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Posts Tagged ‘America Invents Act’


Atlas Shrugged (Ayn Rand) on Patents/Inventions

There has been a lot of confusion about Ayn Rand’s position on patents and intellectual property among her fans.  I have written about this before in Ayn Rand on Intellectual Property.  However, I thought it might be interesting to catalog every case where patents and inventions are mentioned in Atlas Shrugged for people researching this issue and to further illuminate Rand’s position on patents.  The references are to the Kindle edition of Atlas Shrugged, which unfortunately has a large number of typos.

There are three main inventions in Atlas Shrugged, Rearden metal, the static electric motor, and the sonic destruction ray (aka Project X).  The story is intimately woven around these three inventions.

Below are the quotes (bolded) and context where necessary with my commentary.

1) Location 5796-5802  ”…’he didn’t invent smelting and chemistry and air compression.  He couldn’t have invented HIS metal but for thousands and thousands of other people. HIS Metal! Why does he think it’s his? Why does he think it’s his invention?  Everybody uses the work of everybody else.  Nobody ever invents anything.’ (Jim Taggart) She (Jim Taggart’s Wife) said, puzzled, ‘But the iron ore and all those other things were there all the time.  Why didn’t anybody else make that Metal, but Mr. Rearden did?’”

Rand anticipates Open Source socialists.  This idea that no one invents anything is the standard argument of collectivists, but it does not stand up to scrutiny.  Why has inventing been concentrated in the last two centuries in relatively small populations of the U.S. and western countries?

2) James Taggart angry about Rearden’s success

location 5832-      “‘…And Dr. Pritchett, the old fool, is going around saying that he knows Rearden didn’t invent that Metal- because he was told, by an unnamed reliable source, that Rearden stole the formula from a penniless inventor whom he murdered!”

This anticipates the defense of every infringer.

3) location 5808-5810 “I’m not sure it was so great-inventing this new Metal, when so many nations are in  need of plain iron-why do you know the People’s State of China hasn’t even got enough nails to put wooden roofs over peoples’ heads?”

Fast track for green tech at the PTO – Why, except for politics, are so-called green tech inventions more important than other inventions?

4) location 5812-5822     “No sensitive person these days-when there’s so much suffering around us- would devote 10 years of his life to splashing about with a lot of trick metals.  You think it’s great?  Well, it’s not any kind of superior ability, but just a hide that you couldn’t pierce if you poured a ton of his own steel over his head!  There are many people of much greater ability in the world, but you don’t read about them in headlines and you don’t run to gape at them at grade crossings-because they can’t invent non-collapsible bridges at a time when the suffering of mankind weighs on their spirit!”

5)  location 5827 “The country gave Rearden that Metal, now we expect him to give the country something in return.”

Dr. Ferris, State Science Institute response on the Bill Directive 10-289

6) location7042-7046 ” ‘Did you hire any research men of your own?’ ‘ Yes, yes, some- but let me tell you, I didn’t have much money to spend on such things as laboratories, when I never had enough funds to give me a breathing spell.  I couldn’t even pay the bills I owed for the absolutely essential modernizing and redecorating which I had to do- that factory was disgracefully old-fashioned from the standpoint of human efficiency…’”

Lee Hunsaker, owner of 20th Century Motor Co. after a lawsuit forced Midas Mulligan to sell, and then Mulligan Galted

Our accounting rules don’t value inventions.  No accounting system shows any return for an invention.  I and other have written about how our accounting rules inhibits investment in the inventing process.  See Accounting Inhibits R&D http://hallingblog.com/accounting-inhibits-rd/

7) location 7111 “Our aim was not to produce gadgets, but to do good.”

Sounds like President Obama or President Bush’s 1000 points of light.

8)  location 7126 ” Don’t you know any words but ‘engineer’?”

Ivy Starnes, sister of Gerald Starnes, last owners of 20th Century Motors, on their “great plan” to change the factory that caused its failure and response to Dagny’s urgency for the names of the engineers working on the revolutionary motor

Do we value our engineers? Sales people and marketing managers are compensated more than corporate inventors/engineers.  Perhaps this is related to our dysfunctional accounting systems.

9)  location 7300-7302 “‘The secret you are trying to solve involves something greater-much greater-than the invention of a motor run by atmospheric electricity.  There is only one helpful suggestion that I can give you: By the essence and nature of existence, contradictions cannot exist.’”

Dr. Akston, professor of philosophy, speaking to Dagny about why people have Galted

10) location 196 “Anyway, this should be my lead for the character of John Galt.  He, too, is a combination of an abstract philosopher and a practical inventor; the thinker and the man of action together…”

Ayn Rand, forward to Atlas Shrugged

Iillustrating the fallacy of the “tinker-er, mad professor/inventor”

11) Location 152-154 “ [ Galt represents]…For Dagny, the ideal. The answer to her two quests: the man of genius…is expressed in the search for the inventor of the engine.”

Forward to Atlas Shrugged

12) Location 3758- 3763   “He [Rearden] had devised a new type of truss. It had never been made before and could not be made except with members that had the strength and lightness of Rearden Metal.  ‘Hank,’ she [Dagny] asked, ‘did you invent this in two days?’  ‘Hell, no. I “invented” it long before I had Rearden Metal.  I figured it out while making steel for bridges.  I wanted a metal with which one would be able to do this, among other things.’”

Dagny asking Hank about the invention of his new bridge truss

An illustration of advanced inventing: what could I do if…  I have written on this process before, see How to Build a Patent Portfolio that Dominates Your Market Place http://hallingblog.com/how-to-build-a-patent-portfolio-that-dominates-your-marketplace/

Evolutionary vs. revolutionary technologies: how one invention opens up myriad new inventions. This passage illustrates that each invention can open up the possibility of more inventions and there is no finite number of inventions to be created.

