“Innovation” is among the most highly prized civic and commercial virtues today. So much so that opposing sides in policy contests each claim its mantle.
Nowhere is this truer than in now-bubbling debate on Capitol Hill in Washington over patent reform. This isn't a battle of David against Goliath. It's a battle of Goliath against Goliath.
And the divisions aren't based on political party. In the Senate, the co-sponsors of the bipartisan PATENT Act are deep-red Republicans Orrin Hatch of Utah and Chuck Grassley of Iowa, and dark-blue Democrats Patrick Leahy of Vermont and Chuck Schumer of New York.
The bill, a convenient acronym for Protecting American Talent and Entrepreneurship Act, passed the Senate Judiciary Committee June 4 on a 16-4 vote. On Thursday, the House Judiciary Committee considered companion bipartisan legislation known as the “Innovation Act.”
The bills' target is that frequently derided species known as the "patent troll": those who use a bogus claim and impose a litigation toll on an innocent entrepreneur going about creating jobs and driving economic prosperity.
Instead of being divided by party, or even squarely by industry, supporters of these two measures, and their opponents, pit one view of "innovation" against another.
On the one hand are those Silicon Valley companies constantly making and remaking the tools of the digital economy. On the other hand are inventors who use intellectual property as an asset and license the manufacture of their patented devices to others.
Joining Silicon Valley stalwarts like Adobe in the battle against "patent trolls" are a number of Utah-based companies that have been pushing Hatch for years to lead the charge. Jonathan Johnson, chairman of Overstock.com, says that his company “has had a firsthand view of the havoc and destruction patent trolls cause by filing their abusive lawsuits. We've defended dozens of patent troll suits and expended approximately $11 million in associated defense costs."
Rebecca Jensen, CEO of UtahRealEstate.com, says: "This year, in one single day in April, patent trolls filed 184 lawsuits across the U.S. in a race against the much-needed protections the Senate's patent reform legislation would have provided to businesses."
On the other side of the innovation divide are research universities, venture capital, medical device and pharmaceutical companies and — most importantly — companies that have refined the patent-and-license business model, such as the San Diego-based chip-design company Qualcomm. This group now seeks to hold back the tide of sweeping patent legislation.
In a Wednesday statement against the Innovation Act of House Judiciary Committee Chairman Bob Goodlatte, R-Va., a group calling itself the "Innovation Alliance" joined a statement against the bill. It would "dramatically weaken intellectual property rights, harm U.S. competitiveness and undermine a patent system that has been critical to incentivizing innovation and job creation in our country for more than 200 years."
That both sides are so well-armed means a lively contest in Congress.
Contrast that with the debate two decades ago about whether to extend copyright terms by corporations from 75 years to 95 years. Wags dubbed it the "Mickey Mouse Copyright Term Extension Act" because it kept the cartoon character, who first appeared in movies in 1928, from falling into the public domain.
Copyright terms have successively expanded as the result of entertainment industry lobbying. In 1790, copyright terms only lasted 14 years! The length of term for patent protection, by contrast, has held relatively steady at between 17 and 20 years.
To get at the roots of these intellectual property debates, rather than getting lost in surface intricacies of patent litigation and defenses, we need to turn to the Constitution's Article I, Section 8, Clause 8. It granted Congress the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
Known as either the copyright or patent clause, the language in fact empowers Congress to promote progress by allowing the creation of intellectual property, so long as there are limits placed upon it. In this very important way, intellectual property is not the same as physical property.
As Derek Khanna writes in a report released Thursday by Lincoln Labs, a group promoting the advance of liberty through technology, “patents are one of the primary ways the federal government regulates innovation and technology throughout the economy, and today it more closely resembles cronyism rather than sensible policy.” Because a patent grants effective monopoly control over the use of a specific invention, Patent and Trademark Office examiners need to take care not to permit patents that allow overly broad claims.
I’m heartened that this contest is at least taking place. Organized interests from both sides of the innovation divide make it more likely that the compromise eventually emerging will, in fact, “promote the progress of the useful arts.”