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Senate must rework reform bill to protect patent system and avoid unintended consequences

REUTERS/Larry Downing
Without wise patent reform action, the United States threatens to lose the innovative edge President Obama praised during his State of the Union speech.

In President Obama’s State of the Union Address, he made it clear that the nation with the greatest investment in innovation will lead the global economy. He cautioned that it is “an edge America cannot surrender.” Unfortunately, pending patent legislation before Congress would do just that – stifle innovation and threaten our nation’s global competitiveness. This caught my attention, as I have a patented commercial kitchen product that has a promising future, in part if we can protect our patents. 

When we think of all the innovative technologies and modern conveniences of our daily lives today, most Americans do not stop to consider the inventors and start-up companies who make them possible. Yet the very advances that ensure our place as leaders in the global economy – from smart phones and breakthrough cancer treatments to light bulbs and the microwave oven – were all made possible because of the patent system first envisioned in our Constitution that both incentivized inventors to invent and protected the fruit of their labor, giving them the ability to compete against rivals at home and abroad.

This is even more important to our nation’s future than most of us realize. According to the U.S. Department of Labor, 65 percent of today’s grade-school children will end up at jobs that haven’t been invented. What is at stake is a future we cannot even grasp yet.

Patents fuel the economy

These patents, made possible through our current system, are fueling our economy and will continue to do so in the future. Every job in one way or another produces, supplies, consumes or hinges on innovation. Countless industries benefit from intellectual property, and we all benefit from economic stimulus and surety provided by patents. According to a recent study conducted by the U.S. Patent and Trademark office, the IP industry generated an astounding 40 million jobs in 2010 alone, or 27.7 percent of all jobs in our economy.

Despite good intentions, it stands to reason that a scramble in the Senate to pass patent reform legislation has put many stakeholders on tilt as universities, engineers, small businesses, manufacturers, venture capitalists, inventors and judges read between the lines: These legislative proposals as written will shift power from everyday inventors and small businesses to larger, better financed companies.

The Senate must work diligently to agree on better language that addresses system abusers without elbowing out small business and entrepreneurs, arguably the most critical players – creating millions of jobs each year – in our innovative economy. Policymakers should take this opportunity to enact patent legislation that will allow our businesses to stay focused on innovation, not the threat of costly litigation. The dire need to develop consensus on a proposal that will promote progress for the full range of American innovation, from start-ups to large corporations, will take time and careful understanding.

Resist big-business and special-interest pressure

For more than 200 years, our patent system has fueled innovation in this country. Today that same system remains the envy of the world. As the Senate sorts through the complexities of the issue, pressure from big businesses and special interests should not cloud the importance of strong patents or the merit of preserving a system of everyday inventors and entrepreneurs like me, which is what our forefathers envisioned.

It is not a race to the finish line, but rather an exercise of caution to avoid unintended consequences and make well-informed improvements while preserving the best patent system in the world. The state of our patent system is strong and should not be weakened.

Ryan Bruns is an inventor from Walker, Minn., who has worked in the robotics and automation industry for the past 10 years.

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Comments (4)

  1. Submitted by Pat Berg on 02/19/2014 - 07:20 am.

    Your article could have been better

    It would have helped if you had included examples of the kinds of unintended consequences and abuse alluded to in your article. Or cites to other articles or studies that discuss these problems.

    Otherwise, I’m afraid that most people may find the whole subject of patent reform, why it’s needed (or not) and the attendant risks and benefits of said reform to be an obscure subject with little or no relation to their own concerns.

  2. Submitted by Jon Kingstad on 02/19/2014 - 08:55 am.

    Patents and monopoly

    Perhaps one type of reform Mr. Bruns has in mind is a provision related to patent misuse which was added in 1988. Patents are deemed to be an exception to American law and policy against monopoly but they are encouraged for the reasons mentioned in Mr. Bruns’s article. During the 20th century, the US Supreme Court developed a policy against allowing extension of the patent monopoly by strict interpretation of claims to prevent things like “tying arrangements” where other unpatented ideas of articles could be brought under the patent monopoly, or the patent could be artfully extended by constant “improvements”. Congress ended this in 1988 when it passed a “reform” which separated “patent misuse” from antitrust. That’s one example of how large corporate industry has snuck in changes to the law that enable it to create and protect their monopolies.

    I could also suggest that one “reform” might be repeal of the pernicious Plant Patent Act that allows multinational corporations like Monsanto to bully farmers with its patented seeds. Patenting natural things like plants were abomination under the common law. This law which permits it is likewise an abomination.

