September 20, 2007, 2:43 PM — Patent reform legislation before the U.S. Congress would kill the value of patents and allow companies from other countries to steal U.S. intellectual property, a group of inventors said Thursday.
About 20 inventors and U.S. company executives, visiting Washington, D.C., encouraged Congress to defeat the Patent Reform Act, a version of which passed the House of Representatives earlier this month. The Senate has not yet voted on its version of the bill.
The legislation "will weaken the patent system," said Dean Kamen, inventor of the Segway and the AutoSyringe. "It will devalue patents. It will be a disincentive for people to invest in the future."
Several large tech vendors including Microsoft Corp., IBM Corp. and Cisco Systems Inc., support the legislation, which would allow courts to change they way they assess damages in patent infringement cases. Currently, courts generally consider the value of the entire product when a small piece of the product infringes a patent, and the legislation would allow courts to base damages only on the value of the infringing piece.
The legislation would also allow a new way to challenge patents after they've been granted.
Supporters say the bill is needed because patent infringement lawsuits have gotten out of hand. It's too easy for patent holders to sue and collect huge damage awards when a small piece of a tech product is found to infringe, supporters argue.
Microsoft this month praised the House passage of the legislation, saying lawmakers voted to "support American innovation and to preserve incentives for progress."
But Peter Volanakis, president and COO of Corning Inc., said the legislation would be an invitation for its competitors in Asia to repeatedly challenge his company's patents.
"This encourages infringement, plain and simple," he said. "It is much easier to infringe patents with this legislation."
The patent reform legislation would also "undermine" Corning's ability to invest in new products, Volanakis added.
Steve Perlman, inventor of WebTV and lead developer of Apple Inc.'s QuickTime, said he was surprised to learn of the legislation when he read of the House passage of the bill. As he's begun to contact lawmakers about his opposition to the legislation, their staffers are "stunned" to hear of tech startups that are opposed to the bill, Perlman said.
Small inventors and startups were mostly ignored during hearings on the bill, Perlman added.
One of the goals of the bill is to harmonize U.S. patent laws with the rest of the world. But the U.S. now has the best environment for startups and entrepreneurs, Perlman said.
"I don't want to have the startup economy they have," he said. "I want the one we have."
Perlman, founder and CEO of Rearden Cos., and Kamen, founder of DEKA Research & Development Corp., both said changes to the U.S. patent system are needed. But the legislation largely doesn't address the real needs -- more patent examiners and more money for the U.S. Patent and Trademark Office, they said. Perlman has a patent he applied for five years ago still awaiting examination, he said.
"Let's first make the system we've got today work the way it's supposed to work," Perlman said.
Congress should also wait to see the effects of a May 2006 Supreme Court ruling, in which justices overturned the long-held practice of issuing injunctions against infringing products in nearly all patent cases, Perlman said. That ruling should have a large effect on so-called patent trolls, he said.
"There already has been a huge change" in U.S. patent law because of the Supreme Court ruling, he said.
