The Patent Reform Act of 2007 has been controversial since its passage by the U.S. House of Representatives in 2007. Once taken up in the Senate, over 15 amendments have been under consideration, with strong opposition expressed by organizations throughout the business community. Part Two of Black and White’s report presents interviews and comments from stakeholders and critics of the bill.

Current Status

As of April 18, 2008, the Patent Reform Act is stalled in the Senate over disagreements about key issues. Speculation has already begun that the bill is not just sidelined, but is in jeopardy of dying. Bill co-sponsor Senator Arlen Specter commented that “the patent bill is … extraordinarily complicated. And its consequences are very, very far-reaching.” Democratic Senator Patrick Leahy said that the negotiations stalled over “just a handful of words.” Mark Isakowitz, legislative strategist for the high tech industry says the bill was “literally one sentence away from being done” and settling on a rate for damages was the last remaining issue on the table.

There are many issues and problems addressed in the Patent Reform Act. Nearly all parties agree that some reform would benefit the system. It is widely accepted that the issue of patent reform in the U.S. congress if not the current bill, will be an ongoing issue that will surface again in the near future.

Black and White speaks with George Davison, President & CEO of Davison, Inc.; Keith Grezelak, Chair of the IEEE-USA Intellectual Property Policy Committee; Chiara Orsini, Associated Director of Intellectual Property at University of Pittsburgh; Marc Malandro, Ph.D. Associate Vice Chancellor for Technology Management and Commercialization at the University of Pittsburgh; and Jack Lasersohn from the Board of Directors of the National Venture Capital Association. Contributing statements were provided by co-sponsors of the bill Senator Arlen Specter (R-PA) and Senator Patrick Leahy (D-VT); and vice presidents for Dupont, Dean Oestreich and Uma Chowdhry.

Interview with George Davison

George Davison is President and CEO of Davison, Inc. Davison is a new product development company that helps individual creators, corporations and entrepreneurs. Its services include research, industrial design, virtual rendering, video, animation, product samples, packaging, presentation and royalty management.

Tell me about the current U.S. patent system. What is positive about it and what needs fixed? Coupled with that, what are the negative components from your perspective?
DAVISON: What is positive about it is that it has functioned well for about 200 years. It’s a proven system that was written by people a long time ago who understood commerce that didn’t have a major amount of politics integrated within it. In other words, you had people in the old days who wanted to build a country and understood industry from a very basic level and that thinking from the founding fathers built a very strong patent system that, in turn, helped our country build itself into what it is today.

Why is that now good for an inventor? Why does the patent system work well for an individual inventor the way it is right now?
DAVISON: I would say it works well for the individual inventor today because it’s fairly consistent with the way it protected inventors years ago. So the system is proven historically.

One of the proposed changes is a change from first-to-invent to first-to-file. And you see first-to-invent as working well for an individual inventor.
DAVISON: Correct. You reward the person who invented it first, not the person who had enough money to pay the attorneys and patent office first.

What do you think the compelling reason would be, then, for someone to want to change it to first-to-file?
DAVISON: The reason is simple economics. Our forefathers under the current system created a logical and low cost method of knowing if you should ever file at all. They created the “one year rule” which allows inventors the opportunity to test market the invention for one year and see if you, the inventor, have created something that people would pay for. In other words, if you cannot sell any in the first year, don’t waste your time and money on patent filings. Under the first-to-file system, fear would cause everyone to file regardless of market conditions and certain special interests benefit greatly.

It’s built well. You need to protect it. So first-to-file would throw a major change into the system and one that puts risk into one of the basic building blocks of how our country was built.

But you’re still protected during that time?
DAVISON: Correct. You’re still protected during that one year period of time, which is of high value because you get to find out what you should be putting your time and money into based upon the reception of what you’re getting from who your consumer would be with your technology. So if you don’t get any reception on the technology then don’t waste your time and money and file with the patent office. Our founding fathers set it up that way because in the old days, before we had big government, big politics, etc., we had a system that was built to perform efficiently. Back in the early days, country people had to build the basic necessities of life to survive. So they didn’t want us wasting our time on things that weren’t going to bear fruit. So they gave us a full year. So first-to-invent works well within the architects who designed our system and it still makes logical sense today when people use common sense and they apply it in that common sense manner. Where it gets confused is when you start to massage all this information and you’re better off not massaging it. It’s built well. You need to protect it. So first-to-file would throw a major change into the system and one that puts risk into one of the basic building blocks of how our country was built.