13) Location 6377   Hank and Dagny find motor

14) Location 7777-7780  “’ A man with the genius of a great scientist, who chose to be a commercial inventor?  I find it outrageous.  He wanted a motor, and he quietly performed a major revolution in the science of energy, just as a means to an end, and he didn’t bother to publish his findings, but went right on making his motor.  He did he want to waste his mind on practical appliances?’ ‘Perhaps because he liked living on this earth,’ she [Dagny] said involuntarily.”

Dr. Stadler speaking with Dagny

France vs England at the beginning of Industrial Rev.  France was just as advanced in science, if not more so, however, their scientists didn’t work on practical applications or with practical inventors.  Only those admitted to the French Academy of Sciences were considered worthy – there was a stiff hierarchy.  In England, practical inventors interfaced with the scientific community aided by a patent law that did not care (as much) if the inventor came from the Academic Community.  For more information see The Most Powerful Idea in the World http://www.amazon.com/Most-Powerful-Idea-World-Invention/dp/1400067057.

15) Location 8968-8972 “Then is money made by the man who invents a motor at the expense of those who did not invent it?  Is money made by the intelligent at the expense of fools?…Money rests on the axiom that every man is the owner of his mind and his effort…”

Francisco d’Anconia response to Money is the root of all evil

Anticipating the absurd arguments of Von Mises economists who want to use the inventions without paying the creator

Man’s mind is the key factor in production for humankind

15) Location11722- 11724     “Point Three.  All patents and copyrights pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of gift certificates to be signed voluntarily by the owners of such patents…the Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices…”

Directive 10-289

Rand anticipated the nonsense of considering patents a monopoly.

This anticipates the actions of the Bush administration’s response to the anthrax scare: threatening a drug company to lower their prices on the antidote, or they would compulsory allow other companies to manufacture

It also anticipates Obama proposal to reduce the length of pharma’s patents to 7 years

And anticipates Liberals demanding that the drug companies reduce their costs for elderly, poor, and 3rd world.  Most countries already have made use of these compulsory measures, which leads to higher costs in the US where the inventions originate.

This illustrates people’s lack of understanding about the importance of property rights

16) location 11729  “Point Four. No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive.   The Office of Patents and Copyrights is hereby suspended.”

Sounds like the failure to fully fund the PTO and

Dudas’ irrational rationing of issuances of new patents

17) Location 11765  “A man’s brain is a social product.  A sum of the influences that he’s picked up from those around him.  Nobody invents anything, he merely reflects what’s floating in the social atmosphere…”

Dr. Ferris’s view there is no such thing as genius

Of course this begs the question, why are the majority of inventors in this world concentrated in so few countries?

18) Location 11817  “ We won’t have to worry about new inventions upsetting the market”

Explains why large multi-nationals want to pass the America invents act- to stifle disruptive competition

19) 11839  “There’s been enough invented already-enough for everyone’s comfort-why should they be allowed to go on inventing?”

You are either moving forward or moving backwards.  You cannot remain static. The reason why is in post Sustainability isn’t Sustainable http://hallingblog.com/sustainability-isn%E2%80%99t-sustainable/.

20) location13028   “…the boy had cared for nothing but his studies, not for sports or parties or girls, only for the vision of the things he was going to create as an inventor.”

Young genius commits suicide on eve of passage of Directive 10-289

21) Loc 11880  “…Taking over the patents is fine.  Nobody’s going to defend industrialists.  But I’m worried about taking over the copyrights. That’s going to antagonize the intellectuals.  It’s dangerous.  It’s a spiritual issue…”

Lawson responding to Mouch on impact of Directive

See the Copyright Term extension Act vs. America Invents Act- We are constantly weakening patent rights on one hand and strengthening copyrights.

This anticipates that Congress is always concerned about artists but could care less about inventors

22)  loc 15001”… Dwight Sanders? Where was the inventor of her motor?”

23) loc 15237   “…in whose arms? ‘ why the inventor of the motor.’ She gasped, closing her eyes; this was one connection she knew she should have made.”

24) Loc 15318 “The young inventor of the 20th century motor company is the one real version of the legend, isn’t it?”

Dagny on crashing into Galt Gulch

 

25) Loc 15587 “…I ask less of the men to whom I trade it for the things I need.  I add an extra span of time to their lives with every gallon of my oil that they burn.  And since they’re men like me, they keep inventing faster ways ways to make the things they make- so every one of them grants me an added minute, hour, or day with the bread I buy from them, with the clothes, the lumber, the metal…”

 

Wyatt on living in the Galt Gulch

This is a response to the whining about paying inventors or their patents stifling competition is nonsense, unless you want something for nothing

26) Loc 15777  “she was looking at the inventor of the motor, but what she saw was the easy, casual figure of a workman in his natural setting and function…”

 

Dagny observing Galt at work in the Gulch

 

27) Loc15989 “…no more than we consume for our immediate needs-with not a penny nor an inventive thought left over to harm the world.  It is evil to succeed, since success is made by the strong at the expense of the weak?”

 

Galt explaining to Dagny why they are on strike

 

28) Loc 16896 “that sacred fire which is said to burn within musicians and poets-what do they suppose moves an industrialist to defy the whole world for the sake of his new metal, the inventors of the airplane, the builders of railroads, the discoverers of new germs or new continents have done through all the ages?”

This demonstrates the absurd argument that artists are creative but inventors and scientists aren’t creative

 

29) Loc 17033  “…john intended to be an inventor, which meant that he was to be a physicist…”

 

Dr. Akston on the three brilliant students

 

30) Loc 17709  “…fraudulently solemn voice magnified by the microphone inventor’s ingenuity into the sound and power of a giant…”

Mouch getting ready to announce Directive 10-289.

