are repealed in the bill (!).  Companies will be able to keep trade secrets for as long as they want, hiding the information from the rest of the world, but still retain the right to keep making or using the product if someone else patents the invention, and will even be able to get a patent on the Trade Secret at any point in the future.  Harmonization is not only not accomplished with the bill, but there are situations where the bill creates disadvantages for American inventors relative to inventors from other countries (prior art cutoff date for obviousness).  Section 18 sets up a special procedure for challenging the validity of business method patents, under a weaker standard than any other kind of patent (a gift to big banks so they don’t have to worry about the valid patent of Claudio Ballard – if you don’t know the story, look it up and prepare to be outraged).  If you want more, go to  If all of the above weren’t enough, Thomas Jefferson, himself, opposed a similar change to First-to-File over 200 years ago, and many legal experts have stated that the proposed change is unconstitutional.


As usual, the odds are against us.  But that has been the case with virtually every decent effort any man or woman ever embarked upon.  Many saints were viciously killed by their numerous detractors.  Since we’re inventors, how about Galileo?  For publicizing his discoveries, he was tried for heresy by the Inquisition, threatened with torture, sentenced to house arrest for life, and not even absolved of his “crimes” until 1992!  You may not know that in our American Revolution, only about 1/3rd of the colonists were even for it.  The odds were phenomenally bad.  We won only through the efforts of heroic individuals, and we can win again here.


The America Invents Act is an example of the worst of politics and influence.  The result of its passage will be less innovation, fewer jobs, and a worse future for America.  But amazingly, many of the politicians who are about to vote on it know very little about it.  Their large company supporters are saying to vote for it, and the few of us fighting it are being drowned out.  The only way we can stop it is to call our Senators and educate them.  I am convinced that most of our Senators are sane enough to understand the issues if someone tells them.  Please call your senators and communicate the truth to them.  You can make a difference.  Do it because it is right.  Help defeat this bill.  Call this week (to find your Senators, go to  Don’t wait, it could be too late.  Thank you.



Best Regards,


Randy Landreneau, President

Complete Product Development


September 1, 2011 Posted by | -Law, Patents | , , | 1 Comment

Guest Post: Philip Furgang – Big Business Wins In Proposed Patent "Reform"

The future of America lies in its ability to be creative — to “out think” the rest of the world. Come up with a great idea and you can become rich. You can build a business that will create many jobs. And there is a system in place to protect inventors, the patent system. Think of those who have done it: Thomas Edison, Henry Ford, Steve Jobs, Bill Gates, the Wright Brothers, and many, many more. That system, the system which made it all possible for the US to lead the world, a system in place since 1789, the system is about to be changed to discourage creativity, and to hobble the independent inventor. Large corporations have mounted a large lobbying campaign, spending huge sums of money, to get the so-called “America Invents Act” through Congress. They must be stopped. [More . . ]

Zach Carter observed in the Huffington Post:

Today, the patent bill looks like a scorecard tallying points for powerful corporations: a win for pharmaceutical companies whose monopolies are driving up Medicare costs; a win for Wall Street’s battle against check-processing patents . . . .

Left out of the tally is the public, even as the economic landscape for American families grows darker. Historian Richard Hofstadter famously observed that Congress during the Gilded Age busied itself with dividing the nation’s spoils among the rich and powerful. But as the current patent struggle suggests, the spoilsmen are back and Washington is once again an arbiter of who lands the lucre.

Here is just part of what the so-called “American Invents Act” will do if it becomes law and what you can do to stop it.

What the Proposed Bill Does:

Imagine this: you have a dispute with a large corporation and decide to sue. Then you find out that the winner of the law suit will be decided by, of all things, a race. Whoever wins the race to the courthouse steps wins the law suit. Sound ridiculous and farfetched. Think again.

Under the present system, the one who invents first gets the patent. What this means is that an inventor can’t be stopped because a huge corporation can beat the inventor to the door of the Patent Office. Under the so-called “reform” it will be whoever wins the race to the steps of the Patent Office will get the patent!

The repercussions are much broader than the obviously dishonest idea of giving a patent to someone who wins a race to the door of the Patent Office. To develop inventions takes time, effort, and money. By awarding patents to first inventors, the current system encourages development. Going to a first to file system, as called for in the proposed law, will discourage developments. More than that, it would increase the likelihood that patent applications would be defective because they would be filed too early in the development stage. But this is precisely the barrier to independent inventors that large corporations, who oppose startup competition, crave. Given such a situation, it would be no surprise that investors will be disinclined to support startups.

