Patent Law

A View from Tel Aviv

By Gary Odom and Jordan Kuhn

Bernard Frieder is a consultant to technology companies in Israel, miffed at the U.S. Congress for threatening to wreck the U.S. patent system with its Patent Reform Act of 2007.

Because inventors, research organizations and startup ventures around the world rely on US patents to protect the output of their labor, changing the US patent system has global repercussions.

Frieder in the Jerusalem Post, noting the "profound effect" that the Act would have:

Over the past 20 years, a significant proportion of the Israeli economy - and export growth - has been based on our patent-centric technology sector. From essentially a handful of companies, Israel has developed a world-renowned start-up culture and multi-billion venture capital investment engine. In fact, Israel is second only to California's Silicon Valley as a driver of global innovation... Israelis have more American patents, on a per-capita basis, than the citizens of any other country.

The proposed changes would greatly increase the costs of securing a basic US patent and expand filing requirements and processing time, thereby reducing a patent's term of protection. Also, a US patent would no longer be a secure asset since its validity could be challenged during the course of its effective life. There would be no closure. The potential for costly litigation would skyrocket and patent holders would be forced to "lawyer up" - to defend themselves... An established patent could be overturned on a technicality - even if the error was non-intentional and non-material to the issuing of that patent.

Calculation and allocation of damages would likewise be altered in ways that reduce compensation for those whose patents are violated. Deep-pocket challengers would be able to wear down smaller, financially vulnerable entrepreneurial companies, giving unfair advantage to the entrenched global companies over the upstart innovators.

Israel does not publish patent applications unless a patent is granted. Rejected applications are destroyed, allowing inventors to protect their secrets or try again. But this proposed change [to publish all patent applications] would make the US system like that of many other countries. The effect of this publication system in other nations has been devastating. Israeli inventors working in Japan, for instance, regularly have their ideas stolen by intellectual property pirates based in Korea, Russia, and China, who only need to access the Japanese Patent Office's Web site to get all the information they need to reverse-engineer and plagiarize someone else's creation before a patent has been issued.

[M]any of the provisions jeopardize technological progress. That's why various US groups including the National Venture Capital Association; 14 labor unions; the American Bar Association; the National Association of Manufacturers; the Association of University Technology Managers; and the Biotechnology Industry Organization have come out against this legislation.

Full post as published by The Patent Prospector on February 21, 2008 (boomark / email).