Tuesday, September 11, 2007
House Bill Weakens US Patent System and Hurts Entrepreneurs
General Patent Corporation Chairman Alexander Poltorak, a national expert on the U.S. patent system and author of two books on intellectual property, condemned the House of Representatives' passage this afternoon of the patent reform legislation and its amendments.
(PRWEB) September 9, 2007 -- General Patent Corporation Chairman Alexander Poltorak, a national expert on the U.S. patent system and author of two books on intellectual property, condemned the House of Representatives' passage this afternoon of the patent reform legislation and its amendments.
"The passage of the amended Patent Reform Act of 2007 in the House of Representatives is a severe threat to our entire patent system," Poltorak said. "As a whole it means weaker protection for smaller inventors and entrepreneurs across America."
"The bill undercuts domestic industry and hurts independent inventors - the very backbone of American ingenuity," Poltorak said. "The House bill renders patents nearly worthless, which will consequently weaken the incentive to innovate. It will stifle innovation and entrepreneurship."
Congress should instead consider a two-tiered patent system that creates different levels of patent standards with different rights for each type, said Poltorak, whose company has helped defend the individual patents of hundreds of small American inventors over the past 20 years. A two-tiered system, which has proven successful in much of Europe, would reduce the backlog of pending patent applications and also minimize patent litigation, Poltorak said.
Poltorak, a former Russian dissident who fled the Soviet Union with his family in 1982, founded General Patent Corporation in 1989 after using his background as a physicist to develop and patent technology for computers and laptops. He has successfully defended patents against business giants such as General Motors, Kraft Foods, I.B.M. and Motorola. He is the co-author of Essentials of Licensing Intellectual Property (2004) and Essentials of Intellectual Property (2002), both part of a series.
A complete version of Poltorak's statements follows.
Poltorak is available to comment on today's House vote. Please contact Dave Closs at Zlokower Company at 212-447-9292 extension 12.
Statement by Alexander Poltorak on the Patent Reform bill
Alexander Poltorak is the chairman and CEO of General Patent Corporation Chairman, a 20-year-old intellectual property management company that advises entrepreneurs on licensing and patent enforcement. Dr. Poltorak is a national expert on the U.S. patent system and author of two books on intellectual property.
"The Patent Reform Act, as passed in the House, undermines the ability of small companies to compete against large corporations. The bill undercuts domestic industry and hurts independent inventors - the very backbone of American ingenuity.
"The bill renders patents nearly worthless, which will consequently weaken the incentive to innovate. It will stifle innovation and entrepreneurship. Small high-tech companies, the true innovators in this industry, overwhelmingly reject this proposal.
"The statute defines a patent as the right to exclude others from using, making, selling, offering for sale or importing a patented invention. However, with the Supreme Court decision on eBay striking down the Federal Circuit rule of automatic injunction, there are, in effect, no teeth left in the right to exclude.
"The apportionment of damages provision of the Bill not only chips away at the economic value of patents but cuts to the heart of what the patent is - the right to exclude from making, using and selling. If one sells an infringing product one has to pay damages. If damages are nominal, why not infringe? An attempt to dramatically diminish patent damages devalues all issued and future patents.
"A patent is a bargain between the inventor and the State. To induce an inventor to disclose his or her invention to public, the State promises in exchange a grant of limited monopoly. But with the average cost of patent enforcement at $4 million, this right remains academic for most inventors. This bill will make it even more difficult to enforce a patent.
"A self-proclaimed goal of this patent reform is to decrease patent litigation. Lawmakers apparently forgot that a patent, by definition, is little more than a license to sue ("right to exclude") and decreasing patent litigation by making it more difficult and expensive makes patents largely unenforceable and, therefore, worthless.
"In 1998, Congress passed a copyright term extension act, which extended the length of a copyright's terms by 20 years. That act was pejoratively called the Mickey Mouse Protection Act because it was pushed by Disney lobbyists seeking to prevent the expiration of the Mickey Mouse copyright.
"Now, Washington lobbyists hired by Microsoft, Intel and other high tech giants are pushing through Congress the Patent Reform Act of 2007 - which should be called the "Patent Repeal Act" for its threat to our patent system.
"History will show these to be two diametrically opposite approaches to stripping away twin forms of intellectual property protection. It all depends on who's paying the bill.
Dr. Poltorak is available to amplify and explain any of the above statements or other aspect of the pending Patent Reform legislation. Please contact Dave Closs, 212-447-9292 ext. 12
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