The current Patent Act encourages inventors by providing a grace period for filing a patent application. During this period small companies can go to the marketplace, seek financing, find manufacturing and marketing partners, or decide whether or not to file a patent application.

Under the proposed act, the grace period would be eliminated. Go out and promote your invention and you lose the right to file. This means that small businesses will have to file first and then find out if they should commercialize an invention afterwards. The proposed act would cause small businesses to incur additional and unnecessary expense, and thereby discourage innovation, development and job creation.

Under the present system, if a new method of doing business (say, a great way of delivering music on the Internet) is created, it can be patented.

The new act, if it passes, eliminates business method patents. There is not a single other industry that has a special patent provision to protect it, not one.

The present law gives competitors the right to have the Patent Office review an issued patent. The proposed law would give competitors more weapons to have patents reviewed and re-reviewed, in order to delay inventions and innovations and upwardly spiral an inventor’s costs. So to the cost of patenting an invention add the cost of defending it again and again and again. This ups the price and the risk for small companies and puts them into expensive (very expensive) litigation, litigation they might not want, may not be able to afford and may not be ready for. The mere existence of these procedures will be another way of closing out the small inventor and small businesses.

Under current law, a company must file a patent within one year of putting the invention into commercial use, whether or not the public is aware. The new act would changes the rules. A company will be able to use an invention in secret for years and then file a patent application years later. This undermines one of the major objectives of patent law – to bring the benefits of innovation to the public as quickly as possible. After all, the Constitution provides Congress the power to enact laws that “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Today, it’s one patent for one invention. The new act permits the filing of multiple applications for the same invention. Issue multiple patents for the same invention and thereby create a legal thicket which will be used to block startups and competition.

This one’s a beaut. Today an inventor must disclose the best method of making the invention. Under the proposed act, a large company can keep the best method secret so long as they can show some other way of practicing the invention. The whole idea of the patent system is to require the inventor to provide for the public benefit the best way of making the invention so that when the patent ends, everyone can make the invention. Now, large businesses can hold the best methods and processes secret, thus the defeating the purpose of our patent system.

What Can Be Done About It:

Congress is in recess but they will take up the bill when it returns in early September. As complicated as the America Invents Act is, opposition is straight forward. If you agree that the proposed bill is wrong, you can:

Telephone your Representative and Senators right away and tell them to vote against the America Invents Act. You can find the name and phone number of your representative at this link. You can find your Senators’ contact information at this link.


Philip Furgang, a noted New York patent law practitioner. Philip is the author of the forthcoming book, “Patent Prosecution” (Oxford University Press.)


September 1, 2011 Posted by | -Law, Patents | , , , | Leave a comment

Guest Post: Dale L. Carson – Patent reform: One giant step backwards?

Philosopher George Santayana’s sage words: “Those who cannot remember the past are condemned to repeat it,” ring as true today as they must have when he wrote them in 1905. The words aptly apply to the ineptly titled “America Invents Act,” S. 23 and H.R. 1249, currently meandering through Congress.

Perhaps President Barack Obama is preparing for the day when he can sign the bill into law. That day is likely to bring woe to patent practitioners and users of the patent system alike, and particular woe to small inventors and startup businesses that collectively drive our nation’s economy.

As perchance an omen of tumultuous times ahead, Obama was seen holding a copy of Aldous Huxley’s Brave New World at the Bunch of Grapes book shop during his recent summer idyll on Martha’s Vineyard. Written in 1932, Huxley’s tome depicts a distorted social order, ushered in by the darkness of the Holocaust, in which science, technology and the media are collectively used to control human behavior.

U.S. patent law is rooted in incentivizing inventors to innovate in, among others, the fields of science and technology. The current patent reform initiative is steeped in media jargon promising job creation for America at a time when jobs are desperately needed. Unfortunately, there’s no data to support this promise. Indeed, all empirical evidence points to the likelihood that this patent reform will result in job destruction.

It goes without saying that Congress has the power, working in concert with the president, to reform or deform the patent system as we know it. In short, its members can change the patent laws of our nation in a manner that would reframe the social order pertaining to patents for better or for worse.

Giles S. Rich and Paul Rose, co-authors of the 1952 Patent Act governing our nation today, opined on the differences. They concluded that patent reform should be adopted if, and only if, the proposed changes increase the incentive force associated with our patent system.

