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In patent debate, small inventors deserve a seat at the table

The perception, for good reason, among a vast majority of the American public is that Washington too often does the bidding of big business.  Deploying lobbyists, writing big checks, and bringing high profile CEO’s in to the capital gets attention and gets action.  We’re seeing that playbook in action today as many of the leading big businesses in the tech industry conduct their annual fly-in under the banner of one of their many associations – TechNet.

As TechNet, which represents companies like Google, Microsoft, Facebook, Apple and many others, brings in leading executives, they will be sure to push members of Congress on one of their pet issues – comprehensive patent reform.  While members will get an earful on the issue from the tech behemoths today, it’s the small businesses and individual inventors they should be listening to on the issue.   Unfortunately, we don’t have the same lobbying power, big name CEO’s or campaign contributions to match them.

{mosads}What we do have, though, is the facts.  And the fact is small businesses are leading the nation in innovating and creating new ideas, which lead to jobs and growth.  According to the Small Business Administration, “Of high patenting firms (15 or more in a four‐year period), small businesses produced 16 times more patents per employee than large patenting firms.”

In a departure from corporate policies of twenty years ago, many of the nation’s leading companies now have open innovation programs where they allow individual inventors to submit ideas.  In the past, I have worked for a few large companies in the consumer package goods area and I now patent ideas on speculation for their consideration. The proposed legislation includes provisions for “loser pays” that could make the much smaller independent inventor responsible for a much larger corporation’s legal fees. The result of this will be a dramatic shift in the game rules that I and others who submit their ideas operate under as cost effective ways to protect a patent in court will be virtually eliminated.

To innovative small businesses, patents are often the lifeblood of our creativity and our survival.  The certainty, spelled out in the U.S. Constitution, that our ideas are our property and that we have the right to profit from them and protect them, is what gives entrepreneurs the confidence to take the risks to bring new inventions to market.  As inventors try to raise capital and find investors, the first question we are often asked is what patents we have and what our patent strategy is.

A wrongheaded patent reform bill – like the Innovation Act – that makes it harder for us to defend our patents will be devastating to small inventors and to the larger economy.  As the Small Business Technology Council recently wrote on the legislation, “For small business, patents will become mostly unenforceable due to the proposed much higher upfront cost of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation.”

For the large companies lobbying Capitol Hill today, these changes will likely be very beneficial.  Driving down the cost they pay of using other people’s technology will be a windfall.  That is why they are pulling out all the stops to make their voices heard.  Ultimately, any unintended consequences for them can be dealt with given the size of their bank accounts and armies of lawyers and finance departments.  For the individual entrepreneur or the small business person, that is not the case.  The unintended (or perhaps intended) consequence to us means fewer employees, bankruptcy or products and ideas that never see the light of day.

Certainly, there is room for some targeted and common sense reform.  As Sen. David Vitter (R-La.), chairman of the Small Business Committee said at a recent hearing, “I fully support bringing the patent discussion forward to address specific, targeted legislative fixes……it would be similarly disturbing if we uprooted a major portion of the us economy to address harmful behavior from a few bad actors.”  We must avoid rushing into a giant reform that undermines our current patent protections is not the right path to take.

As members hear from the big CEO’s who have flown in today, they should not be focused on the impact on big businesses, but instead think about the garage inventors and the small businesses in their states and districts who would be harmed by a reform that undermines our patent system.   As we think about America’s innovation culture as the envy of the world, let’s remember them and ensure that we do no harm.

Lyon of Minnetonka, Minnesota is an independent inventor specializing in consumer packaging function and design.

Tags David Vitter

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