From the Alliance

Mar. 4, 2015

Inventing America Conference Speakers Urge Caution in Making Further Changes to U.S. Patent System


Washington, D.C. – At a March 4 Inventing America Conference at the Newseum, speakers highlighted the critical role that the U.S. patent system has in driving American innovation and urged Congress to use caution in making further changes to U.S. patent laws. A video of the conference can be viewed at:

Here are some key quotes from the conference speakers:

Ambassador Carla A. Hills, former U.S. Trade Representative:
“We continue to be a leader in finance and we are the home of 17 of the world’s top 20 universities that attract more bright students from all around the world than any other nation. Heavily contributing to all of these strengths is that America continues to be one of the most innovative nations in the world and the foundation for that rests on our strong commitment to rule of law and our strong commitment to protecting intellectual property which dates back to our founding fathers…

“We need to take care that we do not erode the incentive to develop new ideas, techniques, and mechanics, nor the opportunity to license the know-how which supports the global technology leadership that benefits us so much. We must continue to respect the right of tangible and intangible property.”

The Honorable Heather Wilson, President, South Dakota School of Mines, Former Member of Congress:
“I am the president of the South Dakota School of Mines & Technology… In the last three years we have had 40 disclosures, we’ve had 21 patents filed and 7 patents issued. And in just three years, we’ve spun out four companies. And that’s just for a school of 133 faculty members, which is a pretty neat record. Those companies wouldn’t have existed unless the intellectual property was created which is done by research; and the universities do half of the research in this country.

“So for us, we teach and we do research and that research sometimes discovers new things. And on our campus, we have a business incubator. Over 50 of our students do internships and co-ops and work part-time in the incubator. And the incubator is full; it is full of new companies that are commercializing ideas that are coming out of universities. So it make a tremendous difference to the next generation of young engineers and scientists and to the creation of jobs in the Rushmore region of South Dakota.”

Bryan Pate, Co-Founder, ElliptiGO:
“The great thing about the patent system is it creates the ability to have a big win. If you have a big enough market and you can convince someone there is a shot here, that there is a 5% chance that we might be successful, but if we’re successful then we will be hugely lucrative back to you. Where it gets twisted is that I think the public just sees the lucrative winners of that lottery system and they think it is unfair. What it is really doing is inspiring other people to try.

“The patent system inspired us to play and to leave really good jobs and not to have an income for a year and to kick off this crazy bicycle concept. If there wasn’t potential for a good outcome, we wouldn’t have done that.”

Robert Kieval, LifeScience Alley Founder:
“For companies like ours that have developed, or are developing, a single product that doesn’t have alternative revenue streams, we are entirely dependent on outside investment for our continued existence. Thus far our work has required over $2 million in invested capital and put simply, intellectual property is our life blood. It is critical that our technology remains proprietary and protected by strong patents, because if it doesn’t, we wouldn’t be able to garner additional investment, innovation would cease, jobs would be lost and worst of all, patients would be denied access to breakthrough life-saving technologies. We are a small vulnerable company with just 61 employees and we rely on patents and a strong patent system to help protect our products.”

U.S. Senator Chris Coons (D-DE):
“Patents are not just foundational. Patents are about the American dream. And they are about what it means to come to this country, or be from this country, and believe in the possibility that you, or a team of folks you work with, could develop, invent and then protect a groundbreaking innovation…

“We need to both strengthen patents and target real abuse. They aren’t mutually exclusive. And that’s why I’ve introduced the Strong Patents Act of 2015 along with my great colleagues, Senator Durbin and Senator Hirono…

“Our goal must be to protect the patent system so that it works for everyone and so that future generations can use it as a platform for inventions and innovations that we can hardly dream of today.”

Former U.S. Senator Jon Kyl (R-AZ):
“The America Invents Act of 2011 is legislation that transformed a pretty burdensome and outdated patent system into a more streamlined and modern one and much more in line with our innovation economy today. As one of the authors of AIA, I would urge those pushing for change now to be careful and carefully consider the impact of additional changes.

