Agoracom

The following was a feature article from the Feb.28, 2008 issue of The Mercury News

San Jose Mercury News

Print Readership:

662,700 daily

733,500 Sunday

Online Audience:*

16.1 million monthly page views

3.7 million monthly unique visitors

Print Circulation (paid):

230,870 daily

251,666 Sunday

* sum of MercuryNews.com and SiliconValley.com

Proposed patent law will cripple U.S. innovation

By Daniel Leckrone

Article Launched: 02/28/2008 01:36:15 AM PST

Here's the greatest irony of American capitalism. On one hand, the White House and Congress rush in to stave off a recession with a stimulus package. On the other, the U.S. Senate is about to pass patent legislation that will hurt the very same economy by suffocating its lifeline called "innovation" - a lifeline already seriously impaired by a series of anti-patent judicial decisions made over the past two years.

If passed in its existing form, the bill masquerading under the euphemism "Patent Reform Act" will stifle growth and prosperity for the average U.S. citizen. It will slow down investment, reduce jobs and threaten economic recovery at a time we need it most. This misguided special-interest legislation still pending in the portals of the Senate must be stopped.

Discontent toward the bill has grown at the grass-roots level and a rousing opposition is gathering storm. From labor unions and universities to corporations, small companies and individual inventors, thousands of concerned citizens have spoken out to stop the passage of the bill. Even the chief judge of the patent appeals court, Department of Commerce and state governments have expressed concern about the proposed legislation and the impact it would have on the economy.

The American economy is driven by innovation, investment and the creation of technology-based products. This cycle creates new businesses and jobs. Fundamental to the health of this cycle is a strong patent system, as patents foster innovation and attract investment. If this foundation is destroyed, what is the incentive for the innovator or the investor? Who would innovate or invest if the Intels of the world usurp the fruits of their hard work and risk-taking? The leaps we have made as a nation in technology would slow to a limp, crippling America's ability to compete in today's global business environment.

The U.S. economy and its strong patent system have been the envy of the world for well over a century. However, a few very influential large companies led by Microsoft, Intel, Cisco, IBM and the other "usual suspects" have spun a web of deception and successfully pushed legislation through Congress that dramatically weakens the patent system. A corresponding bill is now approaching a vote in the Senate. The influential group of big companies calls itself the "coalition for patent fairness," but is more accurately described as the "infringers' lobby." They no longer need to rely on patents for a competitive advantage - instead, they rely on their dominant market power and don't want innovators getting in their way.

According to economist and patent system expert Pat Choate, the seven founders of the infringers' lobby have been cited for anti-trust violations over 250 times in the past decade. He has debunked the myths of "litigation crisis" and "runaway damage awards" and documented them to be false. Patent litigation has not increased any more than any other form of litigation; infringement awards represent about one-tenth of one percent of the infringers' revenue.

Recent judicial decisions have already weakened our patent system, making it easier to invalidate patents and more difficult to enforce them. What we need now is to strengthen the patent system - not torpedo it.

If the bill is passed by the Senate it would radically tilt the balance of power toward large corporations. Inventors will have to shoulder increasing costs to get patents for their inventions and will receive reduced compensation from infringers. They will be stone-walled with a never-ending barrage of legal proceedings. Infringers could only be sued on their home turf, instead of in courts which have rules minimizing stone-walling and obfuscation.

Significant global innovation centers, including Germany and Israel, are deeply concerned about this bill. A weakened U.S. patent system will damage their ability to invest in technology and create jobs. On the other hand, patent experts in China and India have welcomed the bill, as it would enable low-risk and low-cost access to U.S. technologies.

It is imperative that concerned citizens voice their opposition, telling their elected representatives, including their senators, to stop this legislation. The negative impact of this legislation will be profound, both near and long term. The Senate should reject the Patent Reform Act.

DANIEL LECKRONE is the founder and chairman of Technology Properties Limited (The TPL Group) in Cupertino.