Patent Reform 2007 - Guest Commentary - Are You Aware that Congress is Mulling over Crippling Your Ability to Fend off Patent Infringement?

By Guest Contributor
Mark David Torche, Esq.
Patwrite LLC
An Intellectual Property Law Firm
www.patwrite.com

Editor's Note: While S1145 (The Patent Reform Act) has been officially taken off the schedule of the U.S. Senate for 2008, it doesn’t mean that the issue is dead! It could be slipped through without warning after the elections, and it’s sure to be re-introduced in 2009 under a new bill number or title. After all, attempts to change the U.S. unique patent system have been going on for more than 30 years, but have been the most intense since the late 80’s through now, popping up under different bill numbers and titles. So Mark’s article is very important for you to read about how the issue of damages apportionment in infringement cases will negatively affect independent inventors’ rights. In addition, be sure to read this blog post that summarizes the status of The Patent Reform Act.
A complete waste of time that has weakened the US patent-owning communities

Are You Aware that Congress is Mulling over Crippling Your Ability to Fend off Patent Infringement? What Are You Going to do about it?

Individual inventors stand to lose big if the Patent Reform Act (PRA) passes the Senate. It has already passed the House of Representatives.

What's the Big Deal? I would be glad to explain, but first let me ask you a question. What has traditionally protected patent pending inventions from a greedy, well financed infringer?

Answer: If a patent issues, the inventor can bring suit against the infringer with the threat of triple damages as well as legal fees. Of course the inventor has to prove that the infringer intentionally infringed in order for this penalty to apply.

Why is this so significant?

Present patent law provides the poorly financed inventor the means to take on a well-financed corporation transgressor- if the patent holder has a good case. A legal firm will take the case on a contingency basis anticipating recovering their costs by winning.

Present patent law is a powerful deterrent to infringement. Even the largest of corporations must carefully consider before they start producing a patent pending invention. Big business does not like this threat. They would love to be able to do what they please and pay as little as possible for a new invention.

And that is why we find corporate lobbyists whispering in the ears of Senators about patent reform. Right now, the Senate is considering The Patent Reform Act (PRA). S1145 would effectively end this threat of triple damages and basically eliminate the ability of under-financed inventors to fend off infringers.

The PRA practically eliminates triple damages and legal fees - replacing these provisions with "reasonable royalties." This means that even if an infringer loses, they would simply be ordered to pay what they would have paid if they had legally licensed the invention in the first place.

While this may sound reasonable on the surface, the consequences of the legislation effectively makes it open season on individual inventors. Individual inventors likely cannot afford legal action and they won’t be able to attract an attorney because the financial incentives have been stripped away.

Therefore, the infringers' risk of losing is minimal. Hmm, do you think this might encourage corporations to gamble on infringement with so little to lose? Do corporations ever do anything unethical? Do you feel as an individual inventor threatened under these circumstances?

I am not against big business and they owe a duty to their stockholders to maximize profit. But we cannot let our elected leaders tip the balance of fairness against the individual inventor. The rights of the individual to the "pursuit of happiness" and every individual American having the legal rights to protect and profit from his or her dreams and efforts are the very foundation of the American way of life and our System of Government.

And look in the mirror. If you are an inventor, this will affect you. We cannot let corporations influence our elected officials into making this fundamental error. We need to fight back. We must protect every American’s right to profit from their own labors. You must protect your own interests.

And I am not a litigator. I am not standing here worried about my wallet in all this. I am just a lawyer who works day in and day out to help inventors protect their inventions from those who would try to infringe.

But I certainly understand the critical role that my litigator brethren provide as a countervailing force against powerful and well financed companies who might be tempted to abuse your patent rights. I am sure most Americans understand.

Does anybody need a stark example? Anybody here remember Frank Kearns? In 1963 Kearns offered Ford Motor Company his patented intermittent wiper assembly. Ford decided to offer intermittent wipers on select Mercury models in 1969, but then changed their mind and decided to create their own in-house device.

Here is the clinker.

Kearns first refused to tell Ford how the device worked, but ended up obligated to describe the functions because wipers are a safety device on a car. Just a few months later, Kearns was notified that Ford had changed its mind. They were going to produce their own device in house.

Shortening the story, Kearns moved on to a job with the National Bureau of Standards.
But in 1976, he disassembled a wiper control from Ford. Guess what he found., Yup he found basically his own invention.

