More Reaction to Senate Patent Reform Legislation

By Donald Zuhn --

After six years of committee debate, all indications are that the Senate will finally take up patent reform legislation by mid-March (see "Patent Reform Legislation Moves to Senate Floor").  Earlier this month, we reported on the reaction of several groups to the passage of the Senate bill (S. 23) out of committee (see "Reaction to Senate Patent Reform Bill (S. 23)").  Since then, other groups have joined the discussion.

On Wednesday, nine organizations representing the small business, startup, independent inventor, and technical employee segments of the innovation community sent a letter to each member of the Senate stating that "this sector of the innovation community does NOT support S. 23, the Patent Reform Act, in its current form" (emphasis in original).  The organizations signing onto the letter included the American Innovators for Patent Reform, CONNECT, IEEE-USA, IP Advocate, National Association of Patent Practitioners, National Congress of Inventor Organizations, National Small Business Association, Professional Inventors Alliance USA, and U.S. Business and Industry Council.  In their letter, the groups contend that "[t]he 'first inventor to file' section of the bill has unique adverse effects on small business, startup entrepreneurs, independent inventors, and U.S.-based technical professionals," as it "disrupts the unique American start-up ecosystem that has led to America's standing as the global innovation leader."  The letter argues that "[b]ecause S. 23 removes the option to delay patent expenses, the bill advantages established companies, and disadvantages start-ups that must seek and carefully shepherd their capital," adding that "S. 23 changes the rules to favor global companies, against the start-up business model that utilizes the American grace period."  The groups also have "serious concerns" with other provisions, asserting that "[i]ncreased filings driven by S. 23's 'use it or lose it' grace period rules and by post-grant review will further burden PTO at a time when PTO's backlogs are unacceptable."  The letter would prefer that Congress "instead pass a streamlined, targeted bill that focuses only on long-term PTO funding."  The groups conclude that "[c]hanging U.S. patent law to be like the less-successful patent systems of Europe and Asia cannot be regarded as positive 'reform.'"

Last week, the Coalition for Patent Fairness issued a short press release on Congressional patent reform efforts, "applaud[ing] Senate Majority Leader [Harry] Reid [D-NV], Assistant Majority Leader [Richard] Durbin [D-IL], Senator [Charles] Schumer [D-NY] and Senator [Patty] Murray [D-WA] for laying out an aggressive agenda to keep the United States competitive in the global market."  The group noted that while it was "encouraged by the changes made to the bill reported out of the Senate Judiciary Committee from earlier versions, we continue to have concerns with the current Senate bill," stating that it "believes that additional changes need to be made to the bill to reflect the concerns of America's leading technology innovators and job creators as they continue to driving the economic recovery."  Coalition for Patent Fairness members include Adobe, Apple, Autodesk, Cisco, Dell, Google, Intel, Intuit, Micron, Oracle, RIM, SAP, Symantec, and Verizon.

On February 15, the President of the National Small Business Association (NSBA), Todd McCracken, sent a letter to Senate Majority Leader Harry Reid, "to express the objection of America's entrepreneurs and small-business innovators to key provisions of S. 23, the Patent Reform Act of 2011."  Noting that "[s]mall patenting companies produce five times as many patents per revenue dollar as large patenting companies and 20 times as many as universities," Mr. McCracken argues that "[i]t is imperative that any effort to modernize and improve America's patent system carefully consider the effect on the nation’s small businesses."  The letter contends that "the bill's provisions on post-grant patent challenges, and its effective elimination of the American grace period, would put small-business patentees at greater risk than the current system and would result in a U.S. patent system strongly titled in favor of large incumbent firms at the expense of America's small-business innovators," noting that "[t]he small-business innovators of NSBA continue to be extremely troubled by the complete lack of consideration of how the radical transformation to a first-to-file invention priority system -- which effectively guts the American grace period -- would affect small, innovative firms and independent inventors."  Contrary to the bill's supporters, Mr. McCracken argues that "S. 23 does not promote harmonization," but rather would produce "a one-sided 'harmonization' that will only benefit foreign firms and penalize small, innovative American firms."  He states that "[i]t is clear that the weak or (entirely absent) grace periods used in the rest of the world's first-to-file patent system throttles small-business innovation and job creation."  If a first-to-file system is implemented in the U.S., the letter predicts that "the pressure to establish filing date priority will require applicants to file more frequently, at every stage of development, without perfecting their inventions," and "[t]he costs of increased filings -- more frequent invention reviews, earlier and more frequent hiring of outside patent attorneys, and new patenting costs -- will be felt most strongly by small businesses."