A key incentive provided by our patent system is the incentive for inventors to disclose their invention in a patent application in exchange for the possibility that they may achieve a patent grant in return. The subsequent publication of the patent application serves to inform the public about the invention, and thus enables others, including competitors, to build upon it. The net result of this incentivization is to promote “the Progress of the Useful Arts” as mandated by Article 1, Section 8, clause 8 of the Constitution.

Certain provisions of the patent reform bill will have the ill effect of disincentivizing small inventors and startup companies from using the patent system in the first instance. One provision would award the patent to the first person to file a patent application on the invention, rather than the one who is actually the first to invent. Another provision would eliminate the “grace period” that has traditionally provided a safe haven to allow an inventor to get his or her invention “off the ground” without forgoing the opportunity to patent it. The net result is to change the social order for patenting in a manner that selectively demotivates small inventors and startups.

There is no reason to believe that such changes will benefit society as a whole. To the contrary, the proposed changes will work to society’s detriment by disincentivizing inventors who fear that they can’t possibly win a race to the patent office and can’t properly vet their invention with others before filing. In short, these changes will discourage these inventors from disclosing their invention in a patent application.

Discouraging disclosure of inventions undermines a key incentive of our patent system, namely the incentive to disclose, and thereby undermines the patent system as a whole by inhibiting third- party access to information about those inventions, thus slowing down the rate of innovation.

Another proposal in the patent reform bill would adopt the European-style opposition protocol–ambiguously described in the bill as “post-grant review.” Such a protocol is analogous to the inter partes re-examination form of post-grant review that is already available under the existing U.S. patent law. The fact that a European-style opposition procedure was adopted by Japan, China and South Korea two decades ago, and was subsequently abolished in each of those countries within a decade, should be enough to give Congress and Obama pause.

The call for the United States to adopt a European-style opposition procedure is not new. It was bandied about back in the late 1980s during the Reagan era, as a bargaining chip in trilateral talks among Europe, Japan and the United States in an effort to “harmonize” their patent systems. The United States chose not to harmonize and did not adopt such a system then. Unfortunately for Japan, it did. Our nation needs to recall that history now.

At this critical juncture in the patent reform debate, the salient questions are: Why would a country that is a world leader in inventiveness change its patent system to comport with that of a European protocol that has been tried and shown to fail elsewhere? Why adopt “first to file,” and eliminate the “grace period” for filing, in the absence of evidence that doing so will improve the inventiveness of our nation’s inventors, which it clearly won’t?

So far, Obama’s term in office has been unremarkable, to say the least. The reasons, for what can be described as an abject failure of leadership, are set forth in Drew Weston’s Aug. 7, 2011 opinion piece in The New York Times entitled “What Happened to Obama?”

Mindful of Huxley’s warning about our “new world,” we can only hope that Obama, if not Congress, will reflect upon the likelihood that a patent reform initiative that has been tried, and found to fail in other countries, should not be adopted because it is likely to fail here. Likewise, a patent reform initiative that demotivates inventors with limited means should not be adopted because it is the antithesis of the incentive system that our patent system was established to provide. Both initiatives would deform our patent system, rather than reform it.

If neither Congress nor Obama respond to the risk posed by the patent reform bill, Huxley’s apocalyptic vision of control over human behavior via manipulation of ownership of science, technology and the media may become a reality sooner than we think. Under those circumstances, history will have all the more reason to discredit Obama’s term in office.

Dale L. Carlson is a partner at Wiggin and Dana in New Haven, Conn., an adjunct professor of patent law at Quinnipiac University School of Law in Hamden, Conn., and immediate past president of the New York Intellectual Property Law Association, the largest regional IP law association in the country.


September 1, 2011 Posted by | -Law, Blog, Patents | , , , , , , , | Leave a comment

Guest Post: Gary Lauder on America Invents Act

Gary Lauder runs Lauder Partners LLC in Silicon Valley.  The firm is a private venture capital firm.

This page is not dedicated to the idea that our patent system can’t be improved; but rather that the specific changes in the “America Invents Act” would be bad for entrepreneurs and small companies.


One word: Bad


One sentence:

Due to the willful exclusion of small companies from the process, congress and the administration have crafted a bill that might mildly benefit big companies, but would drastically harm technology entrepreneurship/start-ups.


