Patent Legislation Will Stifle Innovation
In the patent community, there has been discussion concerning recently proposed legislation called the federal Patent Reform Act of 2009 (Senate Bill 515) to restrict rights for patents owned by companies that do not make or sell an invention covered by the patent. The current United States patent system allows an owner or purchaser of a patent, even though they do not make, use or sell the product covered by the patent themselves, to license or sue others over the patent to derive revenue.
Critics of this practice are often large companies which become targets of entities known as “patent trolls.”
Sneaky Strategy
A patent troll acquires one or more patents in a portfolio that provide broad protection for a given technology. The trolls then begin a systematic process of asserting the patents to obtain licensing revenue, usually against large companies with deep pockets.
In some cases, the cost of defending the patent lawsuit is more expensive than simply giving in and paying the requested licensing fees. In many cases, the large companies often pay up.
While some may liken this ability to extortion, if the current proposed legislation is passed and weakens the patent system by devaluing patents owned by entities that do not make, use or sell the product or process covered by the patent, the legislation might do more harm than good.
As an example, independent inventors often do not have the means to make, use or sell an invention, and are only able to make money from an idea by getting a patent and licensing it to large companies. The ability to think up an invention, patent it and subsequently make money off the idea is central to continued innovation.
There are many instances where people are good at inventing but have no means to manufacture the product they invent. The present patent system allows these people to capitalize on their ideas and promotes innovation.
Should the proposed legislation pass, if someone wanted to derive maximum revenue for their patented idea, they will also have to make the invention covered by the patent. The result of such legislation, as currently proposed, will actually stifle innovation and diminish creativity and entrepreneurship.
Many credit the U.S. patent system with the technological boom that has transpired over the last 50 years. Such a powerful tool has provided unprecedented economic growth. While the system may not be perfect, it is still a viable and credible system that awards innovation. Instead of reforming the patent system as proposed, legislation should be restricted to punish the bad actors that utilize the system as it was not intended.
Barry Chapin is a registered patent attorney and the founder and managing partner of Chapin Intellectual Property Law LLC in Westborough. He can be reached at barry.chapin@chapin-ip-law.com.
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