Kearns immediately had a nervous breakdown, fled his home, and spent time under medical care. When Kearns reappeared, his hair had turned white.

Just stop and put yourself in his shoes. Can you imagine the sense of betrayal and sense of being abused? How much more helpless would Kearns have felt if he had lived under the provisions of the Patent Reform Act? Where might you find yourself if this current legislation passes?

Well, Kearns sued and won millions. It fact he litigated for years. He won millions and spent millions on legal fees. It is a long, harrowing story. A very good account can be found at www.americanheritage.com

What can you do? What should you do?

I suggest you immediately call your state senators and let them know how you feel. Do yourself a favor. Do every American a favor. Support the rights of Americans to follow their dreams and to continue to have the ability to protect their dreams from patent interlopers.

Why don't you contact your senator right now.

And pass this information on to others. We need all the help we can get.

Patent Reform 2007 - Guest Commentary - The REAL Purpose of S.1145/H.R.1908 Patent “REFORM” Legislation

By Guest Contributor
George Margolin
Vice President, Professional Inventors Alliance

“Not a single section in this proposed legislation is for improving the patent system! And NONE OF THEM are directed at reducing the massively INCREASING, backlog of PENDING Patent Applications. ALL of them are designed to spread Web based Land Mines to cripple American patents and Inventors, while REDUCING THE EXPOSURE OF INFRINGERS! This, CLEARLY, cannot help the people who created the jobs and wealth that make America the most creative technological engine the world has ever known! And it would ABSOLUTELY, POSITIVELY, DESTROY AMERICA’S TECHNOLOGICAL SUPERIORITY!” (Retired Bell Labs Patent Attorney)

S.1145 was RUSHED THROUGH COMMITTEE, before the Senators could DISCOVER that Nothing in it helps American Inventors or Invention or Innovation. And NOTHING IN IT is Good for America! It will only benefit its Gargantuan Goliath Trans-National sponsors!

As a long time Professional Inventor, I can assure you that this bill will be a DISASTER for American Technology, as was shown in the FORTUNE article .

THIS LEGISLATION WOULD DESTROY OUR PATENT SYSTEM and ECONOMY!

S.1145 Doublespeak legislation is NOT designed to solve problems with the patent system. It is craftily crafted to PROTECT the sponsoring multi-national corporations from the consequences of “borrowing” -- without recompense, the Inventive Property of creative American small businesses, universities and independent inventors! These, together, create virtually ALL OF THE BREAKTHROUGH INVENTIONS WHICH MAKE AMERICA GREAT!

This Legislation would provide a clear path for countries like CHINA to usurp even MORE of our manufacturing power – including America’s mainstay automotive and Electronic industries. NO MANUFACTURING -- NO PAYROLLS – AND A DYING AMERICAN ECONOMY!

WHY THE AMERICAN PATENT SYSTEM WORKS

The purpose of the American patent system is to grant a limited, short term, monopoly if an inventor FULLY describes his or her invention. The Patent Application description of the invention is to advance the art and TEACH it so that other Americans can build upon it. The purpose is NOT to SELL products. THAT is the purpose of our time tested, successful patent system.

BUT because the Patent Office is DISMALLY UNDERSTAFFED AND UNDER FUNDED – it is INCAPABLE of EXAMINING THE INCREASING FLOOD OF PATENT APPLICATIONS. Because of this -- patent application pendency is now about 800,000! In plain English – that is Eight Hundred THOUSAND applications BEHIND – and getting further behind every day. So IF the USPTO were to accept NO NEW APPLICATIONS – it would take more than FIVE YEARS to complete them with the examining staff currently on board.

S.1145 WILL ABSOLUTELY MAKE THE BACKLOG WORSE!

George Margolin
Vice President – Professional Inventors Alliance
inventor@piausa.org

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Patent Reform 2007 - Guest Commentary - Patent Reform Act or Patent Dilution Act?

by Guest Contributor
Mark David Torche, Esq.,
Registered Patent Attorney, Patwrite LLC

First let me say that I am a strong believer in the free enterprise system of economics and have nothing against big business and large corporations per se. Of course my law firm specializes in working with private inventors and small businesses, so I naturally tend to identify with the issues most important to them.

The United States Constitution (Article 1, Section 8) empowers Congress: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Since its inception in 1790 with the passage of the first Federal Patent Act, the US patent system has arguably been the most successful promoter of private innovation in recorded history.

