So-Called Innovation Act Will Squelch Innovation | Commentary
Three years ago, Congress changed American patent law from a “first to discover” to a “first to file” system. Now, without waiting for these changes to be fully absorbed, some members of Congress are proposing additional changes that would impair the culture of innovation that makes America the place where someone is always trying to build a better mousetrap.
Paradoxically named the Innovation Act, supporters of HR 9 claim they want to reduce frivolous lawsuits on intellectual property rights. Unfortunately, its broad terms would throw a wet blanket on the greatest sources of innovation and path-breaking research this nation has — American universities and small entrepreneurial startups.
Supporters of the act target “non-practicing entities,” claiming that nefarious individuals should not be allowed to claim the rights to inventions when they don’t manufacture anything. They pejoratively refer to these people as “patent trolls.” While we can all decry the practice of making spurious patent claims to exact tribute, this act would classify pretty much every university in America as a “patent troll” and turns the history of American innovation on its head.
Universities don’t manufacture products; We license our intellectual property to others or partner with businesses to get inventions to the marketplace. In my experience, very few inventors and scientists make great business executives. Finance, marketing, personnel management and manufacturability just aren’t their areas of expertise. That is certainly broadly true among university faculty.
Under our Constitution, the rights to discoveries belong to inventors. It was a novel idea when the Constitution was written and is deeply connected to our inalienable right to pursue happiness. The fruits of discoveries belong to the inventor — not to the crown, or to the industrialist, but to the inventor.
The bill would require the courts to shift the costs of patent litigation to the losing party unless some vague criteria are satisfied. This provision significantly increases the risk of trying to defend legitimate patent claims and puts public universities and entrepreneurial startups at a significant disadvantage.
A few years ago, our provost was a witness in a trial on patent claim by Yale on a technology that helped sequence the human genome. Yale and its faculty member won after 10 years in court. By then, the technology had moved on. But if a university risks having to pay all of the expenses of a patent trial, we will be less likely to take up the fight. That means university research will be a great target for companies seeking to capitalize on innovations that aren’t their own because we don’t have the deep pockets to take the risk and fight back.
But it’s worse than that. The Innovation Act has a provision called “involuntary joinder” that could force universities that have patent portfolios into lawsuits and force them to absorb the cost of litigation completely involuntarily. The consequence is that universities will have to reconsider whether they will even disclose their discoveries or seek the protection of patents at all.
Recent court decisions and new rules of federal procedure have addressed the issues the Innovation Act portends to solve. There are bad actors out there who file frivolous suits with spurious claims in order to secure settlements from companies that don’t have the time to wait and fight it out. Further vague legislation at this point will not be helpful to the cause of those who truly want to spur American innovation.
Over the past three years, from our research university in the Rushmore region of South Dakota, we have filed 21 patent applications. Four patents have been issued, seven licenses have been executed and two new startup companies launched.
For a university of our size, that is quite a lot of innovation. If the Innovation Act becomes law, universities such as ours will have to rethink whether we can take the risk of patenting our better mousetrap.
Heather Wilson is president of the South Dakota School of Mines & Technology in Rapid City and a former member of Congress representing New Mexico.