"I write to you to raise my concern regarding and express my opposition to, S.1145, the "Patent Reform Act of 2007." Despite bipartisan opposition, the House passed a corresponding bill on September 7, and I understand that S.1145 may reach the Senate floor any time now.
This bill (S.1145) does not serve the interests of your constituency or the American People. According to a study commissioned by Small Business Administration, roughly 40% of American jobs are created by small businesses. Approximately the same percentage of patents is issued every year to independent inventors and small businesses - the true American innovators. Small and independent inventors form the backbone of the American economy; yet, the pending legislation favors large businesses (and primarily those in the information technology industry) and is distinctly anti-inventor and anti-entrepreneur.
This year in several cases, the U.S. Supreme Court has made sweeping changes to patent doctrine, including a reinterpretation of the fundamental test of patentability: no obviousness from the prior art. It is premature to make legislative changes to the patent law until the effects of these Supreme Court rulings are fully appreciated.
Some of the more egregious changes proposed in this bill include:
• Mandatory publication of pending patent applications regardless of whether they are going to be granted as patents. This abrogates a legislative compromise crafted in 1999 that has allowed applicants who forego filing applications in foreign jurisdictions to "opt out" of pre-grant publication, thus preserving their trade secrets and preventing their own disclosures from unintentionally becoming part of the prior art.
• The apportionment of damages provision of the bill not only chips away at the economic value of patents but cuts to the heart of what a patent is - the right to exclude others from making, using and selling the patented invention. If an infringer sells a patented product, the infringer must pay damages to the patent owner. If only nominal damages may be assessed against an infringer, then what is to discourage patent infringement? An attempt to dramatically diminish patent damages devalues all issued and future patents and makes patents not only worthless, but indeed-meaningless. The bill would dramatically amend section 284 to limit damage awards by adopting an untested, new "prior art subtraction" construct which limits the royalty available to a patent owner to the "patent's specific contribution over the prior art," seriously undermining the value of patents. In an effort to shore up the minimal royalty this untested concept would yield, additional new, untested language was added stating that "the contribution over the prior art may include the value of the additional function resulting from the combination." What is the value of the "additional function" of the combination of paper and adhesive in Post-it Note® products?
• The bill fails to implement the National Academy of Sciences recommendation to significantly restrain the doctrine of inequitable conduct. It would make the failure to disclose "any information that a reasonable patent examiner would consider important" a basis for holding a patent unenforceable and would permit that holding to be applied to related patents. This restatement of the failed regime of inequitable conduct is particularly harsh and ironic in view of the PTO's efforts to force ever greater disclosure from applicants, who increase their risk of a later charge of inequitable conduct with every statement made during prosecution.
• The bill mandates that the PTO require all applicants to submit a search and patentability analysis with every application. Not only would this increase the cost of filing applications by thousands of dollars, it substantially increases the likelihood of later inequitable conduct charges given the failure of the bill to adequately constrain such charges.
• The proposed "post-grant opposition," imported from European patent regimes, will allow infringers to easily and endlessly challenge the validity of issued patents, thereby forcing inventors to spend money until they are forced to abandon their patent rights.
• The bill would retroactively authorize the PTO to issue the final rules limiting the filing of continuations published on August 21st. This is bad policy.
Our Founding Fathers gave the Congress a constitutional mandate to "promote the progress of science." This Congress, if it passes this bill, will do the opposite. A patent is the only incentive for an inventor to disclose an invention to the public, rather than keeping the invention as a trade secret. This bill will take this incentive away. As had been the case for centuries, companies and independent inventors will choose to rely on trade secrets in place of patent protection. This will discourage the exchange of information and stifle innovation-leading to everyone reinventing the wheel, rather than building on others' ideas.
Our uniquely American first-to-invent system is deeply rooted in the U.S. Constitution, which gives Congress the power to grant exclusive right to inventors, not the winners of the race to the Patent Office. If replaced by the European first-to-file system, as proposed by the current Bill, it will favor large corporations with in-house patent attorneys, always at the ready to write a patent application. Independent inventors, scrambling to find money to hire an attorney, will be left in the dust. It will also hurt the quality of patent applications-instead of experimenting to refine the invention and looking for the "best mode" to practice it, inventors will race to the Patent Office with half-baked ideas.
Emasculated by the loss of their technology transfer revenues, universities will be forced to lay off scientists involved in fundamental research. Science and higher education will suffer.
The pending Patent Reform Act of 2007 would:
• betray independent inventors - the backbone of American ingenuity;
• undermine the ability of small companies to compete against large corporations, as well as the ability of American businesses to compete with foreign companies;
• undercut domestic industry and open the floodgates to pirated products from offshore;
• significantly damage the US economy at large and ultimately have devastating consequences for American competitiveness in the global economy;
• damage universities, research laboratories and small R&D companies, which all derive significant revenues from licensing their patents;
• destabilize pharmaceutical companies and destroy the biotech industry that lives and dies by its patents, which eventually will lead to a drying up of the pipeline of new drugs and diagnostic tools;
• dry up venture capital investments in start ups - the future of our economy.
In the interest of American inventors, researchers, innovators, entrepreneurs and the American people as a whole, I urge you to vote against this bill.