McCombs School of Business
Knowledge

Patent Law: A Leaky Umbrella for Independent Inventors - Overview

Patents

Innovation, creativity and the patent process have always been at the heart of the U. S. economy. They have clearly contributed to the United States becoming one of the most economically and technologically advanced countries in the world. Today, the U. S. is in the process of moving from a manufacturing economy to a knowledge-based economy (KBE). This inexorable move is taking place primarily in the e-arena. The electronic transfer of information is rapidly and dramatically changing the rules of engagement in the global economy. This rapid change is straining the patent system’s ability to protect our country’s intellectual property, the very core of the emerging KBE. Intellectual property protection should be a major concern to all U.S. citizens, and particularly to the under-protected independent inventor.

In the early days of U. S. history, the independent inventor created the products and filed the patents that formed the basis for many of today’s large corporations. By the early part of the twentieth century, these large corporations had developed to the point where they presented formidable competition and actively opposed the independent inventor. This opposition, still prevalent today and intensified by the involvement of foreign companies, is based on espionage, frivolous lawsuits, and, in some cases, outright fraud.

The espionage problem is exacerbated by the advent of wireless computing technology in an outdated legal environment where electrons and photons belong to whoever intercepts them. The owners of trade secrets bear the responsibility of keeping them secret, but often do not realize the ease with which their secrets can be discovered. The United States government must update and actively enforce current privacy and trade secret protection. Congress should investigate passing laws to make it illegal for American competitive intelligence firms to spy upon American enterprises on behalf of foreign entities. Without such protection, the products of the U.S. KBE can be stolen and moved any place in the world … in seconds… at no cost.

A properly functioning patent system is vital to the well being of our country and its emerging e-culture. The patent system has now grown to the point that large corporations are better able to exploit its rules and, thereby, unintentionally threaten the country’s future success by placing the independent inventor at a disadvantage. It is imperative that the independent inventor be motivated to innovate. Patent reform is obligatory. The United States Patent and Trademark Office (USPTO) makes hundreds of millions of dollars in profit yearly by charging excessive fees to provide a constitutional right. Congress then diverts this windfall profit to other uses. This is equivalent to Congress charging a fee for free speech, and charging corporations twice as much as the individual citizen for a free speech permit. The effect of the double charge to corporations simply obfuscates the fact that the individual citizen is disadvantaged by this unconstitutional, hypothetical Charge For Free Speech act of Congress.

The playing field needs to be leveled. The independent inventor’s Constitutional right to exclude for a limited time must be protected by enforcement of the law. The independent inventor must not be economically forced to concede to large corporations because Congress extracts excessive fees that are used for other purposes. The Supreme Court needs to hear a relevant case and compel Congress to equate the fees charged for the patent service to the cost of providing the service. The independent inventor must be afforded equal protection under the law.