U.S. Can't Afford to Mar Innovation

Article excerpt

Ever wonder why the US now turns the clock back one hour right after Halloween? According to a book by Michael Downing, it's largely due to the candy lobby that spent much time and money giving out candy-filled pumpkins and making election donations to members of Congress.

Similar forces are at work in another Washington debate that threatens to turn back the clock on innovation as early as February: the so-called Patent Reform Act of 2007. Despite the fact that improvement in some fashion is needed, this sweeping reform, if made law, will undermine the core of the patent system in the United States. It will mean weaker protection for small inventors, university researchers, and entrepreneurs across America.

The frequent characterization of the issue as a struggle between big pharmaceutical companies (against this reform) and the high- tech computer industry (for this reform) is not quite right. In fact, just a handful of high-tech giants - Microsoft, Intel, Cisco, Oracle, and Dell - support the proposed reforms. Small high-tech companies - the true innovators of this industry - overwhelmingly reject them as do innovators from other industries.

There are several serious problems with the current bill. First, the proposed changes weaken the protection patents are meant to afford by introducing an "apportionment of damages" provision that chips away at the economic value of patents. By diminishing damages that would occur from infringing a patent, it devalues all issued and future patents.

Second, the bill creates a mechanism for endless post-grant oppositions. This would throw a cloud of uncertainty over all issued patents, further diminishing the incentive to innovate and invest in the manufacturing of new products. Many inventors, exhausted from defending the validity of their patent repeatedly, will be forced to abandon their patents.

The bill also proposes changing from the American "first-to- invent" system, which favors true innovators, to a European-style "first-to-file" regime, which favors the winners of a sprint to the patent office. Large corporations, with their legions of patent attorneys on staff, would undoubtedly have the upper hand against small inventors and university researchers in this race.

Other proposed changes take the teeth out of patents and make rights harder to enforce. For example, they make it more difficult to prove willful infringement; diminishing the threat of treble damages will only encourage infringement and promote litigiousness.

The proposed changes in US patent law will make it easier for offshore copycats to bring their pirated goods into the US with impunity. …