One paragraph:

There are many things wrong with our patent system, and many ways in which it might be improved, but this bill does not materially improve it, and would make it much harder for start-ups to obtain and enforce patents.  Unlike the Senate bill passed in March, the bill passed by the House (HR1249) in June does not fix the problem of the patent offices’s fees being diverted to help cover our federal deficit.   The change to First-to-file would be a benefit to those who would like to steal others ideas, and consequently will force entrepreneurs in the USA to have to follow the same advice that exists in Europe: file for your patents BEFORE talking with investors, potential customers or even potential co-founders.  This will stifle the open innovation model that has flourished in America.  Other changes will make it easier to accidentally lose the ability to obtain a patent (e.g. if you offer your invention for sale or publicly use it), will more easily enable an infringer to defend themselves by showing such actions prior to the plaintiff’s application, and will enable infringers to postpone the issuance of other’s patents by filing expensive post-grant review procedures…which can also cost a company more than they can afford.  The proponents have sold this bill based on superficial talking points that sound plausible, but are deceptions.  Every well-known US inventor opposes this, as does Judge Paul Michel, the US’s #1 patent judge who resigned early from his lifetime appointment in order to speak out against this.


Longer pieces are linked below.  URL’s are visible for ease of copying & forwarding.  Related articles are lumped together.


Requested action:

Please call your senators (and any others) to express your disapproval of this bill.  Their phone #’s can be found at:


Gary Lauder’s writing and publications on patent reform:
One page article = 650 words: “Patently Absurd Changes Threatening Patent System” in Venture Capital Journal, 6/1/11: Reprint at:
Magazine at: (subscription required (free trial available))
4.7K words and most current and complete: Unpublished: “Patently Absurd: Or How to Go From the World’s Best Patent System to Worst-Than-Most in One Easy Step” 7/11/11:
2K words: The Huffington Post, 3/7/11, “Patently Absurd or: How to Go From the World’s Best Patent System to Worse-Than-Most in a Single Step” (Note: comment function no longer works)
4.3K words (and a bit dated): “Venture Capital: “The Buck Stops Where?” in Medical Innovation & Business, Summer 2010, Volume 2, Issue 2, p.14 – 19

Gary’s 4-minute speech at the Aspen Ideas Festival in early July:

Audio only:

It’s also on YouTube, but the visuals don’t add much:


The main reason why the administration favors it: they hired the main proponent of patent reform and made him the head of the PTO:

Here’s his testimony in favor of patent reform while at IBM on 3/10/09:

Kappos’s ongoing promotion of patent reform was in violation of Obama’s Revolving Door Ban which Kappos signed:

“I will not for a period of 2 years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts.”


Why the “America Invents Act” is Bad for Startups and Bad for America by David Boundy (a patent attorney)“america-invents-act”-bad-startups-and-bad-america-david-boundy


Intellectual Property Watch Interview With Chief Judge Paul R. Michel On US Patent Reform, July 14, 2011


This presentation is by Steve Perlman, an entrepreneur whom I have backed twice who also is an inventor in >100 patents:

House bill took out the PTO funding part (which was the only thing good about the bill that he referred to)


History of broken promises regarding fee-diversion (why the present bill doesn’t fix the problem):


The problem with First-to-File (FTF) for start-ups as well-described by Senator Diane Feinstein:
YouTube (20 minutes):
Text of her speech:
Senator Cantwell’s speech in favor of the Feinstein Amendment (7 minutes):
There is a cyber-security problem w/FTF that has been completely ignored. The best description of this threat is in the attached letter from the Inventors Network of the Capital Area to Speaker Boehner:

America Invents Act (formerly Patent Reform Act of 2011) – so big business can more easily steal inventions

America Invents Act – the erosion of inventors’ due process protections and a legislative cover for theft of patent rights


Op-Ed against by Rep. Manzullo


WP: “Patent reform measure ignited fierce lobbying effort” (exposes the vast sums the proponents are spending)


National Venture Capital Association position (against):


Judge Paul Michel: “Rein in the Big Bank Bail-Out” 7/7/11

Andrew Ross Sorkin/DealB%k: “In a Bill, Wall Street Shows Its Clout” 7/4/11
Jonathan Massey: Section 18 of H.R. 1249 Would Bail Out Banks and Expose the Treasury to Billion-Dollar Liability


Judge Paul Michel on Post-Grant Review (PGR): “Torpedoing Patent Rights” 7/11/11


Former Senator Birch Bayh on the misuse of EXISTING post-grant review procedures (7/11/11):


The most comprehensive coverage even though it under-represents the proponents’ views:


Small Business Organizations Urge Substantial Amendments to House Version of Patent Bill


Several Universities Oppose Pending “Patent Reform” Legislation

Detailed letter from one of those universities:


