State of Innovation

Patents and Innovation Economics

America Invents Act Passes 89-9

According to IPwatchdog, the bill passed without any amendments.  This means there is no meaningful protection that the Patent Office will receive all its user fees.  The director of the Patent Office, David Kappos, had the chance to ask Congress for a bill that just ensured full funding for the Office only, but instead he fought for the full bill wanted by his former employer – IBM.  What we got instead was one of the biggest job killing, innovation killing, pieces of legislation since Smoot Hawley bill that does not assure full funding for the Patent Office.

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September 8, 2011 - Posted by | News, Patents |

5 Comments »

  1. The Director of the Patent Office David Kappos being a former IBM Vice President supporting legislation that favors IBM sounds just like Paulson who ran Goldman Sachs becoming Treasury Secretary and then using that position to help out his buddies.

    Reagan in his first inaugural said, “Government is not the answer to our problem; government is the problem,” So now we can’t get enough of private sector guys coming in to run the government thinking that’s going solve our problems. It’s a stress reliever for our politicians who don’t want to take responsibility for anything and use the excuse that they relied on the experts.

    Government is the problem? We don’t stop to think that in a government of the people, by the people…, all these ideas we don’t like are coming from the people in the first place. The government is simply the arena where competing ideas do battle. Better a cold war than a hot war. Government is a nation’s civil cold war. It’s not your mommy, it’s not your daddy, it’s your cold war with your neighbor.

    With the passing of the America Invent Acts which favors Large Corporations who send all the jobs they can to cheaper over seas job markets, and disfavors small businesses that employ most of the country; it seems we can’t get enough of meltdowns in this country. Financial industry meltdown, housing industry meltdown, IPO meltdown, and now we decide to hinder the new wealth generating ability of the largest segment of the inventing population.

    Comment by Matthew Artero | September 9, 2011 | Reply

  2. Matthew,

    The America Invents (not) Act illustrates your point so well that government has just become a cold civil war of competing interests. The idea of individual rights (light, liberty, and the pursuit of happiness/property) are just so old fashion. Of course, government as a cold civil war is the way governments had always been until the American Revolution, so which idea is really new?

    Comment by dbhalling | September 9, 2011 | Reply

  3. dbhalling,

    I don’t know if we can say “until the American Revolution” because the War of the Regulation is said to be a catalyst to the Revolution which was soon followed by Shays’ Rebellion, the Whiskey Rebellion, and Fries’ Rebellion. We just got fighting in our blood. If we are to judge by our history it seems un-American not to fight.

    People look at all the good in our country today and the “Founding Fathers” are glorified and idolized as if they had all this figured out and are the one’s that established how good we have it today. The truth is every little bit of it was fought for along the way. The end of slavery, women’s rights, worker’s safety, end of child labor in coal mines, you name it, it was fought for.

    My point is that when you come up with an abstract idea to represent the enemy or the cause that is being fought for, it makes it easy to gain support. Ronald Reagan saying government is the enemy, and calling this legislation The America Invents Act are examples of that. The Patriot Act giving the government the power to secretly arrest people and hold them indefinitely while the family wonders what happened to their provider is another good example.

    Idolizing the American Revolution as establishing light, liberty, and the pursuit of happiness/property is also another example. Can we really say that since some of the first order of business of the new government was to create a strong army to limit the freedoms of its people?

    People were complaining about how they were drafted into the Revolutionary War without pay and had to feed and support themselves. Then after the war their property was confiscated to pay debts and taxes. Sounds just like ancient Rome. Reminds me of the saying “the more things change the more they stay the same”. Perhaps all the American Revolution really did was change who is in charge.

    “Americanism” and “security” were the buzzwords during the red scare and McCarthyism. We had the House Committee on Un-American Activities, the Senate Internal Security Subcommittee, Loyalty-security reviews, and the McCarran Internal Security Act.

    Most don’t understand that by dealing in abstracts, understanding is reduced and with reduced understanding comes reduced power. We then end up in a propaganda war instead of identifying whose interest is at stake and what the result will be.

    I think it would be great if there was a rule or law that stated you can’t give a bill a name that promotes it like propaganda. Appraisers and analysts determine the value of property all the time. We can determine if a bill truly does what people claim. I think it would be great if there was also a rule that required that all competing interests must be identified and the value of each to the country as a whole must be measured. Maybe in my great grandchildren’s time.

    But understanding that it is a propaganda war is crucial. People respond most strongly to fear and hope. Figure out which emotion is going to cause you to win or the other side to lose and crank it up.

    The America Invents Act passed because people need hope in this bad economy and the supporters offered that. They played on people’s economic fears and offered them hope of a better future.

    In learning from your valiant effort in fighting this legislation Mr. Halling, I would say there is also a need to discredit the other side in order to make people fearful of them. I wish I had thought of branding Kappos as the current Paulson earlier.

    I wonder what metrics we can measure before and after the passage of this legislation in order to identify the results of this new law. We can always hope for a repeal. It wouldn’t be the first. I wonder what the average time of a repeal is. Of course the Red Scare ended fairly quickly after McCarthy lost credibility and was censured by the Senate.

    It was easy to visibly see the harm of McCarthyism. I wonder how visible the harm of this new law will be.

    In hindsight I think a direct frontal attack of using the word “not” to create the opposite meaning was too dificult an approach. It also creates a very nagative feeling in how Americans are described. Probably very dificult for a politician to work that angle. Maybe something like America Invents for its Corporate Masters Act would have been easier for politicians to get behind. And right now with all the scandals with deregulation and bailouts, large corporations medling in government policy are not looked at favorably.

    Another hindsight thought I have is that calling it the America Invents NOT Act is too dificult to support. America will still invent, after all the Russians did beat us into orbit, it’s the profiting from the invention that is in question.

    This is definately a story/experiment worth observing and learning from as the results take shape.

    Comment by Matthew Artero | September 11, 2011 | Reply

  4. Matthew,

    A lot of ideas there. I will only respond to a couple of them.

    I think the most important metrics are the number of patent issued to individual inventors and startups and the number of patent applications filed by individual inventors and startups. A study was undertaken along these lines after Canada switched from a first-to-invent to a first-to-file system. The study clearly shows that the number of patents/applications by individual inventors and startups fell significantly. It also stated that the total number of patents filed stayed about the same. The difference was made up by large foreign companies filing in Canada. Finally, they also stated that it failed to spur innovation.

    The Russians (USSR) did not invent, they stole technology. Their whole space program was built on the theft of German and then US technology. Yes, the US will invent, but at such a slow rate that our technological leadership will vanish in our expected lifetime as will our economic leadership. Our new patent system will be the worst of our historical system with the worst of the European system. The whole world will suffer from our stupidity. It is one thing for France or Canada or even Japan to adopt a stupid patent system, it is a whole other story when it is the US. When the US does not lead the world with new technologies, there is no other country to fill the gap. We might hope that the Chinese or Indians will fill the gap, but their present history is of stealing (adopting) US developed technology and manufacturing products around this technology. As our technological leadership flounders, it puts both the global economy and global stability at risk.

    Comment by dbhalling | September 11, 2011 | Reply

  5. Thanks for those great insights and facts.

    Comment by Matthew Artero | September 15, 2011 | Reply


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