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WHAT
IS A PATENT AND WHY BOTHER?
Patents
protect a product or service. The unreasonably high fees for
international protection and the lack of state prosecution for those who
violate granted rights, makes inventors wonder why it's worth the bother
and expense of telling everyone how your invention works.
Though,
stealing someone's idea, when it is patented or trademarked, constitutes
fraud. However, when one such case was reported to the police in Sussex,
and they said it was a civil matter. Yet, fraud is fraud. It is not a
civil matter. The police just did not want to investigate one complaint,
but were only too pleased to investigate when the same complaint came
from the other party. Thus, the law needs to be tightened, to prevent
discrimination.
Not
only that, but the very limited lifespan of a patent, of just 20 years, means that by
the time you have a product or process perfected for production, there
is not much time left to recover your investment.
Then
there is plagiarism. Once you have revealed how your system works, there
is nothing to stop others from copying your work. Then you face years of
painful litigation from high powered concerns like car and energy
companies, who will do all they can to bury you with legal costs as the
chosen weapon. As they walk off with your technology. There are many
such true stories.
IP
HERO - Regarded by many as a modern hero, for taking on the giants, even
at great personal cost. He lost his family and very nearly his sanity.
But, he will be remembered by every innovator who comes up against
corporate big business, Since the caselaw he created is there for all to
cite. Our advice though, is choose another way of earning a living. Let
the morally unsound stew in their own juices.
Ford
said they had not stolen Kearns’ idea. His patent was invalid on the
grounds that it wasn’t “sufficiently inventive.” They said he'd used off
the shelf parts. The Jury disagreed, the parts were used in an
innovative way that was not obvious. Or, Ford would have thought of it
before Bulldog Bob. Everything seems obvious, once you know the answer.
Coming up with a solution first, is the inventive step. Ford and
other
auto makers did not have a clue as to how Robert's invention
worked.
ROBERT
W. KEARNS - AN OBJECT LESSON OF HOW THE PRESENT SYSTEM
DISADVANTAGES INVENTORS
On
a rainy day in 1962, Robert Kearns had one of those meandering thoughts
that separate great inventors from mere mortals: What if a windshield
wiper paused between each wipe, like a blinking eye?
He constructed prototypes in his basement, filed a patent, and
began to dream up a plan: He’d set up a pretty little factory in
Detroit, become a major supplier of windshield wipers, and go down in
history as one of the automobile industry’s great innovators.
THEN FORD STOLE HIS IDEA
Corporations
will steal if they can. It's a sad fact of life. Why they don't just pay
reasonable royalties is a mystery. And the public don't seem to care
that someone was cheated. They keep buying Ford
(and other) cars.
In 1969, Ford debuted a fancy, first-of-its-kind intermittent windshield wiper on its line of Mercury cars.
The wipers, which cost Ford $10 to make and sold for $37, were a
hot commodity and were soon adopted by others in the auto industry: By
the mid-1970s, Chrysler, General Motors, Saab,
Honda, Volvo,
Rolls-Royce,
Mercedes and dozens of other big-name brands had a version of intermittent wipers on their cars.
All mimicked the exact configuration of Kearns’ device.
For nearly 30 years, Kearns waged an impossible legal battle
against one of America’s most powerful companies. In the end, he won
millions of dollars — but it cost him his sanity, his marriage, and the
remaining years of his life.
Kearns’ story is remembered as one of history’s great David vs.
Goliath lawsuits. But it’s also a reminder of the shortcomings of the US
(all) patent system(s) for independent inventors.
In
January of 1990, Robert W. Kearns, a former professor at Wayne State
University in Detroit, won his patent infringement suit against Ford on
Monday in federal court.
He has filed similar suits against General Motors Corp.,
Chrysler Corp., Daimler-Benz, Honda,
Toyota,
Nissan and 21 other
companies. The Ford case was the first to go to trial.
Kearns said in his 12-year-old lawsuit that his version of
intermittent windshield wipers was unique because of a certain
combination of parts. Ford denied that.
