Tag Archives: jobs

Passage of STRONGER Patent Act is likely to spur innovation and jobs

A bi-partisan bill introduced by Senators Coons, Cotton and others is one of the most important pieces of legislation for American competitiveness and innovation to come along in recent memory.

So why has it gotten almost no coverage from the leading business, technology and general news media? It may have to do with perspective, as well as how the media and its constituents wish readers to regard more certain patents, which are potentially more expensive to license.

Washington Examiner, IP Watchdog and a few others, who are generally pro-strong patents, provided extensive coverage. Others did not cover the STRONGER Patent Act at all.

The Hill ran the following headline: “Senate Dem Offers Patent Reform Bill.” It’s actually a bi-partisan effort, between Chris Coons (D-Del), and Tom Cotton (R-Ark), Dick Durbin (D-Ill), and Mazie Hirono (D-Hwi), and is supported by conservative members of the House, as well as business groups, like the Innovation Alliance, the Chamber of Commerce, inventors and others.

From 1st to 10th Place

The U.S. patent system is now ranked tenth worldwide by the U.S. Chamber of Commerce, in a tie with Hungary. Until this year, it had always been ranked first.

Mostly, the business, technology and general news media have been silent on the best thing to come out of Washington in support of U.S. competition and jobs in a decade. Conservative groups are supporting the bill. Internet and some large tech companies who favor weaker, less challenging patents are not likely to support the bill in its current form, and may try to oppose it.

“This bill is totally worth getting behind,” a Washington observer told IP CloseUp. “Reforming the PTAB and restoring injunctions, what’s not to like? Frankly, just the injunction issue alone gives Coons great leverage over all other legislation.”

Key points in the STRONGER Patent Act in its current form include:

  • Restore injunctive relief for infringed inventions
  • Reform unfair Patent Trial & Appeal Board (PTAB) reviews
  • Allow the USPTO to retain its fees for faster, higher quality examinations
  • Protect consumers and small businesses from patent abuse

This STRONGER bill is a more robust version of the Coons-proposed STRONG Patents Act that was introduced in 2015.

The Washington Examiner article can be found here. The IP Watchdog piece by Brian Pomper of the Innovation Alliance, hereFor the Hill article go here.

“Coons wants to get ahead of Goodlatte in the House and Grassley in the Senate,” the IP CloseUp contact said. “He would like to seize the momentum from TC Heartland (driving more patent litigation to Delaware) and encourage Republicans to join the cause. During last year’s campaign, Trump voiced pro-patent sentiments, a change from Obama.  Cotton is on board, and I hear that Kennedy [Louisiana] and others are interested and willing to go against Grassley.”

For a one-page summary of the bill, go here.

For a section-by-section review, here. 

For more on the subject of media coverage of patents, see the Center for Intellectual Property Understanding report, “Patterns in Media Coverage of Patent Disputes,” here.

Image source: cpip.gmu.edu; ipwatchdog.com

Up to $600 billion in U.S. IP is stolen annually by foreigners, says report

An IP Commission study finds that foreign sources, especially China, are responsible for the bulk U.S. theft.

Counterfeit goods, pirated software, and theft of trade secrets together represent a “systematic threat” to the US economy of between $225 billion and $600 billion annually, according to the findings of a 2017 research report from the bi-partisan IP Commission, The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy.

The massive theft of American IP—from companies and universities across the country, from U.S. labs to defense contractors, from banks to software companies—threatens the nation’s security, says the report.

The research, and update of a 2013 report, is the work of the bi-partisan IP Commission and was published by the National Bureau of Asian Research (NBR) NBR conducts advanced independent research on strategic, political, economic and other issues affecting U.S. relations with Asia, including China and Russia.

The Intangible Investor in June’s IAM features a full perspective on the report, “Foreign sources responsible for most IP theft.” Subscribers can find a copy here.

Pioneering Research

Kudos to the IP Commission for establishing a beachhead in the global war to combat IP theft and cyber crime. Its pioneering research provides American and other lawmakers, businesses, investors and the public, with data about IP infringement that are cannot be ignored.

However, the report falls short. Identifying and stopping infringement, including cyber-espionage, should not be restricted to sources outside of the U.S.  The IP Commission’s research zeros in on foreign counterfeit, trade secret and copyright violations. It does not account for increasing domestic patent infringement and copyright abuses, which have profoundly affected the software, recording and other industries, and impacted U.S. jobs.

To be fair, this IP Commission’s focus is foreign IP threats, and it is a daunting task to estimate the financial impact of domestic invention theft on U.S. businesses – not just what gets reported in the press about settlements and licenses.