 

31) Loc17745  “…Project X would not have been possible, this great invention will henceforth be known as the Thompson Harmonizer!”

 

32) Loc 17785  “..who invented that ghastly thing?”

Dr. Stadler talking to Dr. Ferris about the Thompson Harmonizer (Sonic Destruction Ray aka Project X)

33) Loc 17791  “’ what is the practical purpose of this invention?  What are the ‘epoch-making possibilities’?  ‘Oh, but don’t you see?  It is an invaluable instrument of public security.  No enemy would attack the possessor of such a weapon.”

 

Stadler asking Ferris about Project X, realizing it was his research that led to the invention

 

34) Loc17819   “…voice galloping across the continent with a description of the new invention…”

 

Dr. Ferris on Project X

 

35) Loc 17828 “This great invention was the product of the genius of a man whose devotion to the cause of humanity is not to be questioned…”

 

Wesley Mouch discussing Project X.

 

36 Loc 17836 “…the new invention was an instrument of social welfare, which guaranteed general prosperity… this invention, the product of dr. Robert Stadler…”

 

Announcer to the world on project x

 

37) Loc 17852 “…if people should misunderstand the nature of the new invention, they’re liable to vent their rage on all scientists.  Scientists have never been popular with the masses.”

 

Dr. Ferris talking about Project X

 

38) Loc 17853 “…this invention is a great, new instrument of peace…”

More on Project X

 

39) Loc 17875  “ Dr. Stadler could not believe it at first-that the new invention was to be greeted with particular gratitude by the mothers of the country.”

 

More on Project X

 

40) Loc 17956   “…fraudulent voices talking about some sort of new invention that was to bring some undefined benefits to some undefined public’s welfare.”

 

Dagny overhearing the broadcast

 

41) Loc 18603 “…he is the man who invented the motor we found…”

 

Dagny telling Hank that John Galt exists

 

42) Loc 19113 “wondering whether some invention of his own, some device of rays and lenses, permitted him to observe her every movement…”

Dagny wondering how Galt has followed her progress the past 10 years

 

43) Loc 19403 “They were both performing an expected routine, a routine invented by someone and imposed upon them, performing it in mockery, in hatred, in defiling parody on its inventors.”

 

Taggert with Lillian Rearden

 

44) Loc 20698 “…while you were combing the country for the inventor of my motor…”

 

Galt explaining to Dagny that he was working as a lineman for Taggert Transcontinental all this time

 

45) Loc 21962 “that the alleged short-cut to knowledge, which is faith, is only a short-circuit destroying the mind-that the acceptance of a mystical invention is a wish for the annihilation of existence and, properly, annihilates one’s consciousness.”

 

Galt radio speech

 

46) Loc 22391 “…you would not be able to fulfill or even to conceive your wishes.  You would not be able to desire the clothes that had not been made, the automobile that had not been invented, the money that had not been devised…”

Galt radio speech

 

47) Loc 22396 “just as your mystics of spirit invented their heaven in the image of our earth, omitting our existence, and promised you rewards…”

 

Galt radio speech

48) Loc 22454 “physical objects cannot act without causes. That his organs of perception are physical and have no volition, no power to invent or to distort, that the evidence they give him is an absolute, but that his mind must learn to understand it…”

 

Galt radio speech

 

49) Loc 22495 “a student reading a book understands it through a process of-blank-out.  A scientist working on an invention is engaged in the activity of-blank-out.” [how most  teachers explain the world]

Blank-out is Rand’s way of showing that people refuse to acknowledge the process of reason, of thinking

 

50) Loc22577 “You who have never grasped the nature of evil, you who describe them as ‘misguided idealists’-may the God you invented forgive you!”

Galt radio speech

 

51) Loc 22594 “…when I worked in your world, I was an inventor.  I was one of a profession that came last in human history and will be first to vanish on the way back to the sub-human. An inventor is a man who asks ‘Why?’ of the universe and lets nothing stand between the answer and his mind.

 

It is interesting that Rand points out that being an “inventor” was one of the last professions in human history.  Perhaps the first person to take on the profession of a being an inventor was Galileo, who lived in Venice.  Venice passed the first modern patent laws in 1474.  The U.S. has been the preeminent producer of people who made their living as inventors.  The America Invents Act is another step along the path of ensuring that no one will make a living as an inventor in the U.S. anymore.

 

In fact, whenever you see great periods of prosperity, you see large numbers of new inventions.  Whenever you see a lack of inventors inventing, you can be assured we are stagnating economically

 

52) Loc 22621 “…whether you would be able to invent a wheel, a lever, an induction coil, a generator, an electric tube,-then decide whether men of ability are exploiters who live by the fruit of YOUR labor…”

Galt radio speech

53) Loc 22631  “…dream of enslaving the material providers who are scientists, inventors, industrialists…”

Galt radio speech

54) Loc 22644 “…and to exile from the human race the hero, the thinker, the producer, the inventor…”

Galt radio speech

55) Loc 22875 “you failed to recognize the motor I invented-and it became, in your world, a pile of dead scrap.”

Shows nations and people are wealthy because of their mind-embodied by their inventions and technology-not their natural resources, labor and land.

56) Loc 22947 “…Nor will he give ten years of unswerving devotion to the task of inventing a new product… they will seize his rewards and his invention”

Galt radio speech

57) Loc 22958 “…for the work of the inventor who created the product which you spend your time on making, for the work of the scientist who discovered the laws that went into the making of that product…”

Galt radio speech

58) Loc 22974 “in proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns.  But the man who works as a janitor in the factory producing the invention, receives an enormous payment in proportion to the mental effort that his job requires of him.”

Hear, Hear

59) Loc 23002 “…they deliver their science to the service of death, to the only practical purpose it can ever have for looters: to inventing weapons of coercion and destruction.”