An eight-member jury sided with Kearns after a week of
deliberations. Chrysler was ordered to pay Kearns US$18.7 million with
interest. Chrysler appealed the court decision, but the Federal Circuit
let the judgment stand. The Supreme Court declined to hear the case. By
1995, after spending over US$10 million in legal fees, Kearns received
approximately US$30 million in compensation for Chrysler's patent
infringement.
As
Kearns waged this slow, agonizing war, his case became less about
financial compensation and more about calling out big corporations for
stealing intellectual property from inventors.
FINANCIAL TIMES 16 JUNE 2022 - GREEN PATENTS SLOW AS NET ZERO DEADLINES EDGE CLOSER
Intellectual property offices globally are exploring how they can help the development of low-carbon technologies.
[But will not waive fees, with recovery of costs
at the other end of use takeup, with the clock not ticking until a
product hits the market]
Patent activity for low-carbon technologies surged in the first decade of the 21st century, but has slowed significantly since 2013 — causing some concern that the rate of invention will not be enough to meet net zero targets.
A report from the European Patent Office and the International Energy Agency showed that the growth in low-carbon patents filed dropped to just 3.3 per cent a year from 2017-2019 from average growth of 12.5 per cent a decade earlier. It has dropped further in the past two years, although this is partly attributed to a Covid-related slowdown in new patents, generally.
There are some areas where invention has not slowed. Transportation technologies make up 40 per cent of all end-use low-carbon technology patents, and new patents for
electric vehicles — including
battery or
charging technologies — have seen the fastest growth. The busiest applicant in 2000-2019 was Toyota, while five other car manufacturers appear among the top 15.
However, given the slow pace of growth overall, the EPO and IAE report concludes that a boost in inventive activity is needed to meet
net zero goals.
Headline figures may not capture the full extent of investment in new technologies addressing
climate
change, though — as there is no clear definition of a green patent. There are international classifications that cover new low-carbon technologies, such as wind turbines and solar power, but the technologies that are likely to contribute to combating climate change are broader.
“‘Green’ is a funny, subjective word,” says Christopher Hamer, partner at intellectual property firm Mathys & Squire. “There is some good [intellectual property] that is going by the wayside because it’s not seen as pushing the frontiers,” he says. “For example, a soot suppressant for diesel engines is not seen as a sexy technology to take to market in Europe. But you’re not going to make
diesel obsolete in 20 years, so why not invest in some of the short-term fixes?”
A report published by Capgemini in 2020 concluded that artificial intelligence has the potential to help organisations meet between 11 and 45 per cent of industry emissions targets set out by the Paris Agreement by 2030. But you cannot directly patent an algorithm. The codes — like Google’s search engine algorithms — are usually treated as trade secrets. An AI use-case or application can be patented, but many of these may not be classified as “green”.
“Tech being developed to mitigate climate risk — for example, for weather forecasting or flood planning or route planning to reduce fuel costs — are only possible because AI is available to support them,” explains Mark Marfé, partner at law firm Pinsent Masons. Across all sectors and technologies, he adds, “AI is an accelerator and can draw out the benefits to a system or technology and make it better or quicker”.
Patent offices around the world have also looked at the approval process and how it might help the development of green technologies. The UK Intellectual Property Office, for example, introduced a fast track for
green
patents, called the “Green Channel” more than a decade ago. Yet, since 2009, fewer than 3,000 patents have been granted through this process.
“From an economic perspective, there is not a lot of reason in fast-tracking patents for green tech,” says Antoine Dechezleprêtre, senior economist at the OECD. It may be useful for start-ups looking to use a patent to access additional funding. But, for larger companies, a slower patent approval process allows more time for research and development before their patent is finalised and made public.
The process again raises the question of how to define “green”. “To use the UK’s Green Channel for patent filings, one has to make a statement as an applicant with a reasonable assertion that the application has an environmental benefit,” notes Chris de Mauny, partner at law firm Bird & Bird. “But it still begs the question: what is an environmental benefit?”
The European Patent Office has its own programme, PACE, which offers to fast-track applications in all technology sectors at no extra charge.