But speaking to a range of IP attorneys and holders, it becomes clear that much IP abuse comes from domestic IT businesses, Internet providers, streaming services, individuals and others that know they are unlikely to be caught infringing rights or will have to pay for a license. By the IP Commissions own admission, IP theft is less benign than it might appear.

The theft of American IP is not just the ‘greatest transfer of wealth in human history,’ as General Keith Alexander put it; IP theft undercuts the primary competitive advantage of American business—the capacity for innovation.

Inspiration and a Challenge

The IP Commission’s timely report is a challenge to IP holders, and lawmakers alike who are concerned about innovation and commerce. It is a call to examine the source, type, and level of domestic IP rights theft, including patents, on SMEs, inventors, and universities, and how they affect the economy now and are likely to in the future.

The full 24-page update, The Theft of American Intellectual Property: Reassessments of the Challenge of the United States Policy, is well worth reading. Visit  www.ipcommission.org.

The original 2013 report, Report of the Commission on the Theft of American Intellectual Property, is also available and useful for comparison. 

Image source: ipcommission.org; linkedin.com

Gov’t study of economic impact of patent infringement is needed ASAP, experts say

There are abundant statistics on the cost of counterfeit goods, copyright infringement and even the negative impact of patent “trolls,” but nothing on the estimated extent of U.S. patent infringement and the cost in lost jobs, failed businesses and unpaid taxes. 

Global trade in counterfeits or fake goods, such as fashion, automobile parts and pharmaceuticals, has reached $600 billion annually, or about 5%-7% of GDP.  

The U.S. economy alone loses $58 billion each year to copyright infringement (2011 estimate) — crimes that affect creative works. That includes $16 billion in the loss of revenue to copyright owners and $3 billion in lost tax revenue.

The Recording Industry Association of America (RIAA) reports that the U.S. economy loses $12.5 billion in total output annually as a consequence of music theft and that sound recording piracy leads to the loss of 71,060 U.S. jobs, as well as losses in tax income.

Statistics on the cost of counterfeits and copyright infringement are conducted fairly regularly. There is even biased research on the cost of non-practicing entities. (Claims of $29 billion in damage from “trolls” are wildly inflammatory, says a former USPTO commissioner, which despite having been debunked are still cited by academics and reporters.)

Surprisingly, there are no estimates of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses, unpaid taxes and other economic impact.

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“There have been no studies that I am aware of devoted to quantifying the amount of patent infringement in the United States,” said Gene Quinn, patent attorney and publisher of IP Watchdog told IP CloseUp.

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“”It would be extremely helpful to get some kind of quantification of the amount of harm that befalls innovators through the concerted and calculated ‘efficient’ infrdataingement business practices of those who use technology and simply refuse to pay for their ongoing, and frequently willful, patent infringement.”

Tip of the Iceberg?

Patent damages paid may be the tip of the infringement iceberg. The real damage may be below the waterline.

To provide some context, 15 leading technology companies paid patent litigation damages of more than $4 billion over as 12-year period from 1996-2008.

That’s just a little over a dozen companies who had to pay damages. The figure presumably does not include settlements, licenses, and all of the times they and thousands of other businesses paid nothing for the inventions that they used.

The Impact of Undetected Infringement 

  • Today, with more issued U.S. patents, and much greater difficulty securing a license or winning a patent law suit, the amount of patent infringement that actually takes place but remains unidentified could exceed a trillion dollars.
  • There is no known government, academic or privately commissioned study of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses and economic loss.

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“It is not enough just to be aware that there is harm caused by undetected patent infringement,” said Paul R. Michel, Chief Judge of the Court of Appeals for the Federal Circuit (ret.). “The government needs to conduct a proper empirical study ASAP to determine its scope and impact.”

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Image source: ltrdigitalgroup.com

 

 

“Men of Progress” depicts U.S. inventing’s past, present and future

A group portrait honoring America’s rich invention history captures its greatest inventors in a moment in time that never occurred.  

The painting hangs in the grand, neo-classical National Portrait Gallery in Washington, once home of the United States Patent & Trademark Office. It depicts a symbolic gathering that honors America’s innovative past, while encouraging observers to speculate on its future.

Men of Progress (1862) is a study of how America saw its leading technologists in the 19th century. The romanticized gathering of great minds never took place but was a virtual product of artist Christian Schussele’s imagination, and patron Jordan Lawrence Mott, that took four years to compile from individual portraits. (This was almost a century and a half before Photoshop.)