This is not about self-defense, it is about the policies we pursue that force us to spend so much time and talent and money on defense

60) loc 24304 “I’m Robert Stadler- he had thought-it’s my property, it came from my discoveries, they said it was I who invented it…”

Stadler on seizing Project X under his control and rule the country

61) Loc 24400 “’I invented it! I created it! I made it possible!’ ‘You did?  Well, many thanks, but we don’t need you any longer.  We’ve got our own mechanics.’ ‘Have you any idea what I had to know in order to make it possible?  You couldn’t think of a single tube of it!  Not a single bolt!’…’What claim do you have to it?’ Meigs patted his holster. ‘This.’”

 

 

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.

Summaries:

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:

http://www.reformaia.org/call

 

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: http://files.parsintl.com/eprints/23039.pdf
Magazine at: http://www.vcjnews.com/story.asp?sectioncode=32&storycode=5824547 (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: http://www.lauderpartners.com/PatentReform/HorrorsOfPatentReform.pdf
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” http://www.huffingtonpost.com/gary-lauder/patently-absurd-or-how-to_b_832703.html (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 http://journals.lww.com/medinnovbusiness/Fulltext/2010/06010/Venture_Capital___The_Buck_Stops_Where_.4.aspx

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

Audio only: https://s3.amazonaws.com/ai-video/aif11_179_lauder.mp3

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

http://www.youtube.com/watch?v=d2UWz_CkiqI

 

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

http://www.politico.com/news/stories/1109/29002.html

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

http://judiciary.senate.gov/pdf/09-03-10Kappostestimony.pdf

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.”

http://www.whitehouse.gov/21stcenturygov/actions/revolving-door

 

Why the “America Invents Act” is Bad for Startups and Bad for America by David Boundy (a patent attorney)

http://www.reformaia.org/news/why-”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

http://www.ip-watch.org/weblog/2011/07/14/interview-with-chief-judge-paul-r-michel-on-us-patent-reform/

 

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

http://www.rearden.com/public/110319_Patent_Reform_Isnt_1.pdf

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):

http://us2.campaign-archive1.com/?u=3341ca33e54ce6ceeeb33f5a4&id=5543db524f&e=e04d76df78

 

The problem with First-to-File (FTF) for start-ups as well-described by Senator Diane Feinstein:
YouTube (20 minutes): http://www.youtube.com/watch?v=xTWTpbIx4tE
Text of her speech: http://www.patentdocs.org/2011/03/senator-feinstein-opposes-the-first-to-file-provisions-of-s-23.html
Senator Cantwell’s speech in favor of the Feinstein Amendment (7 minutes): http://www.youtube.com/watch?v=cz8BjsTZ-lc&feature=related
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: http://www.scribd.com/doc/57945178/Letter-from-INCA-to-Rep-John-Boehner

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

http://www.burdlaw.com/blog/?p=96#comment-1450

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

http://works.bepress.com/cgi/viewcontent.cgi?filename=2&article=1057&context=rkatznelson&type=additional

 

Op-Ed against by Rep. Manzullo

http://washingtonexaminer.com/opinion/op-eds/2011/06/patent-reform-proposal-threatens-american-jobs

 

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

http://www.washingtonpost.com/capital_business/2011/03/25/AFzD9VkB_story.html

 

National Venture Capital Association position (against):

http://nvcatoday.nvca.org/index.php/policy/nvca-sends-letter-on-house-patent-reform-bill.html

 

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

http://www.patentlyo.com/patent/2011/07/guest-post-rein-in-the-big-bank-bail-out.html

Andrew Ross Sorkin/DealB%k: “In a Bill, Wall Street Shows Its Clout” 7/4/11

http://dealbook.nytimes.com/2011/07/04/in-a-bill-wall-street-shows-clout/
Jonathan Massey: Section 18 of H.R. 1249 Would Bail Out Banks and Expose the Treasury to Billion-Dollar Liability
http://www.scribd.com/doc/57945157/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

http://ipwatchdog.com/2011/07/10/torpedoing-patent-rights/id=18022/?

 

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

http://thehill.com/blogs/congress-blog/labor/170659-patently-unjust

 

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

http://en.wikipedia.org/wiki/America_Invents_Act

 

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

http://www.businesswire.com/news/home/20110621005690/en/Small-Business-Organizations-Urge-Substantial-Amendments-House

http://j.mp/SB-Objection

 

Several Universities Oppose Pending “Patent Reform” Legislation

http://chronicle.com/blogs/ticker/several-universities-oppose-pending-patent-reform-legislation/34091

Detailed letter from one of those universities:

http://www.warf.org/uploads/media/WARF__HR_1249_Disfavors_Innovators_06-01-11.pdf

 

Two former Chairs of the House Judiciary Committee

http://thehill.com/blogs/congress-blog/lawmaker-news/167549-patent-reform-is-long-overdue

 

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

http://www.lexology.com/library/detail.aspx?g=aa2f3083-8e03-422c-b7b3-e13e2e5a56cf

 

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

http://www.reformaia.org/resources/china

 

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

http://maplight.org/us-congress/bill/112-hr-1249/990582/total-contributions

http://maplight.org/us-congress/bill/112-s-23/897262/total-contributions

 

National Small Business Assoc. (NSBA) opposition:

http://www.nsba.biz/content/4012.shtml

 

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

http://www.ecommercetimes.com/rsstory/72680.html?wlc=1308294830

 

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

http://prestowitz.foreignpolicy.com/posts/2011/05/16/the_prevent_american_invention_act

 

Another overview article: Patent Reform Favors Corporations, Multinationals

http://www.theepochtimes.com/n2/index2.php?option=com_content&task=view&id=58714&pop=1&page=0&Itemid=1

 

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”

http://www.brookings.edu/opinions/2011/0627_patents_villasenor.aspx

 

