LAS VEGAS (Legal Newsline) - When former President Obama signed the America Invents Act, it was packaged as historic patent reform legislation that would streamline the process for American entrepreneurs and businesses.
However, a new documentary called Innovation Race: There is No Prize for Second Place, which had its festival premiere at Freedom Fest in Las Vegas this week, detailed the unintended consequences that have emerged as a result of the 2011 law.
“It wound up hurting the little inventor,” said Jenny Beth Martin, co-founder of Tea Party Patriots and executive producer of the film.
Martin
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For one thing, the America Invents Act created the Patent Trial and Appeal Board (PTAB), a panel used to invalidate patents, according to Martin.
“I have talked to inventors who are advising other inventors that if you have an invention and you've got it in your head, you just don't show it to anyone, you don't tell anyone about it, and you don't get it patented because if you patent it, you won't be able to monetize it and someone else will take it,” she said. “That's not good.”
The lack of trust in the U.S. patent system is so bad that it’s leading inventors and business owners to depend on trade secret protection however trade secret law has its limitations.
“The problem with trade secrets is there is no legal protection equivalent to a patent system and what you're trying to do is just prevent somebody from knowing how you do something, but you can have an employee who gives that information away,” said Brig. Gen. Robert Spalding, CEO of SEMPRE and author of Stealth War. “It may be illegal, but it's still very difficult to protect yourself particularly if you're going against a large corporation.”
In response, American inventors and entrepreneurs are traveling to China to patent their inventions.
“That means investors are going to China, not America, and what drives innovation is access to capital, and access to capital comes because you have a strong intellectual property system,” Spalding told Legal Newsline. “That's the case being made in the movie is that if we want to have investment in technology here in the U.S. and not have it go to China, we need to strengthen the intellectual property system. To do that, we need to unwind the America Invents Act.”
Kentucky Congressman Thomas Massie (R) and Delaware Senator Chris Coons (D) have introduced legislation that, if approved, would dismantle the America Invents Act and restore the patent system to what the founding fathers encapsulated in the U.S. Constitution.
“We want the documentary to help people understand that patents are protected and intellectual property is protected in the U.S. Constitution,” Martin said. “Intellectual property as real property was a very novel idea when our Constitution was written, but it was in Article One of the Constitution. It wasn't an amendment. It was in the base of the constitution.”
But Spalding firmly believes that the U.S. patent system will not be restored until political reform takes place.
“We’re either voting for a Democrat or Republican and those Democrats and Republicans only have to appeal to their base,” he said. “They don't have to reach across the aisle so what you have in a general election is somebody who wins the popular vote with less than 50% of the vote. Instead, we need final five voting.”
As previously reported in Time Magazine, final five voting is also known as ranked choice.
“Voters choose the top five people and the only one who can win is whoever gets more than 50% of the vote,” Spalding added. “By reforming at a state and local level, the way we vote for people and taking power away from the parties, then you start to see reform happen in D.C. because you have representatives and senators that are sent there by the people and not the parties.”
Until then, Spalding said that China will continue to benefit from the weaknesses of the U.S. Patent and Trademark Office.
"What's coming next is China's invasion of Taiwan within the next two years, and you're going to start to see just a different world begin to emerge and people need to be prepared for that," he said. "We need to understand the implications of that. We're going to have to protect ourselves in terms of who we have as allies and who our competitors are."