State of Innovation

Patents and Innovation Economics

Inventing to Nowhere: The Movie

This documentary explains how the United States is destroying its Patent System that has been the engine on which America’s technological and economic leadership has been built.  The movie can be seen in a number of cities on December 15.


Invention is as old as human existence, and no country has promoted and thrived on invention more than the United States thanks to its patent system. But is American invention at risk?

Framed around the story of two first-time inventors, Inventing to Nowhere explores the stakes in policy fights over the American innovation economy, with interviews of legendary inventor Dean Kamen, historians, members of Congress and other key players in the effort to keep the country innovating.

For more than 200 years, the U.S. patent system has helped protect and grow ideas. This reverence for intellectual property rights has been a driving force in making the United States an economic superpower. But as the patent-law debate becomes more influenced by special interests, the future of inventors and entrepreneurs is in jeopardy.

December 12, 2014 Posted by | News | , | Leave a comment

One Year Anniversary of Patent Reform: Two Reasons Why it is Un-Constitutional

A year ago the pork laden so called Patent Reform bill known as the America Invents Act (AIA) was enacted.

First to File Provision: 

Article 1, Section 8, Clause 8 of the Constitution states:

To 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.

The Constitution does not give Congress the authority to grant patents to the first person to file and doing so violates the exclusive Rights of inventors.  The proponents of the AIA argue that it is really a First Inventor to File system, not a first to file system.  This is nonsense.  There is no such thing as being the second or third or ninth inventor.  An inventor is the first one to create something.  For more information see Lawsuit Challenges AIA’s Constitutionality.

Fee Setting Authority: 

Article 1, Section 7, Clause 1 states.

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.

The AIA gives the US Patent and Trademark Office (USPTO) fee setting authority.  However, the part of the AIA that made sure that USPTO would be able to keep all its fees was removed by Representative Paul Ryan.  Since it is very unlikely that the USPTO will keep all its fees, they are creating a bill for raising Revenue.

September 18, 2012 Posted by | -Law, Patents | , , , , | Leave a comment

My Book: The Decline and Fall of the American Entrepreneur Now Available on Kindle

The The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation , is now available in Kindle format for only $7.99.

Book Highlights:

*New US laws since 2000 are killing US Innovation

*Explains why the venture capital model is dying.

*Innovation is key to creating high quality jobs

*Innovation is key to increasing real per capita incomes of Americans

*How to make the US the innovation leader of the world again


What others are saying about the book

Mr. Halling combines two topics — the impediments to entrepreneurship that have been created by the U.S. government as an unintended consequence of its pursuit of other goals and the systemic weakening of the U.S. patent system by the U.S. Supreme Court and the Congress.

The resulting technological stagnation is a major reason the U.S. has gone from producing 25 percent of the World’s Gross Product in the mid 1990s to about 20 percent today. The loss is significant – about $3 trillion of U.S. GDP in 2009 alone.

He demonstrates in clear terms the linkages between economic growth, productivity, and income. And he lays out how technological advancement has always been the American advantage in global competition, an advantage that the U.S. is squandering.

Dr. Pat Choate, economist, former Vice Presidential running mate of Ross Perot 1996, Director of the Manufacturing Policy Institute, Phd. Economics University of Oklahoma


“Dale Halling’s Decline and Fall of the American Entrepreneur makes a compelling case for the need to reform regulatory and other policies that hamstring entrepreneurial innovation in our country. Everyone concerned about the decline in American innovation should read this book.”

David Kline, Coauthor of “Rembrandts in the Attic” and “Burning the Ships”

The Decline and Fall of the American Entrepreneur presents the issues facing technology start-up companies in today’s environment.  The book sheds light on the underpinnings of these issues and is enthralling.  Halling’s tight, accessible and personal style make this a fast and compelling read.  His book is a political clarion call that should be heard now.

Greg Jones, Former President Ramtron International (RMTR) and CEO Symetrix Corporation.  Both companies founded on IP.

This book conclusively establishes the link between innovation and per capita income, and shows that we have recently entered into a time in which innovation is under assault.  This assault has resulted in a predictable loss of income and contributed significantly to the economic woes we are experiencing right now.  The book’s sound policy recommendations suggest a way to turn the economic ship around to set a course for a return to prosperity.