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

http://bit.ly/Grace-Period-USA

How we got here: “Section 2 of America Invents Act: the undisclosed story of legislative obfuscation”:
http://works.bepress.com/cgi/viewcontent.cgi?filename=1&article=1057&context=rkatznelson&type=additional&sei-redir=1

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:

http://journals.lww.com/medinnovbusiness/Fulltext/2010/06010/

(I wrote one article in it)

 

URL’s are self-explanatory:

http://gametimeip.com/2011/03/04/can-we-have-an-intellectually-honest-patent-reform-debate-in-the-house/

http://gametimeip.com/2011/04/07/patent-reform-boosters-invent-facts-to-combat-real-arguments/

http://gametimeip.com/2011/05/30/america-invents-act-un-american-patent-reform/

http://www.patentlyo.com/files/the-big-government-patent-bill.pdf

 

Hoover Institution:  6/7-13/11

The Perils of Patent Reform http://www.hoover.org/publications/defining-ideas/article/81446

Welcome to Patent Purgatory http://www.hoover.org/publications/defining-ideas/article/81626

Patent Reform Goes Haywire http://www.hoover.org/publications/defining-ideas/article/81961

File First, Invent Later? http://www.hoover.org/publications/defining-ideas/article/82096
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:http://www.nytimes.com/2008/01/13/business/13stream.html?pagewanted=print

Other relevant info on bill:

http://www.opencongress.org/bill/112-h1249

 

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:

http://pub.bna.com/ptcj/HR1249CRSJun30.pdf

http://www.bna.com/crs-updates-report-n12884902369/

John Thomas’s long association with IBM:

http://www.google.com/search?client=safari&rls=en&q=%22Thomas,+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):

http://wikileaks.org/wiki/CRS-RL31132

http://assets.opencrs.com/rpts/RL31132_20010831.pdf

 

Unfortunate Statement of Administration Policy

http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/112/saphr1249r_20110621.pdf

 

Bill itself: http://pub.bna.com/ptcj/HR1249VotedJun23.pdf

The bill’s Grace Period language is quite confusing. Compare the bill section 102 (p. 5-9) with the existing Grace Period law:
http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_102.htm

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:
http://works.bepress.com/cgi/viewcontent.cgi?filename=1&article=1057

 

Web sites against:

http://www.noonhr1249.org/ (Links to excellent articles on the bill’s constitutional problems)

http://www.reformaia.org/

http://www.patentreformact.org/

http://sanepatentreform.org/

http://inventionsarejobs.org/

http://www.inventsact.org/

http://truereform.piausa.org/
http://inventorsvoice.com/

 

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

http://www.kauffman.org

 

The Small Business Administration

http://www.sba.gov/about-sba

 

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.

DVD: http://www.amazon.com/Flash-Genius-Greg-Kinnear/dp/B001LM64S8/

iTunes: http://itunes.apple.com/us/movie/flash-of-genius/id300387673

Amazon Instant Video: http://www.amazon.com/Flash-of-Genius/dp/B001O514F0/

Roger Ebert review (3 stars our of 4): http://rogerebert.suntimes.com/apps/pbcs.dll/article?AID=/20081002/REVIEWS/810020303/1023

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

http://www.amazon.com/Flash-Genius-Other-Stories-Invention/dp/B003R4ZHTK/

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

http://www.newyorker.com/archive/1993/01/11/1993_01_11_038_TNY_CARDS_000363341?printable=true

 

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

http://www.reformaia.org/call

 

Thanks,

 

-Gary

 

 
Halling to Appear on Ed Jones Radio Show

Dale B. Halling will be discussing the America Invents Act (H.R. 1249 & S. 23) on the Ed Jones Show on 740 KVOR .  The show runs from 7:00AM (MDT) to 8:00AM on July 2nd.  Here is the audio of the show in two parts 1edjones and 2edjones

 
Mayo Clinic’s Invention Theft Strategy

Mayo clinic’s management is pursuing a business strategy of efficient infringement – more commonly known as theft of other people’s inventions.  This immoral course of action is exemplified by Mayo’s involvement in the frivolous patent lawsuit Mayo v. Prometheus and Mayo researcher’s intellectual support for ACLU, Mayo et al. v. Myriad and in their support, through their lobbying organizations, for the America Invents Act (H.R. 1249 & S.23). The Act is nothing but a power grab by large multinational companies to steal the inventions of individuals and startups.  The researchers at Mayo better wake up and realize that their managements’ actions, if successful, will not be limited to stealing the intellectual effort of non-Mayo inventors.

 
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.

 
Congressman Doug Lamborn Votes for Constitution

Lamborn voted against the America Invents Act (H.R. 1249) today (6/23/11) and for upholding the Constitution.  Congressman Lamborn of Colorado was under incredible pressure to support this unconstitutional bill that would strip inventors of their rights. He voted against the special interests, the multinational corporations, and foreign countries who wish to hurt the U.S economy.  Unfortunately, the Act passedanyway.  As the Congressman recognized, this Bill will be bad for theColorado Springseconomy.  Please join me in letting Mr. Lamborn know how much we appreciate his efforts.

 
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 from Texas and the major Congresswoman challenging the Constitutionality was Marcy Kaptur, Democrat from Ohio.

 
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 thevote 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.

 
America Invents Act: House Vote Likely This Week 6/21

According to Jim Abrams of the Associated Press the House is taking up the America Invents Act (H.R. 1249) this week. It was pulled from the floor last week.

 
First-to-File: Is it Constitutional

The following letter from a number of Law Professors deals with the Constitutionality of a First-to-File system as contemplated by the America Invents Act (H.R. 1249 and S. 23) 

 
First-to-File: Is it Constitutional?

