Letter to Congress–December 4, 2013

Dear Congressional Representative:

We haven’t spoken before–I was President Obama’s student in Constitutional Law (University of Chicago School of Law, 2005).

I am writing you, because our patent system is broken, and the current system and proposed legislation (e.g., Innovation Act–HR 3309) fail to address our needs.  I propose a solution that can meet our needs (http://www.investinip.com/how-do-we-achieve-patent-reform/).

I would like for you to consider the ideas proposed here, and bring this up for discussion amongst policy decision-makers.

Our system is broken and, worse, we are failing to attack the fundamental problem behind patent trolling.  Instead of fixing trolling, proposed legislation will serve to weaken the American patent regime, undermining its ability to fulfill its Constitutional mandate. The effect will be to chill the incentive to invest in technological advances and entrepreneurial endeavors.

We must consider all perspectives before we make a decision to pass rushed bills, the economic ramifications of which have not been properly explored.

Admittedly, I am a troll–I monetize patent assets and have made a career of it (http://www.investinip.com/about-invest-in-ip/).

I’m here to tell you two things and ask for one: (1) the current legislation won’t stop trolling activity, (2) the current legislation and current-day system fail to meet a Constitutional threshold, and (3) there is a better solution that is incredibly simple, yet profoundly impactful to promote scientific and technological progress, as well as the Founding Fathers’ intent behind the Constitution’s Patent Clause.

(1) Current legislation won’t stop trolling

Now the trolling strategy will adjust to filing more patents in a single lawsuit–this is a power-in-numbers approach.  The more claims you assert, the greater the chances of one sticking.

If one valid claim is found to infringe, then the well-funded, multi-patent plaintiff can offset its own fees and go long for a full-scale jury verdict.

The current legislation won’t stop trolling, because the well-funded trolls will remain, they will file multi-patent lawsuits, and they will be willing to go the distance.

Defendants still face the risk of high patent-exposure, and will now be conflicted in terms of whether to fight to recover fees or pay to settle and avoid risk.

Hence, the current legislation will not solve the problem–litigation and trolling will continue, while smaller in quantity, it will be larger in scale and with greater risk.

(2) Current legislation fails to meet a Constitutional threshold

A patent owner’s “right to exclude” is a Constitutional protection afforded to all patent holders.  This is the fundamental backdrop that incentivizes investments into new technology and entrepreneurial endeavors–this is the backbone that supports scientific progress.

With a loser-pays system, it would undermine an individual’s or entity’s Constitutional right to enforce a valid and infringed patent against a multinational, well-funded corporation.  To illustrate, the proposed loser-pays system will chill investments into startup ventures and technological advancements, because the underlying patent assets would be more risky to legitimately enforce.

(3) The solution?

We need to fix our patent monetization system, not weaken our litigation system.

To start, what is the fundamental problem with our patent system?

Answer: our only recourse for monetization is through litigation.  This is problematic for several reasons, which I lay out here: http://www.investinip.com/how-do-we-achieve-patent-reform/

But instead of weakening the litigation system to curb litigation abuse, why don’t we create a better monetization system?

The model is simple–in fact, there are numerous asset classes monetized in the free market, the models for which provide a well-proven templates.

And solution is incredibly simple, yet profound: an open, free-market patent exchange.

Notably, such an exchange furthers our Founding Fathers’ intent behind the Constitution’s Patent Clause (see, e.g.http://www.investinip.com/patent-exchange-furthers-the-founding-fathers-intent-part-1-of-4/)

What is a patent exchange?  Why a patent exchange?  You can read more here: http://www.investinip.com/how-do-we-achieve-patent-reform/.

I am writing to you, because you swore to uphold the Constitution, and I believe it is your Constitutional duty to consider this perspective.

Not only will the proposed legislation fall short of meeting its real objective of curbing troll activity, but there is a downside we must consider, and it is our Constitutional responsibility to reflect upon its collateral effects.

I ask that you read the materials provided here, and help other policymakers consider a patent solution from another perspective–a more holistic perspective.

Thank you for your consideration.

Best,

Gau

2 Comments

  1. Author
    Invest in IP December 5, 2013 Reply

    The following Representative’s received the above letter (please excuse typos, these are my notes taken while sending blast emails at 4 AM CST last night):

    Martha Roby–Alabama
    Spencer Bachus–Alabama
    Eni S.H.–American Samoa
    Ed Pastor–Arizona
    Kyrsten Sinema–Arizona
    Tim Griffin–Arkansas
    Tom McClintock–California
    Ami Bera–California
    Jackie Speier-California
    Zoe Lofgren–California
    Devin Nunes–California
    Judy Chu–California
    Adam Schiff–California
    Brad Sherman–California
    Diana DeGette–Colorodo
    Jared Polis–Colorodo
    Ed Perlmutter–Colorodo
    John Larson–Colorodo
    Joe Courtney–Colorodo
    Jeff Miller–Florida
    Steve Southerland–Florida
    Corrine Brown–Florida
    Bill Posey–Florida
    Thomas Rooney–Florida
    Ted Deutch–Florida
    Lloyd Doggett–Texas
    Jack Kingston–Georgia
    Phil Gingrey–Georgia
    Raul Labrador–Idaho
    Mike Quigley–Illinois
    Cheri Bustos–Illinois
    Bruce Braley–Iowa
    Dave Loebsack–Iowa
    Lynn Jenkins–Kansas
    John Fleming–Louisiana
    Chellie Pingree–Maine
    John Sarbanes–Maryland
    Richard Neal–Massachusetts
    Bill Keating–Massachusetts
    Tim Walberg–Michigan
    John Conyers Jr.–Michigan
    Gary Peters–Michigan
    Erik Paulsen–Minnesota
    Betty McCollum–Minnesota
    Emanuel Cleaver–Missouri
    Billy Long–Missouri
    Steve Daines–Montana
    Jeff Fortenberry–Nebraska
    Lee Terry-Nebraska
    Leonard Lance–New Jersey
    Bill Pascrel–New Jersey
    Rodney Frelinghuysen–New Jersey
    Rush Holt–New Jersey
    Pete King–New York
    Louise Slaughter–New York
    Mel Watt–North Carolina
    Marcy Kaptur–Ohio
    Jim Renacci–Ohio
    Jim Bridenstine–Oklahoma
    Greg Walden–Oregon
    Earl Blumenauer–Oregon
    Chaka Fattah–Pennsylvania
    Patrick Meehan–Pennsylvania
    Joe Pitts–Pennsylvania
    Tim Murphy–Pennsylvania
    Joe Wilson–South Carolina
    Kristi Noem–South Dakota
    Jim Cooper–Tennessee
    Jim Matheson–Utah
    Peter Welch–Vermont
    Bobby Scott–Virginia
    Gerry Connolly–Virginia
    Jim McDermott–Washington
    David McKinley–Washington
    Gwen Moore–Wisconsin

    • Lillian December 5, 2013 Reply

      Yes get the word out!!

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