American Innovators Lose Big in Newly Passed Patent Bill
American innovation lost big again as the U.S. Senate passed “patent reform” and caved to big business lobbyists at the expense of true innovators in small companies and universities. Bottom line: America has dominated innovation in the world for 100 years based on our patent system and protection of risk-takers. Innovation is the one thing we still dominate in the world economy. It is our job engine. The first rule of governing should apply here: If it aint broke don’t “fix” it.
The sponsors, Senator Patrick Leahy of Vermont and Representative Lamar Smith of Texas, worked extremely hard and were well-meaning, but the big lobbyists hijacked the process. The bill was conceived to solve the problem of truly frivolous lawsuits in the technology and banking industries. That problem was solved in five minutes, and then the big companies got ahold of the Bill and added all their bells and whistles and it passed based on sheer inertia. Few in Congress like this law, but they went along because big companies have more power than true innovators. Many will cheer it just to suck up to their representatives. Not me. Few, like Senator Maria Cantwell of Washington state, had the courage to call the bill what it is and that it “tramples the rights of small inventors.”
We gave some real competitive advantage to Europe and China with our “first-to-file” from first to invent. Now big companies and foreign firms with fleets of patent lawyers can “scoop” university professors and independent inventors by filing first. Our national investment in research and development has been devalued.
A lot of the reform was driven by the fat and happy tech companies like Intel, Cisco, Google and large New York banks. I call them the “infringers lobby” because their overt goal is to use their market power to steal other’s ideas without paying. That is what this bill does with its business methods section and also the new “post grant review” provisions.
These poor companies, most with market caps over $100 billion, whine loudly about how they are being harassed by the little guy. Never a larger load of horse manure have I heard in my 25 years of starting companies. They have forgotten their roots as venture capital-funded companies who relied on patents to get their funding in the first place. Now that they are less innovative, bloated bureaucracies, they want to repress the innovations of the little guy.
These technology companies and big pharmaceutical companies and others will use the new post-grant review clause to slow the patent process down, and to bleed small companies dry. It happens now, and will be much worse in the future, by big companies filing objections to the true innovations over and over, drying up small inventors’ ability to raise capital.
We have inadvertently put another nail in the coffin of American competitiveness. Our future, and the only way we can compete with China, is our unique ability to invent. It is the core American ideal. We can find our way out of any problem, and the little guy, be he Henry Ford, Thomas Edison, Alexander Graham Bell, Steve Jobs, Jonas Salk, or Gordon Moore, can dream big and invent new industries. All protected in their infancy by a strong patent system.
Not a single job will be created by this bill. Just happy smiles from big oil, big tech, and big pharma, lawyers and lobbyists, and with downright glee in China and the EU.
The most alarming fact is this law is just part of an even larger assault on innovation in the USA. Everywhere you turn, there is less capital available, higher taxes proposed on small business investors, more regulations on IPO companies and investors, an FDA gone wild, and crazy immigration and border policies that drive the best and brightest from our shores. The talk in Washington seems to be all about innovation saving us, and the policies seem to be all about killing it.