Earlier this month, a coalition of 23 conservatives sent a letter to House Speaker John Boehner (R-OH), Senate Majority Leader Reid, Senate Minority Leader Mitch McConnell (R-NY), and House Minority Leader Nancy Pelosi (D-CA), asking them to "prevent the passage in this Congress of patent legislation that hampers U.S. competitiveness and threatens American jobs by undermining property rights."  Among the letter's signatories are Phyllis Schlafly of the Eagle Forum and former U.S. Attorney General Edwin Meese.  The group contends that "so-called 'patent reform' legislation . . . would cripple most of America's smaller inventors, research consortia and universities, and even the larger industrial firms that depend on patents."  The letter contends that "some in Congress -- again following the lead of several large multinational companies -- want to make it easier to infringe patents, easier to challenge patent rights in administrative proceedings and in the courts, and more expensive for inventors to defend their patents."  As for harmonization, the group explains that:

[S]ome of these so-called reforms have been proposed in the name of "harmonization" with foreign law.  Frankly, this notion is misguided.  Our competitors should have to “harmonize up” to our superior intellectual property regime, rather than our having to weaken our patent system and “harmonize down” to their levels.  Does the United States really need to be "harmonized" with a calcified European system or the impossibly unfair Japanese system, not to mention the Chinese system, where intellectual property theft is a way of life?  Such "patent reform" will lead to the plundering of American intellectual property and the loss of American factories and jobs to overseas competitors.

The letter concludes that "[t]his phony, market-distorting 'patent reform' is bad for America," and asks the Congressional leaders to "stop any such legislation from reaching the floor and protect the property rights enshrined in the Constitution."  While it appears that the Senate bill will reach the floor sometime in the next two weeks, the House continues to debate such legislation in committee.

For additional information on this topic, please see:

• "Patent Reform Legislation Moves to Senate Floor," February 22, 2011
• "Reaction to Senate Patent Reform Bill (S. 23)," February 9, 2011
• "Judiciary Committee Votes on Patent Reform Bill," February 3, 2011
• "Here We Go Again," January 30, 2011

Comments

[Vic Kley]

The Leahy Patent Reform and Inventor Repression Bill is destined to injure not just independent inventors but the basic start-up culture that has brought prosperity and wealth to us here in Northern California, Nevada and elsewhere in our nation.

We join all our fellow inventors in shouting DOWN WITH THE PATENT REFORM AND INVENTOR REPRESSION BILL!
It's time Senator Leahy to take whole new approach your deeply flawed Bill! This time Senator we want to see a strong invitation for multiple inventors to provide input to the new bill!

[staff]

"Our competitors should have to “harmonize up” to our superior intellectual property regime"

Absolutely! What the bill will do is help large corporations maintain their monopolies and kill their small entity and startup competitors and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs.

“Patent reform”

Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America.

Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
http://www.aminn.org/
http://www.connect.org/
http://www.ieeeusa.org/policy/policy/2011/021511a.pdf
http://www.ipadvocate.org/mibj/index.cfm
https://www.napp.org/resources/NAPP-PartialOppTo2009SenateBill.pdf
http://www.nationalcongressofinventororganizations.org/
http://www.nsba.biz/docs/patent_reform.pdf
http://thehill.com/blogs/congress-blog/economy-a-budget/141663-leahy-patent-bill-litigation-not-innovation
http://www.patentbaristas.com/wp/wp-content/uploads/2011/02/Small-Biz-Inventors-Empl.pdf

[K M Binkowski]

