Guest Column: “America Invents Act Will Slow Investment”

Veteran IP Exec Says Patent Bill Will Have a Strongly Negative Impact on Economy & Jobs –

America Invents Act Will Encourage Anything But
by Irving S. Rappaport

The recent passage of The Leahy-Smith America Invents Act of 2011 is a blow to innovation and U.S. innovation investment, as well as to the economy as a whole.  This inaptly named bill will have the exact opposite effect of what its title suggests.

As a result of the changes in the law, the Patent and Trademark Office (PTO) will become more dysfunctional than it already is.  It will be buried under an avalanche of additional work for which it will receive no additional resources or funding.

Continuing diversion of PTO fees will further cripple the PTO under an ever-growing mountain of work.  I believe fee diversion is unconstitutional.  The fees are not public monies, but belong to the patent applicants.  There is no statutory  basis for Congress to take these funds.  It represents an unauthorized tax on innovation.  Yet the politicians all claim that they are unwilling to levy new taxes.

Sec. 18 essentially guts any patents relating to the financial industry.  I believe this provision is discriminatory and unconstitutional as it unfairly favors a particular industry by making it necessary for inventions relating to the financial industry to overcome more obstacles than any other type of inventions.  I think this provision will be challenged in the courts and may well be overturned.  Just as the banks were let off the hook for the 2008 meltdown, the financial industry is being given a free pass on financially related patents.

First to file will definitely favor the big companies over individual inventors and small companies.

The Post Grant Reviews allow prior art in the form of prior use and public disclosures to be presented before the PTO, even though the PTO is not set up for handling that kind of evidence.  All software and business method patents have become weaker and less likely to be found valid.

Because there are so many changes in the new law, it will take the courts 10 to 15 years to sort out what these new provisions really mean.  I believe the PTO will have a difficult time coming up with a meaningful definition of “technological invention” under Sec. 18.

Infringers are going to have a much easier time avoiding liability and patent owners are going to have a much more difficult time getting their patents through the morass at the PTO and greater difficulty in enforcing their patents.

Overall, the U.S. Patent System has been dealt a serious blow, significantly weakening it for years to come. Not only will this new patent law fail to create more innovation and investment in innovation, but it will also destroy more jobs and discourage individual inventors, as well as investments in innovation.  Additionally, this comes at the worst possible time when the U.S. economy is on the verge of going into another deep recession, if we are not already in recession.

The infighting among individual Senators and Representatives to get their favors in the bill for specific companies and industries is shameful and disgraceful.  The manner in which this patent “deform” legislation was passed represents a microcosm of what ails our current economic, financial, and governmental systems – they all no longer work because the special interests are totally in control of the country.

Although the entire system is in gridlock, hopefully the voters will decide to take this country back from the special interests.

Primary image source:                                                                                                   ___________________________________

Irving Rappaport has served as the head of IP departments at Apple, National Semiconductor and Medtronic, and held significant positions at Data General and Raytheon. He was recruited by Bally-Midway to chase Pac-Man clones during the first video game revolution, and came to Silicon Valley as Associate General Counsel for Intellectual Property and Licensing at Apple, where he built its IP department (1984-90). Irving also was a consultant to Intel and was responsible for suggesting the much copied Intel Inside® campaign. He has served as an expert witness in 32 cases and is a co-inventor on 16 U.S. patents. Earlier in his career he served as a USPTO patent examiner and a U.S. Army officer.

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