Peter Meza,Patent Attorney – Counsel Hogan & Hartson, Attorney for Alappat –  In re Alappat


October 4, 2011 Posted by | Innovation | , , , , , , , , , | Leave a comment

Forbes Explains How America Invents Act will Hurt Tech Entrepreneurs

This excellent article shows that when Canada changed from a first-to-invent system to a first-to-file system, it was bad for individual inventors, technology start-ups, and Canadian venture capital.  The article then quotes a UK study showing how the European system is not encouraging innovation.  The article notes that the America Invents Act will effectively eliminate the one year grace period for inventors, which is particularly important for startups.  The new post grant review will allow large companies to tie up entrepreneurial companies in expensive litigation for years.  The post grant procedure has been used effectively in Europe to stifle startup competitors by large companies.  Unfortunately, one of the supposed benefits of the Act was to stop fee diversion.  The Patent Office is completely funded by user fees and Congress has taken (stolen) these fees to support other Congressional pet projects.  The result of fee diversion is that it now takes four or more years on average for a patent to issue.  This pendency time results in the patent often issuing long after the commercial opportunity has passed the company by.  If it took 3 to 4 years to obtain title to your car or house after you bought it, you would think you were living in a third world country.  However, this is what happens in the patent world everyday and the America Invents Act does not solve this problem.  The author concludes that Congress should be careful that the America Invents Act not become the equivalent of Sarbanes Oxley.

This article was written by Gary Lauder is Managing Director of Lauder Partners, a Silicon Valley-based venture capitalist and co-inventor of a dozen patents. More info on this issue can be found on his Web site.


September 21, 2011 Posted by | -Law, Patents | , , , , | 8 Comments

What Would Real Patent Reform Look Like?

I have written a number of times on what real patent reform would actually accomplish.  One of the major problems with our patent system is that your rights stop at the border.  This is different than any other property right.  For instance, if I drive my car across the border into Canada, I still own my car.  If I drive my book across the border into Canada I still own both the physical version of my book and the copyrights to my book.  But, if I drive my invention across the border I no longer own my invention.  This situation existed for copyrights 150 years ago and it was recognized that there was no logical reason for copyrights to end at a countries border and it discouraged the publication of domestic authors.  The same is true of patents.

I suggest a system of reciprocity in which an inventor who obtains a patent in Canada, for example, has patent rights in the U.S. and vice versa.  This would decrease the duplication of efforts across patent offices around the world and significantly reducing the present backlog in the U.S. patent office.  More importantly, it would increase the value of a patent and increase the chance of obtaining funding for technology startups.

A friend of mine, Jim Lauffenburger, explains in practical terms why this important.  His company has found trade secrets to be a much more useful tool, because of the lack of patent reciprocity.

It is interesting that in my company, EM Microelectronics, the best method for protection is definitely keeping a secret, not filing for patent protection. (And keeping those secrets is extremely challenging and difficult.)

Why, you ask?
Because we are unable to enforce patent protection in Asia, and unable to prevent literal copying.

We spend man-decades of highly skilled (and expensive) engineering time to design a new IC. The IC goes into mass production in some successful product. It gets rapidly reverse engineered in Asia. Nearly direct copies of the part soon appear, and can be priced at only silicon-cost, without the huge development costs.

We visited several of these Asian “design centers” to ask them how they do it, under the guise of possibly utilizing their services. But even that guise was not really necessary, because they were proud of their “design method”: They do a layer-by-layer stripping and micro-photographs, and create a direct schematic from that. They convert the digital logic into standard cells, and then re-Place-and-Route using “their own IP” (the standard cells). For the analog portions, they use the layers as-is, but rotate or flip them 90 degrees so that it looks different. Then end result is what they claim is their own IC and their own IP, and it looks quite a bit different from our ICs. But, during that entire process they were simply “turning the copy crank”; not actually designing anything from concept.

Fighting this copying at a trademark level won’t work (it looks different). Fighting this at a patent level is extremely time consuming and expensive.

Thus, the only way to fight it is to try to hide features and make very special implementations that don’t work correctly in a layer-by-layer copy. (This of course, is very difficult, and expensive, and MUST be kept fully secret.)

This shows (to me) once again, that most of our law (and society) only works if the we all generally agree on the moral and ethical basis undergirding our actions and laws. Once that is lost, chaos follows. (And “messes get created” by all the reams of laws generated to try to make up for the lost ethical basis.)