[Big deal. That just accelerates the rip-off
rate.] The EPO says current data indicate that inventors of green patents use the PACE procedure as often as inventors of other types of patents.
However, the speed of innovation in green technologies will need to increase — and the answer to this arguably sits outside the IP and patent system.
[The Trust has been put off by the high price of
worldwide patent cover, and the lack of protections from corporate
theft. Stealing patented technology should be made a criminal offence,
carrying $million dollar fines and long prison sentences]
“IP rights, and making it easier for firms to file patents specifically on green tech, will probably have a very small influence,” says Dechezleprêtre. “Climate policies, energy prices, [and] public R&D expenditure will have more of an impact.”
[Maybe, but only if those dolling out the cash,
include entrepreneurs, not just academics in universities.]
By Yasmin Lambert
PATENTS
- This hand built prototype vehicle contains a lot of proprietary
know-how that may never be revealed. Designs may
also be registered, and copyright utilised to protect some elements of chassis layout,
cartridge and loader design, etc., etc. As the 'Robert Kearns case amply
demonstrates, the patent system is woefully inadequate for lone
innovators. Students with no previous
experience helped to build this custom car, now on display at a private
museum in Sussex, England - though not yet open to the public. The
students were not involved in the high-tech stuff. Just the basics of
vehicle design, woodworking, shaping and welding. So preserving the IP
for fairer times. Until then, vehicle and infrastructure development
will limp along. Unless, you want to enter a JVH2 world hydrogen
challenge, and help to change the world.
KEEP
IT TO YOURSELF - OR RISK BEING EMBITTERED
For
struggling inventors, we'd suggest not telling anyone about your designs
or processes. Not until someone is prepared to pay you for your time in
development. In Europe, under their Horizon scheme, it might pay to
engage in collaborative research, where patent fees in part may qualify
for funding. But beware, decisions on funding are very political, and
ideas could be plundered by unscrupulous examiners and passed on to
other favored applicants - as the decision making process is conducted
in complete secrecy - and there is no compensation scheme in existence.
Examiners names are withheld, etc., and you have no access right to
their files. Where corruption in the EU and other nations
is not contained, nor is the decision making process, or results of applications
transparent. As in who was awarded the monies you applied for. Why risk
it?
BRAIN
DRAIN
Governments
need new technology, so that big business can sell new products which
generate taxes. If big companies had to pay inventors for their ideas,
the flow of new products to market would slow, and with it taxes for
governments who usually overspend, with high national debts as proof of
ineptitude in balancing the books. Thus, officials encourage inventors
to file patents, knowing the little guy will lose out and get ripped
off. It's a wonderful system for extracting ideas from novices and the
less enlightened. As it stands.
HOW
MIGHT THE 'JVH2' HELP?
The
JVH2 is a challenge, or series of challenges, where your product or
process is not revealed to any third party. You don't need a patent to
enter, but your idea will receive press attentions, to help you market
your invention or innovative designs. We operate a 100% transparent
system, where you have access to your files. And the names of other
competitors are made known as part of the PR drive. But not how their
technology works.
We'd
suggest not telling anyone how your idea works. Or, get a signed
agreement in place, and only with persons who can be trusted, and have
the money to pay compensation. Obviously,
not with your competition, or anyone who might suffer loss from
disruptive technology.
JVH2
challenges are there to help inventors and entrepreneurs, without taking
anything away from their achievement. Indeed, you will receive a trophy as
if you had applied for patent protection and a Certificate. Plus, use of the appropriate
trade names, as may be applicable. These being granted free.
Details
of your solution will not be published. Whereas, carefully guarded
videos (your own), etc., will advertise your efforts.
The
current
patent legislation in the UK is the Copyright, Designs and
Patents Act 1988. You can find out more about copyright legislation by
visiting the Intellectual Property
Offices (websites) in your country, or the WIPO, international World
Intellectual Property Organization.
We
are of the view that green
patents should be free of fees, like copyright,
and that the state should enforce against infringement. Or, that
applications are free, with low cost infringement insurance guaranteed
by the state. We have lobbied for change. So far being given the cold
shoulder. Until such time as the law is updated to protect newcomers, be
very careful not to reveal the spark that makes your idea work, where
others have failed.
