Sunday, June 29, 2008

Pearlstein on patent reform

Steven Pearlstein wrote of "patent reform 2008":

Consider the fate of a patent reform bill that has been on the agenda after years of complaints from inventors and high-tech companies about frivolous patents, endless litigation, excessive court judgments and conflicting signals from the federal courts.

Last year the House reported out a bill that would make it harder to get a patent but easier to challenge one while changing U.S. law to a “first to file” system that conforms more closely to patent rules in the rest of the world.

The legislation was a response to widespread complaints that by tilting too heavily in favor of existing patent holders, a patent system meant to encourage innovation was beginning to stifle it. To most neutral observers, the bill seemed to strike a reasonable balance between the need of industries that have business models based on breakthrough products that take decades to develop and those in which innovation tends to be incremental and products very quickly become obsolete.

So where is patent reform? Like so much other policy, it is stuck in the Senate. The problem is with a single line in the massive legislation that requires any damages awarded in a patent infringement case to be roughly proportionate to the importance of the disputed patent to the success of the overall product.

Although you rarely hear this from economists and business leaders, one big reason for the strength of the U.S. economy over the years has been that we have had a government willing to fix mistakes, respond to crises and adapt to changing conditions. Unless we recapture that ability to make Washington work again, it is a pretty good bet that, a generation from now, the next new thing will be developed somewhere else.

IPBiz suspects there were not many individual inventors within the Coalition for Patent Reform, or individual inventors that were aligned with the beliefs of CPR. The House (under the guidance of Berman) did not even let an individual inventor speak. Pearlstein does not have a clue of what was going on in "patent reform 2008."


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