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 / Winter 2005 / Issue 41(originally published by Booz & Company)


As Patent Laws Weaken, Innovation Suffers

Prolific and controversial inventor Jerome Lemelson is often cited as the cause for the business community’s drive to weaken patent regulations. Mr. Lemelson, who died in 1997, had nearly 600 patents to his name, for innovations involving automation, computers, VCRs, toys, and much more. His patent applications were long, detailed, and so full of ideas that some were eventually divided into as many as 20 distinct patents.

Some of Mr. Lemelson’s patents took decades to issue. But when they were finally granted, the inventor gained exclusive rights to such ubiquitous technologies as barcode scanners and automated machine vision systems. From 1989 to 1997, with “submarine patents” — so called because they emerged out of nowhere, long after companies had adopted the technologies — Mr. Lemelson sued Japanese, European, and American automakers and electronics companies, among others, for patent infringement, ultimately receiving an estimated $1.5 billion in settlements. In January 2004, a surprise ruling from a Las Vegas district court invalidated his barcode and machine vision patents.

But the damage had been done. In 1995, just as Mr. Lemelson’s litigation was at its peak, corporate lobbyists convinced Congress to change the life span of patents to 20 years from the date of application. Previously, it had been 17 years from date of issue. Under the new rules, if a patent took 10 years to be approved, only 10 years would remain on it. This effectively crippled the possibility of a submarine patent, but also broadly weakened patent protection.

A 1999 law restored some protections but added the requirement that most patent applications be published within 18 months of the filing date, eliminating the secrecy that had always been associated with these documents. This exposes inventors when they are most vulnerable, before their ideas have generated revenue or even been awarded a patent.

And a proposed bill, the Patent Reform Act of 2005, would diminish patent rules further. Under this legislation, patents go to those first to file, rather than first to invent; companies or individuals can avoid paying royalties to inventors by claiming that they previously used the idea; and any party, foreign or domestic, can stall a patent indefinitely by asking for a reexamination.

Most observers would agree that companies need a viable way to respond to unjustified sneak attacks on their use of technology, but diluting patent laws is not the solution. A more thoughtful answer would be to give the Patent Office the resources it needs to eliminate harmful delays, and to return to fixed patent terms of 17 years from the date of issue, without prior publication, with one key caveat: If a patent has not been issued after three or four years, and if the delay is caused by the inventor, it should be published promptly. That way, companies will not be blindsided by outliers playing the system.

Perhaps with an approach like this we can return to a time when patents lived up to Abraham Lincoln’s lofty praise: In naming the most significant achievements in world history, he cited the “the art of writing and printing, the discovery of America, and the introduction of patent laws.”

Author Profile:

Robert P. Siegel ([email protected]), an inventor and consultant on innovation and intellectual property, holds 43 patents and is currently working on a biography of Jerome Lemelson.
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