SCIENCE BUSINESS 28 SEPTEMBER 2011
- PATENTS NOT WORTH THE PAPER FOR SMALL BUSINESSES
SMEs need better protection of their patent rights to prevent big companies stealing their ideas.
Small companies in the UK are calling for better protection for
their intellectual property, saying they cannot afford to pursue
breaches in the courts.
The Forum of Private Business, a UK trade association
representing a range of SMEs, wants the government to make it easier and
less costly for small companies to defend patent rights. In a
submission to the current Hargreaves Review of intellectual property
(see UK announces wide reform of intellectual property laws) the Forum
says its members have complained that breaches are going unpunished
because of the steep costs involved in pursuing them in court.
In addition, the Forum says innovations are often manufactured
under license outside the EU – with significant transfer of knowledge
abroad, but no control over how it is used.
One Forum member John Collier of Monument Tools Ltd in
Wallington, Surrey, has developed a new type of pipe cutting tool. Its
biggest market is in the US but he has experienced a number of patent
and IP problems involving bigger companies bringing in similar products
he believes should be protected designs. “There have been cases where
we’ve had IP protection but importers just ignore it,” said Collier.
“The tool is made in Asia, for example, put into the UK market and then
they sit there waiting to be sued – in the full knowledge that small
businesses can’t afford to sue them.”
Collier added, “There’s nothing you can do about it because you
can’t afford to – they are the big company and you are not. “
In addition to steep litigation fees, the Forum is concerned
that patent costs, a lack of clarity over R&D tax credits and a lack
of support within the UK’s public procurement process are combining to
hinder innovation-led growth.
“Entrepreneurs are the UK’s real innovators and this innovation
is one of the key elements that we need to nurture to drive economic
recovery and growth,” said Alex Jackman, Senior Policy Adviser at the
Forum.
While several of the measures outlined in the Hargreaves Review
are welcome, SMEs will remain at a disadvantage when it comes to
protecting IP. “Specifically, we want small business owners to be able
to secure their intellectual property more efficiently and
cost-effectively, including through greater overseas protection of UK
patents and IP,” Jackman said.
Patents
might as well be printed on toilet rolls, to at least have some use, as
you flush your money down the pan.
WHY
NOT WRITE TO YOUR GOVERNMENT ASKING FOR CHANGES IN THE LAW
Offering
inventors what appears to be temporary exclusivity incentivizes them to
invest in research and development, fostering innovation. But such
protections are fake. There is no exclusivity where it is not possible
to gain protections from the courts against imitators. Simply because
the cost of getting to court is prohibitive. Thus, beyond the means of
the ordinary inventor.
The fight against IP theft is ongoing, and governments,
international organizations, and legal systems are constantly adapting
to address these challenges. The existing system tricks creatives into
giving access to their ideas, for the benefit of large corporations, all
the while using the pretence of protection to drain ideas from their
creators.
Steal them, and ruin them if they complain.
PROPOSED
LETTER: URGENT ACTION NEEDED TO PROTECT LONE INVENTORS FOSTERING
INNOVATION
Dear Minister/Secretary of State,
I am writing to express my deep concern about the significant
challenges faced by lone inventors in the UK, particularly in light of
the limited protection available and the high barriers to entry in the
market. This situation discourages many budding entrepreneurs from
disclosing their inventions, potentially hindering innovation and
economic growth.
As you may know, lone inventors often lack the financial
resources and legal expertise to navigate the complex patent system. The
high costs associated with filing and enforcing patents can be
insurmountable, leaving them vulnerable to exploitation and unable to
secure fair rewards for their ideas. This discourages many from pursuing
formal protection, opting instead for secrecy or even abandoning their
inventions altogether.
Furthermore, the current market landscape presents significant
challenges for lone inventors. The dominance of established players and
the difficulty in accessing funding and distribution channels can make
it extremely difficult for them to bring their innovations to market,
even with strong intellectual property protection.