"Senator" Leahy has shown clearly that he believes big business is the source of innovation in our economy. He rejecting to recognize that all present time technologies come as the inventions from the individual invetors of the past and the present time. He supports bill S23, which is actually corruption of the best and leading the world patents system in US. He supports multinational/global corporations to alowe them to still our IP and patents and transfer them for free as infrigements to China, India and the other oversees countries... He showed his belief by not including independent inventors and start-ups in his Judiciary Committee's line-up of witnesses and testimony in creating the bill. Leahy seems to have little need for dissent or facts. He has no respect to our great American's inventors and their achivements... He has no respects to our economy, which badly needs recovery! He serves globalists and suporting our economy collapse instate of recovery... and he rejecting to knowledge this objective facts! He is NOT a good senator, he is NOT a good American and he suppouse to be removed from the Senate by his constituences! We inventors and the start-ups we power and create most of the new jobs in America. It is our efforts that make the iPhones, iPads, Googles, Facebooks, Televisions, DNA sequencers and many, many other core items of modern life possible and affordable. Not even mention those inventions of the past! Leahy's bill will injure us, and add to the difficulty and insult that means each year there are fewer and fewer start-ups and individual inventors submitting patents to the USPTO. This is fact, not the wishful thinking that Leahy tries to present as fact. Individual inventors and the smallest R&D groups REJECT S23 "The Patent Reform Act of 2011"! Americans who care about restoring our economy should join us to send a message to Congress. This S23 Bill which Leahy and his comrades calls "The Patent Reform Act of 2011" is truthfully the Deform of the Patent system and against our economy and recovery! If it passes the Senate - then will be same as passing froud and corruption and make a teft legal! It will costs America and its people dearly... Leahy and his comrades must be STOPED to what the try to do on American Economy and us the American people!

K. M. Binkowski
dc machine inventor

[David Boundy]

Go to www.senate.gov and pick up the phone. Do not email -- it will take too long for an email to get through the machinery. Call the D.C. office, ask for the staffer handling patent reform, and ask either (your choice) --

(a) kill the bill or

(b) adopt the amendment that strips out the "first inventor to file" section, and vote against the bill.

AIPLA is asking attorneys to take action to approve legislation that removes any effective grace period. This will drive our malpractice exposure up, and our quality of life down. Shame on AIPLA.

[Stan E. Delo]

Donald,

Thanks for the breaking news, and here we go again! David makes an excellent point about contacting the Relevant staffer by phone, as I have had very good luck using this approach. Also if you call the Senator's home office you will be talking to staffers that are more or less permanent and chosen by the Senator, as opposed to the hired hand type of staff they tend to have in Washington DC. I had a home staffer spend more than 20 minutes with me, while I tried to explain what the 2007 S. 1145 bill would mean for independent inventors if the Senate was foolish enough to pass it as written. She had several "Oh My! Really?" moments, so it seems like it was very useful to use a direct phone call. Thanks a million for all the help in the past and now David! Time to light up the phone lines before things get too far along....

Regards,
Stan~

[Stan E. Delo]

Postscript:

Another useful approach known very well in the business world when contacting folks by phone, is to call shortly after lunch, after they have had a break and might be feeling contented, and before they dive into their afternoon work load. Also, very well said Kaz, and it is worth noting that Senator Leahy is from Vermont, the IBM State.

Stan~

[Skeptical]

As they say in Chicago - vote early, vote often.

[anonymousAgent]

It is AMAZING how 'harmonization' is very SELECTIVE.
How about "harominizing" inequitable conduct rules with the much more lax practice outside of the USA??? How about "harmonizing" the fact that secret offers to sale and/or public use of the invention that keeps patnetable features secret do NOT count as references against a patent??

[patent litigation]

It is indeed telling that most smaller companies and independent innovators appear to oppose the pending patent reform bill, while many large corporations seem to welcome it with open arms. Considering the fact that small businesses are the main drivers of American innovation and hiring, our legislators should take it upon themselves to think very carefully about the consequences of passing this bill.
http://www.generalpatent.com/media/videos/gpc-senior-vp-paul-lerner-interviewed-cnbc-asia