On Patents, the Senate Did the Right Thing | Commentary
The triumph of deliberation in the course of making law nearly always draws praise from future historians, but it can be awfully unpopular amid real-time cries for change.
While proponents of quick-fix legislation express frustration over Senate Judiciary Committee’s decision to halt work on a bill, I see a legislative process alert to the risks involved in enacting wholesale change to the greatest innovation engine the world has ever known — the U.S. patent system — without taking the time to get it right.
Clearly, Committee Chairman Patrick J. Leahy, D-Vt., did the right thing in recognizing, as he put it, that provisions in the bill could hurt “the companies and universities who rely on the patent system every day to protect their inventions.”
Many lawmakers may have been unclear about the effects of legislation passed in the House and under consideration in the Senate, but they can look to two centuries of solid evidence testifying to the patent-system benefits at stake.
James Madison and other founders understood the importance of providing incentives for innovation, which is why they wrote into the Constitution protection for intellectual property and inventors’ exclusive rights to their creations for a limited time. Abraham Lincoln, another champion of the patent system and the only American president awarded a patent, recognized the role patents played spurring American economic growth and ingenuity, how they “added the fuel of interest to the fire of genius.” And Mark Twain, that prescient observer of life at home and abroad, wrote that “a country without a patent office and good patent laws was just a crab and couldn’t travel anyway but sideways and backwards.”
If Madison and Lincoln were around today, they would see that patent-fueled innovation continues to be a principal driver of economic growth and job creation. I think they would take pride in how much the rest of the world now recognizes that an efficient and balanced patent system is centered on strong patent protection that delivers innovation to the marketplace. As a 2012 study by the Economics and Statistics Administration and the U.S. Patent and Trademark Office reported, IP-intensive industries accounted for 40 million jobs, or 27.7 percent of all jobs in the U.S. economy, in 2010.
According to that same study, IP-intensive industries accounted for over $5 trillion in value added, or 34.8 percent of US GDP in 2010. The numbers aside, Presidents Lincoln and Madison would be astonished by the inventions kindled by the culture of innovation created by our strong IP laws — inventions like the electric sports car, 3-D printing, and even a tiny device designed by a small California company that, when placed in your cheek, can stop a headache with the flick of a switch.
As for Twain, I suspect he’d be having a field day poking fun at the stampede toward potential evisceration of IP protection in response to fears about “patent trolls.”
They may sound like characters from American tall tales, yet we know too well the term has become a popular pejorative for companies that don’t make products, and instead commercialize patents by licensing technology to practicing companies that manufacture products.
But Lincoln probably knew them by a different name. In the Civil War era, there were calls to deal with “patent sharks” who bought dormant patents on agricultural tools and threatened to sue farmers. Lincoln stood strong against calls to curtail the patent system because he understood American innovation has always been supported by a system treating intellectual property as property worth protecting. There have been many prominent inventors between Lincoln’s day and ours who would qualify in the minds of some today as a “troll” simply because they chose to license their patented innovative ideas rather than manufacture the resulting products.
The risks to such inventors — along with the businesses they found, the jobs they create and the technological progress they bring — are something neither the House nor the Senate has publicly examined in the face of urgent calls to pass a bill.
I am pleased to see patent litigation reform efforts now taking into account inventors’ concerns. And I hope lawmakers will now get a chance to read the Government Accountability Office’s recent and all-but-ignored patent-litigation report. The USPTO and courts are already making changes to fix problems in the law, the GAO found, and it noted that non-practicing entities are NOT driving the growth in patent litigation.
By examining the findings of Congress’s own investigative arm, lawmakers can ensure they do not overlook both the history of the patent system and its present as well.
These issues will undoubtedly come before the Judiciary Committee again, and perhaps sooner than many think. I am optimistic the result will be the better for the added deliberation, and can address the abuses we all would like to see eliminated without damaging the patent system for America’s vast array of good-faith innovators.
Now that they have more time to consider patents, I hope members will examine closely the innovation ecosystem this whole debate is about. As Lincoln knew, ours is a strong IP system that fuels the fire of human genius. It is this powerful incentive that has enabled our world to evolve into the amazing and technologically advanced place it is today.
David Kappos is a partner at Cravath, Swaine & Moore. He served as director of the U.S. Patent and Trademark Office from 2009 to 2011.