This situation creates a significant disincentive for knowledge
sharing and collaboration, hindering the potential for groundbreaking
discoveries and advancements. It also raises ethical concerns, as the
lack of protection can leave inventors vulnerable to unfair
appropriation of their ideas, potentially stifling their creativity and
motivation.
Therefore, I urge you to take immediate action to address these
critical issues and create a more supportive environment for lone
inventors.
HERE
ARE SOME SPECIFIC RECOMMENDATIONS:
- Establish a grant program: Provide financial assistance to
help inventors cover the costs of filing and enforcing patents,
particularly for those with promising innovations in areas of public
benefit.
-
Simplify the patent process: Streamline procedures and reduce
administrative burdens to make the patent system more accessible and
affordable for individual inventors.
-
Strengthen enforcement mechanisms: Increase resources and
improve collaboration with international partners to combat patent
infringement and ensure effective legal recourse for inventors.
-
Promote alternative reward systems: Explore alternative
mechanisms like prizes, tax breaks, and public-private partnerships to
incentivize invention and knowledge sharing beyond traditional patents.
-
Support knowledge-sharing platforms: Facilitate the creation of
platforms that connect inventors with potential partners, investors, and
resources, fostering collaboration and accelerating innovation.
By taking these steps, we can create an environment where lone
inventors feel empowered to share their knowledge, pursue their ideas,
and contribute meaningfully to our economy and society. I believe that
fostering a culture of innovation is essential for our nation's future,
and I urge you to prioritize the needs of lone inventors in your policy
decisions.
Thank you for your time and consideration. I look forward to
hearing your response and working together to find solutions that
support and empower the next generation of innovators.
Sincerely,
[Your Name]
SUBJECT: A CALL FOR "GREEN PATENTS": FOSTERING INNOVATION FOR A SUSTAINABLE FUTURE
Dear Minister/British Representatives at WIPO,
We are writing to you today to propose a bold initiative aimed
at accelerating the development and deployment of green technologies
critical for mitigating climate change: the creation of "Green Patents."
THE CHALLENGE:
As we face the escalating threat of global warming, the need for
innovative solutions has never been greater. However, the current
patent system often presents significant barriers for inventors
developing environmentally friendly technologies. High filing and
enforcement fees, coupled with the standard 20-year lifespan that starts
ticking immediately upon filing, can discourage inventors and hinder
the commercialization of essential green inventions.
THE GREEN PATENT SOLUTION:
We propose the establishment of a "Green Patent" program with the following key features:
- Reduced or waived fees: Eliminate or significantly reduce
filing and enforcement fees for patents on inventions with demonstrably
positive environmental impacts.
- Extended protection: Grant longer patent terms for Green
Patents, with the 20-year clock starting only when the invention is
demonstrably adopted by the market. This incentivizes inventors to focus
on commercialization while ensuring adequate reward for their efforts.
- Clear and objective criteria: Establish transparent and
rigorous criteria for identifying and qualifying inventions for Green
Patent status, ensuring the program's effectiveness and environmental
focus.
BENEFITS:
By implementing Green Patents, we can expect several positive outcomes:
- Increased innovation: Reduced financial barriers will
encourage inventors to pursue green technologies, leading to a wider
range of solutions.
- Faster commercialization: Extended protection will
incentivize inventors to focus on bringing their inventions to market,
accelerating their impact.
- Enhanced global collaboration: International adoption of
Green Patents can foster knowledge sharing and collaboration,
accelerating progress towards a sustainable future.
UK'S LEADERSHIP:
The UK, with its commitment to climate action and its global
influence, is uniquely positioned to champion Green Patents. By taking
the lead in implementing this program and advocating for its adoption at
WIPO, the UK can demonstrate its commitment to a sustainable future and
inspire other nations to follow suit.
A CALL TO ACTION:
We urge you to seriously consider the Green Patent proposal and
work towards its implementation. We believe this initiative has the
potential to be a game-changer in the fight against climate change, and
we stand ready to support your efforts in any way possible.
Thank you for your time and consideration. We look forward to
your positive response and to collaborating on this critical initiative.
