While the prospect of a government shutdown will doubtlessly grab all the headlines in the next couple of weeks, there is another struggle going on in Congress that threatens a good segment of the economy and the nation’s ability to invent.
Two bills — the Innovation Act (HR 9) and the PATENT Act (S 1337) — would undercut the abilities of tinkerers, inventors and their financial backers to protect their patents from those who would use their ideas without proper compensation.
Intellectual property rights are what helped make the United States one of the greatest and most productive countries the world has ever seen. The nation’s Founding Fathers saw that as so important to the young country’s future that they included its defense in the Constitution.
But the two misnamed bills — the Innovation Act hardly supports innovation and the PATENT Act, which stands for Protecting American Talent and Entrepreneurship would undercut legal protections, not enhance them.
James Edwards, co-director of the Inventor’s Project, says the bills — in particular the Innovation Act “would devalue patents and restrict the judicial recourse of patent owners. It would tilt the court system against inventors and toward patent infringers. “
The proposed legislation does so in part by requiring patent owners to disclose extensive and detailed information — and continually update it regularly — when a person or company files notice to a court that they will pursue legal action.
That basically provides a potential competitor with the nuts and bolts of a company’s operation and how it developed and is using its patented product or idea.
HR 9 would also shift the balance in court to “loser pays.” That means a small inventor might shy away from defending his patent rights because he or she could lose all they’ve got to pay the legal bills of the infringer.
That proposition isn’t limited to just the inventor, it could apply to universities and investors and others and the net effect would be to reduce financial backing to innovators and investors because it would raise the risk.
Fortunately a coalition of groups from across the spectrum have come together to oppose the omnibus legislation — including the Association of American Universities, Pharmaceutical Research and Manufacturers Association, the National Small Business Association, the National Venture Capital Association, the Club for Growth Heritage Action and others who are trying to amend the bill.
Brett Healy, president of Wisconsin’s John K. MacIver Institute for Public Policy, recently wrote a commentary on the legislation, saying intellectual-property intensive industries “accounted for approximately 35 percent of U.S. Gross Domestic Product” in 2010. That, he said, translates to 40 million jobs — a third of the jobs in the country.
“Necessity may very well be the mother of invention,” Healy wrote, “But it is that invention that drives our economy.”
Congress should see that as well and step back from these two acts or modify them sufficiently to make sure the U.S. patent system continues to reward the innovators and inventors and protects their work.