Two former Chairs of the House Judiciary Committee


Article on how the bill won’t solve the backlog and will probably worsen it:


Article by Chinese IP judge on prior bill that is mostly the same as this one.  Last page is perfect summary:


Source of information on the monies that flowed to congress associated with the bill:


National Small Business Assoc. (NSBA) opposition:


Inventor of MRI: Ray Damadian’s critique: “Patents Shrugged Redux” 6/16/11


Foreign Policy Magazine: “The Prevent American Invention Act” by Clyde Prestowitz, 5/16/11


Another overview article: Patent Reform Favors Corporations, Multinationals


Brookings article on bill that does not take a position but is revealing: “Balancing Disclosure, Protection of Trade Secrets, and Patentability in Light of Patent Reform”


Two papers on the problem w/the Grace Period by Dr. Ron Katznelson:

How we got here: “Section 2 of America Invents Act: the undisclosed story of legislative obfuscation”:

Last year the ENTIRE issue of Medical Innovation & Business magazine was devoted to patent reform – against it.  I have never before seen an entire issue of magazine dedicated to stopping bad legislation:

(I wrote one article in it)


URL’s are self-explanatory:


Hoover Institution:  6/7-13/11

The Perils of Patent Reform

Welcome to Patent Purgatory

Patent Reform Goes Haywire

File First, Invent Later?
NY Times, “Two Views of Innovation, Colliding in Washington” By John Markoff, 1/13/08 It is still quite relevant, particularly as it applies to the law of unintended consequences:

Other relevant info on bill:


Congressional Research Service’s 35-page report on the bill.  One of the authors (John Thomas) was on IBM’s payroll and has shown a pattern of bias in favor:

John Thomas’s long association with IBM:,+John+R.%22+or+%22John+R.+Thomas%22+IBM&ie=UTF-8&oe=UTF-8

His decade-old backgrounder on international patent law (interesting, but not opined on here):


Unfortunate Statement of Administration Policy


Bill itself:

The bill’s Grace Period language is quite confusing. Compare the bill section 102 (p. 5-9) with the existing Grace Period law:

See if you can figure out the double/triple negatives.  The proponents created a deception that takes advantage of the confusion to state that the bill means the opposite of what it really says.  The colloquies on this claim the bill means the opposite of what it actually says.  Courts hold that the bill always supersedes the colloquies.
Senate Colloquy:


Web sites against: (Links to excellent articles on the bill’s constitutional problems)


Hall of shame: Organizations who should have stood up for start-ups/tech entrepreneurs but have, in the words of Dante “retained their neutrality”:

The Kauffman Foundation


The Small Business Administration


The movie, “Flash of Genius” was based on a book about Robert Kearns, who invented the intermittent windshield wiper, and his struggle w/Ford to get paid after they ripped off his invention.  It is a perfect example of what entrepreneurs face and what we are fighting to keep.  If you have not seen it, I recommend it.



Amazon Instant Video:

Roger Ebert review (3 stars our of 4):

Book: Flash of Genius: And Other True Stories of Invention (by John Seabrook Paperback – Sep 2, 2008)

New Yorker article that tells the story (also by John Seabrook)(about 23 pages when printed out):


Please call your senators (and any others) to express your disapproval of this bill.  Their phone #’s can be found at:






July 24, 2011 Posted by | Patents | , , , | 1 Comment

America Invents Act H.R. 1249 Passes House

The America Invents Act passed the House with a vote of 304-117 Thursday, 6/23/11, night.  The House (H.R. 1249) version differs from the Senate version (S.23) so the passage of the Act is not a done deal.  The major difference was the House version stripped provisions stopping fee diversion.  Some people are optimistic that the Bill will die in conference because of these differences.  I hope they are correct, but I am not optimistic.

This Act is the greatest weakening of property rights in the history of the United States.  This Act will ensure that America will suffer declining levels of innovation, chronic high employment, falling wages, and anemic economic growth.  Increasing our level of technology is the only way to increase real per capita incomes.  This lack of growth will result in the United States going through a major financial crisis within the next four years, which will lead to a great depression.  Most economists will not predict this or understand it after the fact, because most economists confuse money with wealth.  They think that by manipulating the money supply and tinkering with tax rates you can create economic growth.  Those few economists who understand that increases in technology are the only way to sustained economic growth, often do not understand the importance of property rights.  Their lack of understanding will not save the United States from the consequences of its actions.