Sincerely,
[Your Name/Organization]
IP WATCHDOG 25 APRIL 2014 - WHY 'PATENT REFORM' HARMS INNOVATIVE SMALL BUSINESSES
The recent “Patent Reform” bills have an insidious effect on
small businesses. The proposed legislation ensures small inventors will
never be able to get the best inventions to market by imposing: Fee
Shifting “Joinder”, Loser Pays, Pay to Play, Covered Business Methods
(CBM), Elimination of Post Grant Review Estoppel, Disclosure of All
Plaintiff Interested Parties, Enhanced Pleadings and Limiting Discovery,
and Customer Stay provisions that are so onerous, only large
corporations will be able to commercialize inventions. The provisions
will make small inventing companies “Toxic Assets” to investors. Small
inventors will likely need at least $5 million in the bank, not for
their own use, but to cover the infringers’ costs. This is part of the
shift in Congress to cater to big money interests, leaving the middle
class behind. The details of these legislative “potholes” will be
explained in this five part series.
As the National Co-Chairs and Executive Director of the Small
Business Technology Council (SBTC), a council of the National Small
Business Association, we support the highly inventive firms that
participate in the Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs. The SBTC is a council of
the National Small Business Association (NSBA), the nation’s first
small-business advocacy organization, advocating on behalf of America’s
entrepreneurs. A staunchly nonpartisan organization, NSBA’s 65,000
members represent every state and every industry in the U.S.
Small business creates about 5 times more patents per employee than large firms and 20 times more than
universities. [i] The SBIR program delivers 58% more patents than all U.S. universities
combined. [ii] Furthermore, small firms patents are more important (more often cited) than large firm
patents. [iii]
Small technology firms employ 38% of all scientists and
engineers in America (54.8 percent of all industrial scientists and
engineers). Yet these nearly 6 million scientists and engineers work
with only 4.3 percent of the government R&D dollars. In contrast,
firms with more than 500 employees account for only 27% of all
scientists and engineers, but receive 50.3 percent of government R&D
funds. Universities employ 16% of the scientists and engineers and
receive 35.3 percent, non-profit research institutions 9.1 percent of
R&D funding, and states and foreign countries 1.0 percent of R&D
funds. [iv]
The Small Business Technology Council (SBTC) believes that HR
3309 and other “patent reform” bills in the Senate will cloud patent
titles, making them weaker. For small business, patents will become
mostly unenforceable due to the proposed much higher upfront cost of
litigation, thus making small business patents significantly less
valuable. Loss of patent value constricts new company formation,
chilling new investments, and choking job formation. Legislating
disincentives for capital investments will result in the loss of many
hundreds of billions of dollars of wealth in America and dry up the
major source of new jobs, small inventing businesses. Purporting to
attack predatory trolls, the bills instead attack all small companies
with legitimate patent suits to protect the interests of large
infringers at the expense of new business job creation. Furthermore,
these bills do not specifically define or address “trolls” or
“non-practicing entities,” but instead lump all patent holders together.
With the current patent legislation, we have a baby and bathwater
problem, we are “throwing out” our small business inventors.
HR 3309 (“Innovation Act of 2013”) is anti-innovation and
anti-job, and will further raise the barriers against small business
technology development by making it yet harder to win and defend a
patent in the U.S. The House and Senate bills raise the costs of
obtaining and defending new patents, which disproportionately empowers
the largest firms while straining the capability of smaller firms.
Intellectual property is a key component to make and keep good jobs in
America. By raising the barriers to development and protection of
intellectual property, the bills remove a key incentive to innovate, and
provide large international manufacturers the ability to infringe with
impunity. Patents protect U.S. jobs, and these bills are anti-patent
and anti-job.
- By making it much easier for large integrated
multi-national corporations to simply adopt new technology without
consideration for patents, the resulting jobs will tend to flow overseas
to the lowest-labor-cost location, rather than be held by U.S. workers
defended by U.S. patents. U.S. patents are a primary defense keeping
U.S. jobs in the U.S.