800px-Christian_Schussele_-_Men_of_Progress_-_Google_Art_Project“Men of Progress”

The National Portrait Gallery is a Greek-revival building, whose beautiful restoration was completed in 2006, which housed the United States Patent Office from at least 1867 to 1932. (The official NPG history has the USPTO appearing in 1842, before construction was completed.) Work on the building was started in 1831.

For my thoughts about why Schussele’s vision of America’s visionaries remains timely, please read “Fathers of Invention” in the September IAM Magazine. Both print and digital editions are available.

Necessity and Ego

“If necessity is the mother of invention,” I write in the Intangible Investor, “then ego is the likely father. The U.S. industrial revolution spawned an innovation age prior to the Civil War that helped to transform the United States from a wannabe nation to one of greatness.

“In 1857 the inventor of a coal-burning stove, Jordan Mott, commissioned Alsace-born portraitist Christian Schussele to paint a group portrait of 19 U.S. scientists and inventors who ‘had altered the course of contemporary civilization’”.

Those depicted in the portrait had never met as a group. The artist sketched separate studies of each subject before combing them in his final, formal composition. Photoshop would have made it easier, but that was some 140 years in the future.

Fathers of Invention

The following list identifies the inventors and their primary contributions, starting from the left side (The Father of the Fathers of Invention, Benjamin Franklin, hovers on the wall in the background):

Dr. William Thomas Green Morton: surgical anesthesia
James Bogardus: cast-iron construction
Samuel Colt: revolving pistol
Cyrus Hall McCormick: mechanical reaper
Joseph Saxton: coal-burning stove, hydrometer, ever-pointed pencil
Charles Goodyear: vulcanization of rubber
Peter Cooper: railway locomotive
Jordan Lawrence Mott: coal-burning cooking stove
Joseph Henry: electromagnet design
Eliphalet Nott: efficient heat conduction for stoves and steam engines
John Ericsson: armored turret warship
Frederick Sickels: steam-engine gear and steering device for ships
Samuel F. B. Morse: electric telegraph
Henry Burden: horseshoe manufacturing machine
Richard March: rotary press
Erastus Bigelow: power loom for carpets
Isaiah Jennings: threshing machine, repeating gun, friction match
Thomas Blanchard: irregular turning lathe
Elias Howe: sewing machine

*****

I encourage those visiting Washington, IP professionals, inventors, and anyone interested in the great innovation history of the U.S. to stop by the National Portrait Gallery and take in this inspiring portrait. Admission is free.

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Image source: commons.wikimedia.org; Edward Sachse & Co., chromolithograph, c. 1857.

Latest SF Tech Boomlet Fuels Jobs & More

Jobs, Jobs, Jobs — & IP Deals, Too!

If a recent news article about the San Francisco economy is any indication, politicians may soon be campaigning not only on jobs creation but on IP transactions.

The Wall Street Journal writes about how SF is enjoying a mini-renaissance as a tech center. Web and digital media companies have begun to take advantage of low City rents and available talent.

Embedded in an easy to miss graph about jobs creation is an unusual statistic; something I don’t believe I’ve seen before and certainly not in the major business press. Included along with data showing an increase in more than 1700 IT jobs in 2008 and 2009: 100+ Intellectual Property Transactions.

That’s right, IP transactions. Do my eyes deceive me? IP regarded in the same context as job creation? For long-time IP evangelists it doesn’t get much better than this. (Well, actually, it can.)

WSJ’s data source is the Labor Department and the SF Office of the Controller. I wonder if the Controller is tracking transactions or WSJ added them. I doubt the Labor Department cares much about IP activity.

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This begs a question: What the heck does the WSJ mean by IP transactions? Patent licensing deals? Sales? Acquisitions? Copyright licenses on Web content? Venture capital raised?

VC Charles River Ventures is quoted in the article. They are an investor in SF-based RPX Corporation, a defensive patent aggregator that is said to be considering a public offering.

I don’t want to look a gift horse in the mouse. It’s great that a veteran reporter like Pui-Wing Tam, who has covered start-ups and VCs, had the foresight to include SF IP transactions with jobs growth. It would just be nice to know what they are.

As much as I condone their asendance, I’m concerned that “IP transactions” in general are too abstract to be linked to jobs as an economic indicator. We need to know how the term is being used and how transactions’ impact are being measured. Bravo, I think.

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P.S. – There is a reason for the accompanying scan. The soft piece, “Tech Buoys San Francisco,” at wsj.com for some reason dropped the “Growing Field” graphic that ran in the newspaper.

Pui-Wing told me that the graph was sourced to analysis that the SF Office of the Controller did of U.S. Bureau of Labor Statistics data.

Illustration source: The Wall Street Journal, 10/13/10 print edition


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