While Jim’s company has made a logical decision under the present law, part of the reason for having a patent system is to encourage the spread of technical information.  Trade secrets inhibit this dissemination of technical information and slow down technological and economic progress.  The America Invents Act does nothing to solve this problem.


September 8, 2011 Posted by | News, Patents | , , , , | 1 Comment

Another Reason to Be Suspicious of the America Invents Act

Gametimeip makes an interesting point about the America Invents Act:

The sheer size of the bill (150 pages) is massive compared to other legislation, such as the original patent act (9 pages), the Civil Rights act of 1963 (28 pages), and the National Labor Relations Act of 1935 (9 pages).

Paraphrasing Mark Twain: Congress did not have time to write a short, good piece of legislation, so they wrote long, bad piece of special interest legislation.  This is beginning to be quite a trend in Congress.  Write massive pieces of legislation that even the legislators do not read before voting on them.  No wonder our economy is in a depression.


September 6, 2011 Posted by | Patents | , , | 2 Comments

8 Millionth U.S. Patent Issues

According to the USPTO website, 8,000,000 patent issued today, August 16, 2011.  The patent is entitled “Visual Prosthesis” and the inventors are Greenberg, Robert J. (Los Angeles, CA, US), Mcclure, Kelly H. (Simi Valley, CA, US), Roy, Arup (Valencia, CA, US).  The patent is assigned to Second Sight Medical Products Inc.  The patent took almost four years from filing, October 18, 2007, until issuance.  Hopefully, this company did not need this patent to secure funding, which is common.  This illustrates one of the major problems with our patent system – namely the absurd length of time it takes to get a patent issued.  A patent is a property right and if it took you four years to obtain title to a car or house or stock you bought you would think you were living in a third world country.

According to the Patent Office’s press release the patent explains:

In a healthy eye, the photoreceptors (rods and cones) on the retina convert light into tiny electrochemical impulses that are sent through the optic nerve and into the brain, where they are decoded into images.  If the photoreceptors no longer function correctly, the first step in this process is disrupted and the visual system cannot transform light into images, causing blindness.

The system awarded patent number 8,000,000 is designed to bypass the damaged photoreceptors altogether.  A miniature video camera housed in the patient’s glasses sends information to a small computer worn by the patient where it is processed and transformed into instructions transmitted wirelessly to a receiver in an implanted stimulator.  The signals are then sent to an electrode array, attached to the retina, which emits small pulses of electricity.  These electrical pulses are intended to bypass the damaged photoreceptors and stimulate the retina’s remaining cells to transmit the visual information along the optic nerve to the brain.

Of course, I am sure that the patent critics will complain that this patent is an example of how the Patent Office issues bad, overly broad, patents for inventions that were created years ago.  This is clearly obvious in light of modern electronics and an understanding that the brain is really just electrically signals.  What is unique about converting light signals into electrical signals anyway?  It really all boils down to wiggling electrons, which has been done since man first harnessed fire.  I am sure that the critics will point out how this patent does not encourage innovation and is just legal title to sue and waste resources that would be better spent on engineers????????????????????????????????


August 16, 2011 Posted by | News | , , , , , | 6 Comments

IPBiz on Mark Cuban’s Comments on Patents

Mark Cuban, owner of the Dallas Mavericks, has been weighing in on patents and patent deform (America Invents Act).  Lawrence Ebert, who writes IPBiz, has an excellent analysis entitled, Mark Cuban on patent law: who wants to make lawyers happy anyway ?.  According to IPBiz, Cuban argues

Pick any country that is currently doing well, China is a perfect example. In China the Intellectual Property Laws are so weak that someone thought it was a good idea to completely replicate Apple retail stores. Compare their economy to ours. As much as I hate to compare other economies to ours, it’s worth taking a look .

Ebert’s  response is right on: S

Sure, free riders can have a great run, up to the point that they run out of creators to steal from.

Mark Cuban made his money being reseller of software.  He has no experience in trying to create an invention and then market the invention and then have another person steal your inventive effort.  Mr. Cuban might feel different if I broadcast his Dallas Mavericks without paying him a licensing fee.  Intellectually and morally it would be exactly the same position and think of all the money I would make.


August 15, 2011 Posted by | Patents | , , , , , | 6 Comments


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