- Over time, these changes also reduce the incentives for
American small businesses to continue their valuable innovation if their
products can no longer be defended against appropriation by the large
manufacturers. Small businesses create and tend to keep their jobs in
the U.S.
Furthermore, the bills do nothing to help reverse the most
pressing need at the US Patent and Trademark Office (USPTO), Fee
Diversion. Over $1.7 Billion of patent fees has been withheld by the
Treasury. [v] As the patent office is self-funded using fees
collected from inventors, withholding acts as a tax. Thus, this
“Invention Tax” is a $1.7 Billion disincentive for invention in America.
Even more importantly, since the withheld fees are not being used to
modernize the USPTO technology or hire new examiners of the highest
caliber to provide faster, better reviews, pendency remains near record
highs, [vi] which delays issuance of patents. This in turn
retards corporate formation and funding, slowing the economy.
The U.S. innovation sector is responsible for 27.7 percent of
U.S. jobs and 34.8 percent of U.S. GDP.[vii] According to David
Kappos, the former head of the United States Patent and Trademark
office, when discussing the lack of focus on Trolls in the current
bills, “untargeted legislation puts in jeopardy U.S. technology
leadership.” [viii]
Patents are the number one indicator of regional wealth
according to the Federal Reserve Bank.[ix] Where do the best patents
come from? “SBIR-nurtured firms consistently account for a quarter of
all U.S. R&D 100 Award
winners,” [x] on 2.5% of the Federal R&D budget. Regions
that increase their number of patents gain $4,300 more per worker over a
decade’s
time. [xi] If these “Patent Reform” bills are signed into law,
they will discourage small business patents, and the contrapositive
indicates that we will be a poorer nation. Changes in the law will also
adversely affect the over 21,300 SBIR award winners and their over
112,550
patents. [xii] This will become even more critical over time as
there has been a shifting in engineering talent from large businesses to
small businesses. (The employment share of American small business
engineers grew from 6% in 1978 to 38% in
2005. [xiii])
The Small Business Administration’s Office of Advocacy has now
warned what these bills will do to the
economy. [xiv] This is despite the fact that HR 3309
overwhelmingly (325-91) passed the House, and the President’s
indication, including comments in the SOTU
address, [xv] that he will sign a patent reform bill (such as HR
3309).
The President’s statements are inconsistent and appear to be at odds with his prior goals and statements, such as:
“President
Obama has said, if we are to win the future and be successful in an
increasingly competitive international market, the United States of
America must innovate. … The Obama Administration’s determination to
promote innovation and protect intellectual property (IP) rights will
harness the inherent drive and ingenuity of the American people in
meeting that goal. … Innovation protected by IP rights is key to
creating new jobs and growing exports. … Protecting our ideas and IP
promotes innovative, open, and competitive markets, and helps ensure
that the U.S. private sector remains America’s innovation engine.” [xvi]
The
America Invents Act (AIA) was fully implemented about 1 ½ years ago,
and its effect on our patent system has yet to be fully understood. One
of the AIA’s requirements was to have a study performed by the Chief
Counsel for Advocacy of the SBA on the effects of the Act on small
business. [xvii] This report was to have been completed by
September 16, 2012, eighteen months ago. We are very concerned that the
Administration needs to be cautious before making additional changes to
our patent laws, before the effects of the prior law have been
evaluated.
We must be certain that changes that are made should not
undermine incentives for developing new U.S. patents, their robust
enforcement, or the existing economic incentives for companies of all
sizes to invest in research, development, and new jobs. We encourage the
Administration to request the Senate to hold additional hearings on the
many different aspects of the legislation and its effects on small
businesses.
And how many lives it has destroyed, or how many inventors have
been
bankrupted?
The current Senate bills and HR 3309 have many items that we are concerned about. These include but are not limited to:
- Loser Pays.
- Pay to Play.
- Fee Shifting “Joinder”.
- Covered Business Methods (CBM).
- Elimination of Post Grant Review Estoppel.
- Disclosure of All Plaintiff Interested Parties.
- Enhanced Pleadings and Limiting Discovery.
- Customer Stays.