The following letter from a number of Law Professors deals with the Constitutionality of a First-to-File system as contemplated by the America Invents Act (H.R. 1249 and S. 23)

June 17, 2011

By Email

Speaker John Boehner

Office of the Speaker

H-232 U.S. Capitol

Washington, DC 20515

Democratic Leader Nancy Pelosi

Office of the Democratic Leader

H-204 U.S. Capitol

Washington, DC 20515

Re: Unconstitutionality of “First-Inventor-to-File” Provision in H.R. 1249

Dear Speaker Boehner and Leader Pelosi:

We are writing concerning the issue of the unconstitutionality of § 2 in H.R. 1249, the provision titled “first-inventor-to-file.” It is the belief of the signatories to this letter, all of whom are law professors who specialize in intellectual property law, that this provision is unconstitutional under the Copyright and Patent Clause in Art. I, § 8, Cl. 8.

Section 2 of H.R. 1249 violates both the plain terms of the Copyright and Patent Clause and the historical interpretation of this clause by Congresses and the federal courts. Although there are many legitimate concerns about H.R. 1249’s impact on innovation, this unconstitutional provision by itself is sufficient to justify withdrawing this bill from consideration. At a minimum, this is a justifiable reason supporting the 54 House Members who have joined the June 1, 2011 letter to the Rules Committee in expressing their concerns about the constitutionality of H.R. 1249.

H.R. 1249 Unquestionably Takes Patents Away From Inventors

Although the word “inventor” appears in the title in § 2, which confusingly uses the phrase “first-inventor-to-file,” it nonetheless creates the same first-to-file rights that existed in the patent reform bills that had been introduced in prior Congresses and which were universally recognized as creating a first-to-file patent system. It also creates the exact same first-to-file rights that exist in other countries that have adopted first-to-file patent systems in both name and substance, such as Canada. Section 2 has to create a first-to-file patent system if only because one of the primary justifications for this provision in H.R. 1249 is that the United States should harmonize with other countries’ first-to-file patent systems. In sum, despite the confusion created by its title, H.R. 1249 unquestionably creates a first-to-file patent system.

The Constitution Only Empowers Congress to Give Patents to “Inventors”

The basis of the 220-year-old first-to-invent patent system in the United States is the Copyright and Patent Clause, which states that Congress has the power:

“To promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. Const., Art. I, § 8, Cl. 8 (emphasis added).

The operative terms for patent law is that Congress is empowered only to “secure[e]” to “Inventors” their “exclusive Right to their . . . Discoveries.”

In the Founding Era, the term “Inventors” was defined in the newly independent United States of America as referring only to first inventors. In Samuel Johnson’s 1785 dictionary, often relied on by the Supreme Court as an authoritative source of meaning in the Founding Era, an “inventor” is defined as “one who produces something new; a devisor of something not known before.” Moreover, Johnson defined a “discoverer” as “one that finds anything unknown before.” Samuel Johnson, A Dictionary of the English Language (6th ed. 1785). Johnson was not alone in thinking that “Inventors” referred only to first inventors. St. George Tucker, for instance, defended the Copyright and Patent Clause against criticisms that it empowered Congress to create commercial monopolies by observing that “nothing could be more fallacious,” because this constitutional provision limited Congress to securing only an “exclusive right” in “authors and inventors.” St. George Tucker, Blackstone’s Commentaries: With Notes of Reference to the Constitution and Laws of the Federal Government of the United States and of the Commonwealth of Virginia, vol. 1, appendix (1803): p. 266.

Moreover, the First Congress, whose acts are often recognized as probative of the original meaning of constitutional terms, explicitly rejected the English practice of granting patents to importers of technology, recognizing that importers were not first and true inventors. During the drafting of the bill that became the Patent Act of 1790, the House committee decided not to follow the English practice of extending patent rights to the “first importer” of overseas inventions. Representative Thomas Fitzsimmons wrote: “The 6th Section, allowing Importers, was left out, the Constitutional power being Questionable.” See Karen E. Simon, The Patent Reform Act’s Proposed First-to-File Standard: Needed Reform or Constitutional Blunder?, 6 J. MARSHALL REV. INTELL. PROP. l. 129, 141 & n. 95 (2006-2007) (quoting congressional record).

Thus the Patent Act of 1790 authorized the grant of a patent only to a person who has “invented or discovered any useful art . . . not before known or used.” See Patent Act of 1790, § 1, 1 Stat. at 109-110. The Patent Act of 1790 further provided for termination of a patent “if it shall appear that the patentee was not the first and true inventor.” See Patent Act of 1790, § 6, 1 Stat. at 111. This uniquely American first-to-invent requirement was readopted in all patent statutes enacted by successive Congresses in 1793, 1836, 1870 and 1952.

As the famed patent law historian, Edward Walterscheid, whose work has been relied on by the Supreme Court in many patent cases, has written: “Implicit in the use of the terms ‘inventors’ and ‘discoveries’ in the intellectual property clause is the premise that before an exclusive right can be granted, the discovery to be patented must be novel. . . . Simply put, novelty is a constitutional requirement.” Edward C. Walterscheid, The Nature of the Intellectual Property Clause: A Study in Historical Perspective (Buffalo: William S. Hein & Co., 2002) at p. 310-11 (emphasis added). Walterscheid further writes that James Madison and early Congresses embraced a uniquely “narrow” conception of novelty compared to England (which permitted patents for importation), as they believed that for an invention “to be patentable in the United States a discovery had to be original to the inventor.” Id. at p. 312-13.

Supreme Court Confirms Patents Must Be Granted to Inventors

In numerous court decisions since the early American Republic, Supreme Court Justices have repeatedly recognized that the patent statutes imposed this constitutional requirement. In 1813, Chief Justice John Marshall, riding circuit, wrote that the “constitution and law, taken together, [give] to the inventor, from the moment of invention, an inchoate property therein, which is completed by suing out a patent.” Evans v. Jordan, 8 F. Cas. 872, 873 (C.C.D. Va. 1813) (No. 4,564) (emphasis added).

