Patent News

May. 23, 2014

Contra Costa Times: Guest commentary: Congress must be careful with revise of patent law, by Darien Wallace

This post originally appeared in the Contra Costa Times on May 23, 2014.

Darien Wallace is a patent attorney who owns Imperium Patent Works, LLP in Pleasanton.

As an attorney who specializes in patent prosecution and litigation in Pleasanton, I am deeply concerned that Congress will pass legislation that could diminish the benefits of patents in this country.

The strength of our economy relies on developing new products through innovation faster than our competitors, who are able to manufacture established products less expensively than we can.

Truly innovative, disruptive technologies are typically not developed by large corporations, which have a financial duty to their shareholders to maximize the return on their existing businesses as opposed to cannibalizing their existing sales with disruptive new technologies.

In Silicon Valley, our patent system has been primarily an incentive system for small groups of individual inventors to receive a return on their novel ideas, even if they do not have the capital to build a factory or to develop a sales channel. Patents allow young businesses to grow despite being surrounded by tech giants with tremendous market clout. And patents have protected new inventions so that they have the opportunity to grow and develop into the products and technologies we use on a daily basis.

Current legislation is focused on trying to find a solution to the “patent troll” problem. Patent trolls have been defined as “non-producing entities” (NPEs). The attempt of this legislation to hinder patent infringement suits by NPEs actually ends up throwing the baby out with the bath water.

Most individual inventors are non-producing entities because they do not have the capital to build a factory or to develop a marketing network. Many research universities are also non-producing entities. When they first started out, many of the tech industry’s most successful innovators were also non-producing entities.

It’s critical that any legislation targeting patent trolls — bad actors that everyone can agree must be stopped — doesn’t snuff out future innovators. But legislation that would force a sole inventor to pay for a tech giant’s legal fees if the sole inventor loses a patent infringement suit will merely discourage innovation.

In addition, legislation that would hinder patent infringement suits brought by special purpose entities would also eliminate the primary monetization mechanism for small inventors who are unable to obtain sufficient capital or who are simply more skilled at innovating than at business.

To disrupt our innovation ecosystem with well-intentioned but counterproductive laws and procedures causes uncertainty and puts stakeholders on edge. Considering that California accounts for 25 percent of the country’s patents and Silicon Valley is the number one generator of patents in the nation (1 out of every 8 registered patents originates there), anything affecting the ability of California’s innovators to secure and monetize patents at a high and lucrative rate is cause for concern.

Our economy relies on incentivizing thousands of talented, young engineers in Silicon Valley to devote years of their lives to 18-hours days, thereby sacrificing their relationships and health, all for the dream of getting rich and famous through a successful high-tech startup.

Hindering their ability to assert their patents against established companies reduces the value of their startups and the incentive to innovate. Weakening the integrity of our patent system would have a direct effect on our global influence and attractiveness to innovators, not to mention the country’s ability to maintain a sound and robust economy.

So I urge the Senate Judiciary Committee to exercise prudence when they review this legislation in the coming weeks — something the House failed to do when they passed this bill in just 43 days late last year. It’s important to remember that patents are a safeguard guaranteed by our forefathers to ensure that innovators will always have the incentive to innovate and to propel our entire country forward. For the good of our country, lawmakers should carefully consider this legislation in order to preserve the integrity of our patent system.