January 05, 2006, 10:31 AM — As several technology trade groups call for patent reform from the U.S. Congress this year, some individual inventors say changes to patent law will hurt them while helping huge companies.
Groups such as the Business Software Alliance (BSA) and the Information Technology Industry Council (ITI) advocate changes to the U.S. patent system, including a change to current legal precedence requiring courts to issue injunctions against accused patent infringers in most patent lawsuits. For many technology vendors, injunctions require them to stop selling the product containing the infringed patent.
The Patent Reform Act, introduced by Representative Lamar Smith in June, would require courts to consider whether the patent holder would suffer "irreparable harm" without an injunction. Smith, a Texas Republican, said in June the bill would "eliminate legal gamesmanship from the current system that rewards lawsuit abuses over creativity."
The quality of patents has been a big issue in the IT industry for years. In 1999, Amazon.com Inc.'s patent for a one-click shopping service was questioned by many Internet activists.
But some small inventors say changes proposed by Smith and several tech trade groups will make it easy for large companies to ignore them when they try to enforce their patents. "(Large tech vendors) don't like independent inventors nipping at their heels," said Ronald J. Riley, president of the Professional Inventors Alliance. "Companies went to Congress and said, 'Because we can commercialize faster than the inventor, he's a low-life or a troll.'"
The issue of patent injunctions has been in the news recently after BlackBerry handheld maker Research in Motion Ltd. (RIM) was sued by NTP Inc. over NTP patents related to wireless e-mail over mobile devices. The case is ongoing, but one possible outcome is that RIM could be forced to stop selling BlackBerry devices in the U.S.
In March, executives from Microsoft Corp., a member of both BSA and ITI, called for patent reform, saying the U.S. Patent and Trademark Office (PTO) needs more funding. The number of patent lawsuits in the U.S. has risen from about 1,000 in the mid-'80s to more than 2,500 in 2002, Microsoft said.
Riley's group agrees the PTO needs more money, and his group has joined tech trade groups in calling for Congress to stop patent fee diversion from the PTO to the U.S. government general fund. Other than fee diversion, "there's nothing in their agenda that in my feeling has merit," Riley said of the tech patent proposals.
Besides addressing court injunctions, Smith's legislation contains several other changes to patent law. It would create a program allowing interested parties to challenge patents after they've been granted, and it would limit patent violation awards in lawsuits. The bill would also allow members of the public to file documents showing a patent isn't valid because of "prior art" invented by someone else.
Riley's organization, which has been operating in a low-key mode for a couple of years, is gearing up again to fight some patent reform proposals, he said.
Without strong injunctions in patent lawsuits, a large company that uses a patent without permission has little incentive to negotiate with individual patent holders, Riley said. Without the injunctions, the companies basically have a license to steal an inventor's property, Riley said.
Owners of patents should have the same rights as any other property owner -- to decide who has permission to use the property, he added. Without an inventor's ability to get an injunction, "that's a compulsory license -- that's a taking of property," said Riley, who founded the Professional Inventors Alliance in the early '90s. "No where else in our legal system do we allow a taking."
Tech trade groups such as BSA and ITI argue the near-automatic injunctions reward so-called "patent trolls," people who buy patents for the sole reason of charging license fees. Many people who buy patents have no intention of selling products using the patents, tech groups complain.
Many technology products contain dozens or hundreds of patented items, and IT vendors can unintentionally miss a patent when putting a product together, said Emery Simon, counselor to the BSA. While many patent claims are legitimate, "unfortunately, some of that is just people looking for a quick buck," Simon said.
"There's nothing companies hate more than unpredictability," Simon added. "Injunctive relief poses a very disruptive force to our industry."