In the Supreme Court’s decision in Stanford v. Roche just last week, Chief Justice Roberts quotes from many of the Supreme Court’s decisions over the past 220 years to establish that “Our precedents confirm the general rule that rights in an invention belong to the inventor.” This included, for instance, the decision in United States v. Dubilier Condenser Corp., in which the Supreme Court held that U.S. patents have long secured “the result of an inventive act, the birth of an idea and its reduction to practice; the product of original thought.” 289 U.S. 178, 188 (1933) (emphasis added). Justice Joseph Story, recognized by patent scholars today as one of the founders of American patent law, wrote that “No person is entitled to a patent under the act of congress unless he has invented some new and useful art, machine, manufacture, or composition of matter, not known or used before.” Bedford v. Hunt, 3 F. Cas. 37, 37 (C.C.D. Mass. 1817) (No. 1,217) (emphasis added).

Congress May Not Define “Inventors” However It Wishes

Some supporters of the constitutionality of § 2 have stated that the meaning of the word “Inventors” in Art. I, § 8, Cl. 8 should be left to the policy discretion of Congress to interpret and apply in its patent statutes. But this cannot be a valid principle for applying constitutional provisions to Congress, because it would mean that every word in every provision of the Constitution should be left to the policy discretion of Congress as to how it should be applied to American citizens. Under this approach, Congress could freely redefine the meaning of “speech” in the First Amendment, or Congress could freely redefine the meaning of “due process” in the Fifth and Fourteenth Amendments. Certainly Congress has some discretion within the scope of its enumerated powers to enact legislation; this is why the Framers adopted the Necessary and Proper Clause. But the very idea of a Constitution that specifically enumerates limited powers in the federal government through expressly worded provisions requires that the limiting terms in these provisions not be read out of the Constitution by interpretative fiat. If “Inventors” is to have any meaning whatsoever in defining and limiting the scope of Congress’s power to enact patent statutes under the Copyright and Patent Clause, it can only mean what it has been consistently interpreted to mean for 220 years: patents may be secured only to the first inventors.

Supporters of the constitutionality of § 2 have further claimed that the instances in which patents are denied to first inventors given their post-invention activities, such as public use or abandonment, suppression and concealment of an invention, prove that the Constitution does not require that patents go to first inventors. Again, this is a nonsensical principle of constitutional interpretation. The Constitution establishes the presumption that first inventors are secured a patent, but it does not mandate that first inventors must receive patents regardless of their own actions. Thus, Congresses and courts have identified instances in which post-inventive actions by a first inventor can result in a default on the right to receive a patent. There are myriad examples—such as strategic behavior by an inventor in commercially exploiting an invention as a trade secret long before filing for a patent or an inventor’s publicly disclosing an invention and thus creating reasonable reliance interests in third parties that the invention is in the public domain—but they all entail post-invention actions that result in a substantive or procedural default by the first inventor in receiving a patent. This is no different from the constitutional practice of denying to felons the right to vote or the right to own firearms or restricting every American citizen’s due process rights through statutes of limitation, and so on.

Accommodating Foreign Laws Is No Excuse to Violate Constitution

Lastly, the supporters of the constitutionality of § 2 have alleged that Congress’s longstanding practice of accommodating foreign countries’ first-to-file rules when foreign inventors apply for patents in the U.S. somehow disproves the constitutional argument against this first-to-file provision. But such laws prove no such thing. The Constitution applies only within the jurisdictional boundaries of the United States of America, and thus it is merely an act of comity for Congress to permit foreign inventors who have created inventions in foreign countries to apply for U.S. patents; under the Constitution, Congress may permit or refuse such a patent application by discretionary fiat. This is why the United States has entered into treaties to secure international protection of patent rights. It is also why, since the early American Republic, foreign inventors working in foreign countries have always required Congress to enact special statutes to permit them to apply for U.S. patents. But the constitutional requirement for U.S. inventors is neither discretionary nor unclear: It requires that the laws “securing” patents to “Inventors” who are living and working in the United States may do so only for those “Inventors” who have created “Discoveries”—those who are first to invent, not first to file for the patent itself.

In closing, it is our belief that there is a serious question concerning the constitutionality of the first-to-file provision in H.R. 1249. But regardless of whether one agrees that a first-to-file system is unconstitutional, it is entirely appropriate that this debate occur in the deliberations concerning whether H.R. 1249 should be enacted by Congress. The constitutionality of a statute under consideration by Congress, in addition to whatever policy issues may be raised by it, is always something that should be openly and forthrightly considered by Congress, which has as much a duty to uphold the Constitution as do the Executive and Judicial branches.

Sincerely,

Daniel B. Ravicher

Lecturer in Law, Benjamin N. Cardozo School of Law

Executive Director, Public Patent Foundation

Adam Mossoff

Professor of Law

George Mason University School of Law

Lateef Mtima

Professor of Law and Director,

Institute for Intellectual Property and Social Justice

Howard University School of Law

Kali Murray

Assistant Professor of Law

Marquette University Law School

Sean Patrick Suiter Adjunct Professor of Law, Creighton University School of Law Visiting Professor of Law, Peking University School of Law

Dale L. Carson

Adjunct Professor of Law

Quinnipiac University School of Law

 
Patent Office Fees an Unconstitutional Tax

Congressman Paul Ryan[1] and Congressman Hal Rogers’ argument that ending Patent Office fee diversion is a sham.  The Congressmen point to Article 1, Section 9, Clause 7, which states:

 
America Invents Act Pulled From Floor

According to a Congressional aid who has been keeping me informed on the America Invents (not) Act (H.R. 1249) the Bill has been pulled from the floor this week and will not be voted on.  They are uncertain now when the Bill will be voted on.  I consider this good news.