  3. Submitted by Steve Titterud on 02/19/2014 - 09:57 am.

    Highly misleading numbers !!

    This article states, “According to a recent study conducted by the U.S. Patent and Trademark office, the IP industry generated an astounding 40 million jobs in 2010 alone…”

    That would be astounding, if true.

    But that is NOT what the study says. What it actually says is “While IP is used in virtually every segment of the U.S. economy, the report identifies the 75 industries that use patent, copyright, or trademark protections most extensively. These “IP-intensive industries” are the source – directly or indirectly – of 40 million jobs.” That’s from the Patent Office website at http://www.uspto.gov/news/pr/2012/12-25.jsp

    As far as the author’s claims that not only were these jobs “generated”, but all of them “in 2010 alone”, it is hard to imagine how you could exceed such a misrepresentation.

    But to unravel the Patent Office’s statement to see what actually goes into that 40 million jobs number is, and how it DOES NOT represent patent issues, you’ve got to read the report itself: http://www.uspto.gov/news/publications/IP_Report_March_2012.pdf.

    (Quoted items below are from the report itself:)

    The first thing to observe is that this 40 million jobs number rolls up totals from the 3 classes of “IP-intensive industries” – trademark, copyright, and patent.

    So “IP-intensive” = “trademark-intensive” + “copyright-intensive” + “patent-intensive”

    How much does each contribute to the alleged 40 million jobs ?

    “A substantial share of IP-intensive employment in the United States was in the 60 trademark-intensive industries, with 22.6 million jobs in 2010. The 26 patent-intensive industries accounted for 3.9 million jobs in 2010, while the 13 copyright-intensive industries provided 5.1 million jobs”

    So again, the author’s concerns (WHATEVER they are – I agree with Pat Berg above) with the new provisions as regards PATENTS involves NOT 40 million jobs, but 3.9 million.

    But back to those big numbers. The lion’s share (22 million jobs) is claimed for “trademark-intensive” industries. So what is a trademark, anyway ? “a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.”

    So basically we’re talking here about the naming and labeling of things, not inventions.

    To show how expansive the Patent Office’s view is when rolling up its numbers…

    “As an example of a firm that has chosen to register a trademark in multiple classes, consider Whole Foods’ “365 Everyday Value” brand.”

    Ubiquitous naming, branding and trademarking in products places ALL GROCERY STORES in the IP intensive industries because of their “trademark intensity”, so their total employment pushes up that 40 million jobs number. So don’t think this 40 million jobs number is about inventors and inventions.

    “Gambling industries” also qualify to contribute their total employment to this alleged 40 million jobs by the same manner of definition and logic. Likewise for “Motion picture and video industries” and “Other financial investment activities” which curiously, lists as company examples, Citbank and UBS.

    But the count is only for jobs in “trademark-intensive” industries. So what is considered “trademark intensity” ?

    “The employment-weighted mean trademark intensity for these firms was 1.86 trademarks per 1,000 workers…Upon examining this distribution, we defined as trademark-intensive the 55 industries with trademark intensities above the sample industry mean…” In other words, if an industry uses 2 trademarks per 1,000 workers, it’s a “trademark intensive” industry, and its total employment is added into the total jobs attributed to this kind of IP. (They also filtered for a minimum count of firms per industry & a minimum # of trademarks over 5 years to eliminate some inaccuracies.)

    No wonder they come up with 22 million as the number of jobs supported, “directly or indirectly”, by trademarks !!

    You gotta read the report, which the author of this column obviously did not.

    MinnPost can’t fact-check the content of every column submitted here for publication. It relies on the good faith and the intent of authors to provide accurate information.

    These comments are not intended to dismiss the importance and significance of IP in general nor “patent-intensive” industries in particular. Rather, it’s about the accuracy and usefulness of information published here.

    I’d like to see a column by someone qualified to flesh out the real issues in the IP bills being considered. If enacted as law, they’ll be a big influence for a long time to come.

  4. Submitted by Steve Titterud on 02/19/2014 - 09:43 pm.

    Here’s a link to the Senate bill for Mr. Bruns

    http://www.leahy.senate.gov/download/patent-transparency-and-improvements-act-of-2013

    It’s 30 pages long, with clearly documented structure – names and numbers to sections, even line numbers. So it’s easy to refer to a specific part of the bill you don’t like.

    Maybe Mr. Bruns could tell us EXACTLY which sections of this bill he is objecting to. This appears to be substantially the same bill that the House passed in December, named the “Innovation Act”.

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