LOSER PAYS
American laws do not apply “loser pays” provisions to consumers,
corporations, protected groups, or any other class of private
litigants. This would induce these groups to tend to decline to enforce
their legal rights. Why should inventors be singled out (as
discrimination) as the only class so onerous that inventors alone should
face this burden, when it applies to no one else? The result will be
that small inventors will be deterred from exercising their rights and
that invention and resulting jobs will dwindle. More perniciously, the
smaller firms will be further deterred from investing to develop such
rights, as they will need a $5-10 million legal war-chest before they
try to exercise any patents. The large multi-national companies know
that smaller companies cannot afford to pay the larger business’s legal
costs if they lose, and so small businesses will not take the chance.
In contrast, the larger business can afford the risk. This is
anti-small business, anti-technology development, and anti-US jobs.
PAY TO PLAY
Pay to Play provisions require the inventor plaintiff to post a
bond or certify that they can pay the alleged infringers legal fees
should they not prevail. This puts enforcing a patent beyond the
financial capability of all but the largest of small businesses. Patent
litigation is already very expensive, highly risky and skewed unfairly
in the favor of the infringer. Pay to Play will make almost all of the
over 5,000 active SBIR companies lose most of their value, without any
hope of being able to enforce their patents unless they give up the
majority of their equity to a larger company (which would then put them
out of the SBIR program).
FEE SHIFTING "JOINDER"
Fee Shifting “Joinder” makes investors and others personally
liable for the legal fees of the alleged infringer if the plaintiff does
not prevail (possibly on each and every claim). This provision
eliminates a basic tenant of corporate law, protecting investors from
personal liability, making patents a “toxic” asset.
INVESTOR
NIGHTMARE
- This is an example of an investment nightmare. The market needs the
solution it provides, but there are no genuine patent protections. Not
even legislation forcing utilities and automotive OEMs to work together
to provide any kind of solution, that might in some measure incentivise
backers. Any such venture would end in tears, the asset being toxic.
Even worse of course, in the good old US of A. Not sure what the 'A'
stands for? It's not 'Liberty,' that's for sure.
TOXIC
ASSETS
Why
would investors risk personal assets beyond what is directly invested
in a business? This provision is antagonistic to investment in new
technologies. With no investment, this is fatal to most inventors. Why
are inventing companies now so heinous that America would revise
corporate law to eliminate personal liability protections
- only for patent holders? What have inventors done to be
singled out as to not be deserving of the personal liability protections
that all other Americans receive. Is it in America’s interest to so
persecute its inventors, investors, and entrepreneurs?
The conclusion must be that US policy makers are in the pockets
of big business. Why else would any administration even consider
imposing such burdens, when they should be levelling the playing field.
Clearly, if you are not absolutely loaded, it is not worth
filing a patent in the USA, and it is not worth doing business with any
US company, unless they are willing to sign agreements up front, in lieu
of doing business, with a bond in default. Such that litigations costs
will be covered by the defaulting company. The Robert Kearns case is the
case precedent, that demands
equality at arms for the underdogs in this unfolding drama. In
the UK is
is called a Fair Hearing, an Article 6 requirement under the
Human
Rights Act 1998. Under the UN's Universal
Declaration, it is seen in Articles 7, 8 and 10. That being the
case, US patent law appears to be in violation of international law:
Article
7.
All are equal before the law and are entitled without any
discrimination to equal protection of the law. All are entitled to equal
protection against any discrimination in violation of this Declaration
and against any incitement to such discrimination.
Article
8.
Everyone has the right to an effective remedy by the competent
national tribunals for acts violating the fundamental rights granted him
by the constitution or by law.
Article
10.
Everyone is entitled in full equality to a fair and public
hearing by an independent and impartial tribunal, in the determination
of his rights and obligations and of any criminal charge against him.
https://www.ft.com/content/dcff4b52-bb21-4596-a66b-24753635df0c
https://ipwatchdog.com/2014/04/25/why-patent-reform-harms-innovative-small-businesses/id=49260/
https://sciencebusiness.net/news/75460/Patents-not-worth-the-paper-for-small-businesses
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