 
Guest Post: Dale L. Carlson on the Experience of Other Countries with Post Grant Reviews and its Implication for the America Invents (not) Act

A patent reform bill is currently pending in Congress (Senate S. 23 and its House counterpart H.R. 1249) titled the “America Invents Act.” The bill proposes radical changes to the existing patent system that would impede innovation. Moreover, the bill contains ambiguous language that tends to confuse the reader, and is likely to confuse users of the patent system.

In particular, the bill attempts to draw a line of demarcation between “inter partes review” of a patent, on the one hand, and “post-grant review” on the other. The fly-in-the-ointment is that “inter partes review” occurs after grant, and is thus “post-grant.” Conversely, “post-grant review” is “inter partes” since it involves multiple parties, namely the patent owner and a third-party opponent. Accordingly, the bill is confusing since words appearing in one section are interchangeable with, and confusingly similar to, words in another.

In reality, the “post-grant review” proposal appears to be modeled after an analogous opposition procedure in place in Europe. Both procedures require the opposing party to submit a petition against the patent within a fixed number of months after the patent’s grant, or lose the opportunity to oppose using those procedures.

Significantly, other countries already tried European-style oppositions. In fact, Japan, China and South Korea implemented patent oppositions more than a decade ago. Within the decade, these efforts to mimic the European protocol all failed, and the procedures were abolished.

In Europe, there are no administrative alternatives to the opposition procedure. Hence, there’s no risk of redundancy in the European system, nor of confusion among users of the system. In contrast, Japan, China and South Korea have a separate administrative option, which still exists, called an “invalidation trial.”

The invalidation trial is comparable to the separate administrative option already available in the U.S. Patent Office, namely inter partes re-examination. The lesson we should learn from these Asian countries’ negative experiences with European-style oppositions is that introducing such a procedure is likely to confuse users of the system. Confusion among users of the patent system tends to stifle innovation.

Another provision of the bill would change our system from “first-to-invent” to “first to file.” That change might suit those who believe they can win a race to the U.S. Patent and Trademark Office. However, a race is not what Article 1, Section 8, Clause 8 of the Constitution envisions, nor is it what the Patent Act of 1836 formerly required or what the Patent Act of 1952 currently requires.

To the contrary, an “inventor” is not the person who is most fleet-footed in a race to the PTO, but rather the one who actually makes the invention first, unless the first party has “abandoned, concealed or suppressed it.”

A first-to-file system will demotivate inventors who believe that they do not have sufficient resources to win the race to the PTO. Demotivation of inventors tends to impede and stifle innovation. Such demotivation is the last thing that our nation needs, given the current state of the economy.

Another provision of the bill would undermine the incentive force associated with the constitutional mandate to “promote the…useful Arts” by tacitly encouraging each patent applicant to decrease the quality and quantity of disclosure of the invention in their patent applications.

Specifically, this provision would eliminate the penalty of unenforceability or invalidity that currently can be leveled against patentees in litigation for failing to disclose the best aspects of their invention in the patent application.

By virtue of this proposed change, a patentee’s failure to provide “best mode disclosure” of their invention would not be usable as a defense against patent infringement.

Although the best-mode requirement would technically remain “on the books,” it would have a hollow ring to it since there would be no risk of judicial penalty for failure to comply with the requirement.

Without the risk of sanctions, patent applicants may decide that it is in their best interest not to comply with the requirement, irrespective of their patent attorney’s counsel to the contrary. The likely result will be a diminution in the quantity and quality of information provided.

Reduced disclosure in patent applications will impede innovation by causing the patentee’s competitors to have to “reinvent the wheel” in order to piece together details about the invention that were left out of the patent application in order to keep those details a trade secret.

In conclusion, the proposed bill will diminish innovation and should not be enacted. If enacted, the resulting statute is likely to be repealed, but only after a huge waste of time, effort and taxpayers’ money.

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.

 
Legislative Update: America Invents (not) Act

I met with a couple of Congressional aides today and it looks like there will be debate on the amendments Wednesday (6/15/11) and Thursday and the vote on the America Invents Act (H.R. 1249 & S.23) by the end of the week.  The only reason for the rush must be that the Bill continues to lose support and the big companies pushing this Bill want it crammed through before opposition can coalesce.

According to the aides one amendment is to gut the Bill and only preserve full funding for the Patent Office (PTO).  This is the only form of the America Invents Act that I could support.

Other amendments include the Paul Ryan and Hal Rogers proposal to cut the provision to stop fee diversion.  Some Conservative groups have supported this idea under the idea that stopping fee diversion is violation of the US Constitution.  The argument is that stopping fee diversion takes the power of the purse away from the Congress.  This argument is nonsense.  The PTO is and always has been a totally self funded agency.  When you apply for a patent you write a check to the PTO, not to the General Treasury.  When the funds are deposited into the General Treasury it puts Congress in the position of a trustee.  A trustee has oversight power, but does not have the power to spend that money on other programs.  When it spends PTO money on other programs it is committing fraud and theft.  If Congress was private entity, all Congressmen would all go to jail for converting funds.  When different (less stringent) rules apply to those in government than those in the private sector, then you have tyranny.

I was asked my opinion on giving the PTO fee setting authority.  I am mixed.  If the idiot, Jon Dudas former Director of the Patent and Trademark Office, had had fee setting authority, it would have terrified me the damage he could have done to the patent system.  Of course, fee setting without the end of fee diversion is completely meaningless.  So I see this issue with ambivalence at best.

Now is the time to put pressure on your Congressman.  Please call you them and tell them to vote NO on the America Invents (not) Act.

 

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