“In particular, I find it hard to understand the notion that underlies the call for a wholesale change, the notion that the inventor must also have to be manufacturer and marketer for the invention to be protected. Because from the time of our founding all the way to our current time, our economy has flourished because of the laws of comparative advantage… The patent law must protect the property right throughout the process and should not be used to restrict and therefore reduce the value of a valid license to develop and to use the invention.

“There are always some who will abuse the system and I appreciate the efforts of my former colleagues who have this abuse in mind in their proposed legislation. But there is a saying that hard cases make bad laws. So I urge caution in the way that Congress proceeds here. We need to chart a course based on all thoughtful viewpoints and this should be a course that creates jobs, strengthens our economy and protects innovation. It mattes to our economy and it matters to the American entrepreneurs who have made our nation the most prosperous in mankind.”

Carly Fiorina, Chairman, American Conservative Union Foundation, and former CEO of Hewlett-Packard:
“When our Founders wrote the constitution they coupled this idea of everyone having God-given gifts, everyone having potential, everyone having the right to fulfill their potential and that right coming from God not being taken away by man or government, they added to that idea, this idea, that you own the product of your labors. That you own the output of your gifts. And they said, if you work hard and build something with your hands, you own it. And if you work hard and imagine something in your mind, you own it. It was, once again, a fairly radical visionary idea and it is why our Founders had the foresight to talk about intellectual property and patent protection all those many hundreds of years ago, because they understood that every human being has gifts and potential, every human being wants and has the capacity to live a life of dignity, purpose and meaning and in order to be able to do so, they must own what their gifts produce.

“So, as we are talking about patent reform, let us not forget how impactful that incredibly important insight has been in our nation’s history. Our nation has thrived because this is the country where virtually everything worth inventing has been invented. Think about it. Think about the inventions that have occurred here. Think about the people, whether it’s the cotton gin or the electrical light bulb. Think about the revolutionary inventions that were invented here, by people here. And the reason, of course, it happened here is because people understood that they would get to benefit. That, of course, the world would benefit from their inventions but that they would also get to benefit from the investment of their time and their talent and their treasure in creating something that would make life better for others but would also make their own lives better because they would be the owner of that output.

“…In other words, in order to invent you have to be inventive. In order to come up with something new you have to have a lot of imagination and a lot of creativity. You have to be willing to take risks and so me it is very logical that small an new businesses innovate at seven times the rate of big businesses, because sometimes a lot of money is less important to a big innovation than a really good idea and somebody with the passion to follow that idea… So as important as big companies are and big capital is to our economy, to job creation, to invention, the truth is and it has always been the case. The small inventor, the individual entrepreneur is even more important and we need to think about that as we think about that patent reform.

“…The Innovation Act, we are all for innovation. And, frankly, what happens frequently people hope you don’t read the fine print. Yeah, I’m for innovation. But the Innovation Act, while I am sure many of its sponsors and its supporters and its supporters have their hearts in the right place. Watch carefully, who is supporting that legislation. It’s not the small, it’s the big. It’s the big companies whose ongoing economic benefit depends upon their ability to acquire innovations and patents at a lower cost. If the Innovation Act were law tomorrow, Thomas Edison would be a patent troll. Really? Some of our greatest inventors would patent trolls under this law. Our universities would be patent trolls. We are fixing problems that don’t exist, we are boiling the ocean. And so as the Senator said, “I would urge extreme caution” and I would ask people to think carefully through the realities of who can handle big complicated pieces of legislation and regulation. Who is benefited by complexity and complication. It is not in the end the inventor or entrepreneur, it is not the new start-up, it is not the small business struggling to find its way, it is not an engine of growth and innovation in this country.

“…So let us be cautious and let us think very carefully. Let us perhaps, even if I may use the word, be humble. That our Founders had it right when they said that patents and intellectual property needed to be protected as a fundamental right of a citizen in this country. Let us be humble and cautious before we decide to boil the ocean and solve problems that maybe don’t need legislators to resolve them.”