Carly Fiorina, former Hewlett Packard CEO, and now in the midst of challenging for the Republican Presidential nomination, spoke at the Iowa State Fair this week, specifically touching on the patent reform bill in Congress right now. She said the bill would harm the small innovator and she has lobbied against the bill for many months.

The U.S. economy is plodding along amid turbulence around the globe, a sign of its relative strength despite mounting questions about its long-term vitality (Wall Street Journal).

The American economy delivered pretty much what was expected last month in terms of hiring, giving the Federal Reserve one more piece of evidence that conditions are strong enough to support an increase in the interest rate (New York Times).

Iowa State Senator Jeff Danielson recently wrote a piece on patents:

“Sound patent policy, which encourages the nexus between risk and ideas (especially for small entrepreneurs), makes invention profitable. In Iowa, many of our best ideas begin small and grow allowing us the opportunity to dream and then make those dreams a reality. The U.S. patent system enables that dream by protecting the market an invention creates long enough for the inventor to gain a toehold against competition, and by creating a property right capable of attracting critical investment to bring the invention to market and grow the business.”

Read the full article at IPWatchDog.

Anyone who has observed the current evolution of patent “reform” could not help but observe that the effort has been very one-sided. The proof is that inventors, the very group the American Patent System was created for, have been shut out of hearings. In the Senate, The PATENT Act got through the markup without a single inventor being allowed into a single hearing. For the House’s Innovation Act, only one inventor was allowed into a single hearing.

When such a bias exists, the possibility of unintended outcomes increases. An example of what can result is a shocking piece of text I recently found hidden within H.R.9:

“Section 273 of title 35, United States Code, is amended by striking subsection (f).”

The text provides no further explanation, giving the impression that this is unimportant. However, this sentence removes the penalty to a guilty patent infringer who has asserted false claims regarding prior use in a patent infringement case.* This appears to be a blatant attempt to remove the disincentive to the stealing of another’s legitimate intellectual property.

Is the purpose of H.R.9 to further enable the theft of legitimate intellectual property? That certainly is not what its proponents claim. Yet the language above does nothing else. Are there other sentences like this hidden in H.R.9? How did this get into H.R.9? Why is this also in the Senate’s PATENT Act?

The potential unintended consequences of this legislation are catastrophic to vital American innovation. The Innovation Act, H.R.9 and The PATENT Act, S. 1137, should be dropped and a truly balanced effort to handle any actual problems within the critically important American Patent System should be undertaken.

*Section 273 is “Defense to infringement based on prior commercial use.”

Subsection (f) is “Unreasonable Assertion of Defense— If the defense under this section is pleaded by a person who is found to infringe the patent and who subsequently fails to demonstrate a reasonable basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section 285.”

The sentence above wherein subsection (f) is striken is found on page 7, lines 3-5 of the Managers Amendment version of H.R.9.

The anti-inventor lobby conducted a panel discussion on Monday July 20 in support of H.R.9.  The crux of this panel was to show that patent litigation has increased thus it is urgent for Congress to pass H.R.9 now.  Unfortunately, the data they cite does not support their conclusion.

The ant-inventor lobby’s misleading invitation to the panel discussion cited in a “study” by Lex Machina:

“Rep. Zoe Lofgren is hosting a broad coalition of retailers, technology companies, home builders, manufacturers, food industry, and startups to discuss how H.R. 9 puts an end to malicious and unfair litigation practices, while preserving strong patent rights for companies that bring real innovation to our economy.

Patent trolls are paper companies that don’t invest in R&D, don’t manufacture goods, don’t provide services and don’t sell products, but exist merely to extort money from real businesses by threatening expensive litigation over dubious and fraudulent patent claims.

With a recent study showing that more patent lawsuits were filed in the first 6 months of 2015 than ever before, and that 68% of these suits were brought by patent trolls, it is more important than ever that Congress act quickly to stop patent trolls before more small businesses are bankrupted, or more R&D funds are wasted.”

It is clear the anti-inventor lobby’s strategy is to mislead Congress to pass legislation that eliminates “patent rights for companies that bring real innovation to our economy”.

The word “study” implies factual analysis; however, Lex Machina simply provided bare data and graphs with no analysis.  Lex Machina’s data is certainly important to informing the patent reform discussion so that Congress comes to a reasoned and fair conclusion.  But data is nothing but data, and many questions must be asked and answered to develop actionable information in the form of a “study”.

• What is a patent troll?  Lex Machina data says nothing.  The Google lobby cynically defines a patent troll as pretty much anyone who asserts a patent, which not only includes independent inventors, but also investors who invested into a company that failed due to massive theft of patent rights by large companies like Google.
• Who are the so-called patent trolls?  Lex Machina data does not inform us.  The ten-year war on inventors has made it very difficult for an inventor to defend patent rights, so many sell patent rights to someone who can.  In most cases, these “paper companies” represent the interests of inventors whose patented inventions have been stolen by large corporations.
• Are the defendants in fact “small businesses”?   The anti-inventor lobby says they are, however the Lex Machina data is silent.  Plaintiffs know that even a small defendant can file an IPR created under the America Invents Act, which is invalidating three quarters of the patents it sees.  The cost of a patent suit is measured in the millions of dollars and nobody files a lawsuit if they cannot get at least the cost of the suit returned.  Since a license represents only a small percentage of the total sales revenue of an infringing product, it is unlikely these cases are against small companies.  The stronger argument is the suits are against large companies.
• Are the lawsuits “dubious and fraudulent”? Lex Machina says nothing about merits.  However, the anti-inventor lobby tells us the lawsuits are “dubious and fraudulent”.  Today, attorney fees are shifted to the plaintiff for frivolous cases at a high rate.  If someone files a frivolous suit, they subject themselves to millions of dollars of risk in fee reversal.  A more logical conclusion is these lawsuits are meritorious.

The Lex Machina data shows that plaintiff count is down in relation to the number of lawsuits.  In other words, there are more infringers per patent.  A better guess at the meaning of Lex Machina’s data is that patent rights are no longer respected and thus are stolen by more companies.

If a real study were performed, the Lex Machina data is much more likely to show that theft of patents by large corporations has risen dramatically, and once stolen, inventors have no options but the courts to defend patent rights.  It is a measure of corporate theft of patented property from inventors who are defending their property rights – not, as the anti-inventor lobby would have us believe, of frivolous lawsuits by a cartoon character.

Inventors from around the country will be displaying quirky inventions at the GeekWire Summit in October:

“One of our favorite parts of last year’s GeekWire Summit was the introduction of a new segment we called “Inventions We Love.”

Five entrepreneurs with especially geeky products — from smart socks to asteroid mining drones— took the stage for three-minute pitches and some light-hearted banter from Todd Bishop and me.

“Inventions We Love” was so well received, that we’ve decided to expand the program this year at the 2015 GeekWire Summit, taking place from Oct. 1-2 at the Seattle Sheraton. This is our biggest event of the year, and provides an incredible opportunity for tinkerers and innovators to showcase those oddball inventions in the garage.”

For more information on the competition and Summit, click here.

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