Patent Provisions ThreatenTo Send Inventors Back To The Drawing Board
Friday, November 09, 2007SUSIE GHARIB: There's legislation in the works on Capitol Hill to modernize the U.S. patent system. Congress hasn't updated it in more than 50 years. The House passed its version of the bill in September and the Senate is expected to vote on the measure by the end of the year. But as Dana Greenspon reports, independent inventors worry the new law could work against them.
DANA GREENSPON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Frampton Ellis has his hand in what a lot of people put on their feet. More than a decade ago, he set out to invent a curved shoe sole that minimizes ankle sprains.
FRAMPTON ELLIS, INDEPENDENT INVENTOR: This is the first professionally made prototype.
GREENSPON: One eureka moment and many hours of tinkering later, he scored a patent and licensed his invention to Adidas, giving him a foothold in the shoe industry. So everything here, everything we're looking at in this case uses the technology that you patented?
ELLIS: Yeah, I think so. And they made many more shoes than this, actually.
GREENSPON: But he says the current patent reform bills moving through Congress would create hurdles for inventors like him.
ELLIS: If the patent system was changed as it's currently proposed, it would basically terminate the careers of most independent inventors. It would force them out on a cost basis.
GREENSPON: In particular, freelance inventors worry about a provision that would make it easier for other companies to challenge a patent's validity repeatedly over the course of the patent's life. That would delay an inventor's ability to recoup costs and it could create an additional financial burden. Another provision would strictly limit the amount of money an inventor could be awarded in a patent infringement case. Companies like Microsoft and HP support the legislation. HP's Michael Holston says the changes aren't meant to push out the little guy, but rather to dry up the flood of litigation companies like his have faced for years.
MICHAEL HOLSTON, EVP, GENERAL COUNSEL, HP: In the last 14 years the number of patent lawsuits that are filed in the United States has tripled. And we and most large companies are under attack and expending tremendous amounts of money defending these cases.
GREENSPON: HP spends about $50 million a year defending patent suits. Many are brought by so-called patent trolls, people who buy up patents from bankrupt businesses, then bring infringement cases against big companies. But patent attorney Robert Sterne says the legislation may push the system too far in the other direction. He says those infringement issues have already been dealt with elsewhere.
ROBERT STERNE, PARTNER, STERNE, KESSLER, GOLDSTEIN & FOX: My concern is that with all the changes at the supreme court and at the patent office that the patent system could be severely damaged in terms of its effectiveness for the little person, the innovator.
GREENSPON: Even independent inventors like Ellis admit the patent system is flawed and needs tweaking. But he says the current legislation could prevent the next Google or Apple from getting on its feet. Dana Greenspon, NIGHTLY BUSINESS REPORT, Washington.