Of course there have been many changes in the system since then, but it has remained a system that tended to equal the playing field and even a poor person with a great invention could force the "big boys" to play nice because of the patent system. We merely have to look to other parts of the world to see the difference in patent philosophies and the way they impact their respective societies.

Almost all countries have a patent system of sorts, but if you look at who is filing and enforcing those patents, you'll see that the U.S. system is well represented by the private inventor. In other countries, the vast majority of patents are filed by large corporations. Additionally, the court systems in other countries are much less accessible to private inventors so even if they have a patent, it is very difficult for them to enforce it.

In spite of its tremendous success record, or perhaps because of it, every few years the U.S. patent system comes under tremendous pressure to fundamentally change it. It is relatively easy to see where this pressure is coming from: big business.

Large multinational corporations do not want to have to deal with a strong independent inventor class that forces them to pay millions in royalties and license agreements. Even though these corporations hold and file many patents themselves, they have the deep pockets necessary to enforce their market share even without a strong patent system.

The U.S. patent system is about to quietly undergo a radical change if the bill that is currently under consideration in the U.S. Senate and recently passed by the House becomes law. Most people are unaware of the drastic changes proposed to the patent system as it seems to be overshadowed by more publicized issues like the war in Iraq or the coming presidential elections.

Changes proposed:

I will not attempt to outline all the changes addressed by this legislation; only the ones that I feel are the most serious to the well being of the private inventor and small businesses that depend on the patent system to protect their inventions.

1. First-to-invent to First-to-file:

This is a fundamental change. Since its inception, the U.S. patent system has always held the basic philosophy that the first person to invent something should be rewarded even if someone else beats them to the patent office. Of course this is not without controversy and expense, but it meshes well with the American sense of "rightness" and has served the private inventor reasonably well throughout its history.

At the very least, a fundamental change of this magnitude deserves a thorough and public discussion allowing all the issues to be presented. This legislation has been mostly 'submarining" through the legislative process with little public debate. Most of the rest of the world already has the first to file system, but again, there is not nearly as robust a private inventor class in these countries. We should be very careful before making such a major change.

2. Patent Searches, Patent Office to Patent Applicant:

Of course I always advise my clients to get a good search before filing a patent application and the U.S. system does not allow patents on inventions that are not unique and new. If your invention is already in the public domain, you are not entitled to a patent.

A good patent search can save would-be inventors lots of money if it turns out that the invention is already known. However, the patent office still performs its own patent search, with full disclosure on the part of the inventor (i.e. the inventor has a legal duty to disclose all known prior art that he or she believes is related to patentability) and relies on its own search to determine patentability.

If the current legislation passes, each applicant would be required to perform the search that the patent office will rely on. While this may sound like a minor change, in reality, this effectively guts the patent system. How, you ask? Because, no patent search is perfect, not the one performed by the applicant (or representative like patent attorney or agent) or the one by the patent office.

The problem with this proposal is on the enforcement side. If it can be shown that the applicant deliberately didn't reveal something germane to patentability, the patent can be invalidated along with civil and criminal penalties. This means that the private inventor presenting an issued patent to a large corporation faces the likely challenge to the patent by the company's legal department. If the search overlooked something - not something that would preclude patentability since that could be used even now to invalidate a patent - but merely something that was relevant to patentability but not disclosed, then the patent will likely be invalidated for fraud on the patent office. This means that basically every patent that has any economic advantage will be subject to invalidation.

There are other major problems with this legislation such as a new way to compute damages, etc. but in my opinion, the two issues above are the most important to the private inventor and small business and should be voted down.

We need to be very careful before radically changing the system that has allowed individuals such as Thomas Edison and George Washington Carver access to a strong patent system. Our system is unique to the United States and is part of the American reality of the "rags to riches" mentality that is unequaled in the rest of the world.

If you have any questions regarding this legislation or other intellectual property law issues, please feel free to contact us toll free at 866-424-7529 or email mark@patwrite.com. His web site is at www.patwrite.com

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How to Instantly Find and Email Your Elected Officials

U.S. Senate web site:
Find your state's senators by entering your state at:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
It'll bring up a quick form that you can fill out and email to them!

U.S. House Web site:
Find your state's representatives by entering your state at:
http://www.house.gov/house/MemberWWW_by_State.shtml
It'll bring up a chart of the states, click your state, and it'll bring up the web sites for your House representatives. Then look for the email form to contact your representatives.

Then be sure to email other individuals that you know, who should also let their voice be heard on these important issues.

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