June 24, 2011 Posted by | Patents | , , | 8 Comments

House Debate on Constitutionality of H.R. 1249 – America Invents (NOT) Act

The House had their first ever debate last night (6/22/11) on the Constitutionality of a piece of legislation under the new rules requiring the House specifically address the Constitutionality of legislation.  The major supporter for the Constitutionality of America Invents Act was Lamar Smith, Republican fromTexasand the major Congresswoman challenging the Constitutionality was Marcy Kaptur, Democrat fromOhio.  Kaptur pointed out that the first right ever mentioned in the Constitution, even before the Bill of Rights, was the exclusive right of inventors and authors to their writings and discoveries – Article 1, Section 8, clause 8.  Representative Kaptur pointed out that the Constitution protects the rights of inventors, not the first person to file for a patent.  The proponents of the Bill have pushed the nonsensical idea that the Bill awards patents to the “first inventor to file.”  There is no such thing as the “first inventor to file.”  Only one person or group can be an inventor, the other people are just clever engineers.  For instance, if I recreated calculus without any apparent training in calculus, that would not make me the discover of calculus, it would just make me clever at math.  Kaptur points out that the inventor has an inchoate right to a patent upon reducing an invention to practice.  The first person to file, even if they recreate the invention, does not have an inchoate right.

Congresswoman Kaptur correctly pointed out that the Bill will institutionalize intellectual property theft.  She explained that this Bill is about Europeanizing our patent laws.  She predicted that if this legislation passes it will be tied up in the courts for years, because of its unconstitutionality.  This uncertainty will hurt inventors and the American economy.

Congressman James Sensebrenner of Wisconsinpointed out that a vote for this Bill is a clear violation of every Congressman’s oath to uphold and defend the Constitution.  He points out that patents are a property right and H.R. 1249 is a clear violation of the 5th Amendment.  The relevant part of the 5th Amendment states “or shall private property be taken for public use, without just compensation.”  The Bill will take the private property of inventors without compensating them and give it to the first person who files a patent application.  Congressman Sensebrenner and many of the opponents of the legislation pointed to the recent Supreme Court case Stanford v. Roche, which clearly stated that a foundation ofU.S. patent law is that the first true inventor is entitled to a patent.  Sensebrenner made the point that inventor means the first person to create an invention, not the person who files first or the second or later person to recreate the invention.

Congressman Lee Terry of Nebraska also brought up the difference between inventors and filers and pointed to the Stanford v. Roche case.

Congressman Scott Garrett of New Jerseypointed out that the purpose of Government is to secure our Natural Rights – See the Declaration of Independence.  He pointed out that only the first true inventor is the creator of the invention and creation is the source of all property rights.  This is a straightforward application of Natural Rights.

Congressman Dana Rohrabacher ofCaliforniapointed out that the clear purpose of this legislation is to weaken our patent rights.  TheUnited Stateshas had the strongest patent rights for INVENTORS since the Constitution was passed.  This is why theU.S.became the economic and technological leader of the world is less than sixty years.  He also pointed out that this legislation is designed to HARMonize our patent laws with other countries to the detriment of the United States.

Proponents of the Bill spoke about patents being monopolies and talked about the supposed problem of run away litigation.  Patent are property rights not monopolies.  People who label patents monopolies are people who do not understand property rights and are pushing a statist agenda.  Judge Michel, former head of the Court of Appeals for the Federal Circuit, the court that hears all patent appeals in the country, has definitely demolished the myth of rampant patent litigation.  He has pointed out that only about 100 patent cases go to trial each year.  In a $14 trillion economy built on new technology this is trivial.  A familiar theme among the proponents was their support for the Wall Street give away of not having to pay for stealing other peoples’ technology.  For more information see Patent Reform a Sham: Data Treasury Story Exposes True Motives.

If this Bill passes theUnited Statesstandard of living will decline precipitously in the next decade.  I predict that our standard of living will be on par withGreeceandPortugalby 2020.

June 22, 2011 Posted by | -Law, Patents | , , , , , , , , , , , , | 3 Comments

Congressman Rohrabacher’s Office Expects Vote on America Invents Act (H.R. 1249) on Thursday

We spoke with Congressman Dana Rohrabacher’s office Wednesday night (6/22/11) and they said that they expected a vote on H.R. 1249 on Thursday (6/23/11).  Congressman Rohrabacher has been a courageous, principled opponent of this Bill.  Other groups are reporting that the vote will be Friday or may be delayed.  Let’s hope for delay, because I doubt the supporters will bring this Bill to a vote unless they believe they can win.

June 22, 2011 Posted by | Patents | , , | Leave a comment


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