Reform the U.S.Patent System

To encourage the independent inventors who,
throughout the history of Science and Technology, have been the main source of our breakthroughs

The U.S. Patent System was originally created for the purpose of protecting the rights of inventors, giving them an incentive to invent because they could control whoever sought to manufacture and sell what they had invented.

We propose that this original purpose has been partially subverted. The main advantage of the patent system accrues to large-scale industry and establishment, away from the independents who are our main source of breakthroughs. In fact the U.S. Patent System has become an obstacle, rather than a support, to individual independent inventors, and this has gravely crippled the U.S. economy. We suggest a body of reform which restores support and incentive to the individual inventor while changing only minimally, or not at all, the main U.S. Patent System with all its attendant international arrangements.

The problem with letting advantage drift into the Establishment

Throughout the history of science and technology: the major breakthroughs were achieved mostly by independent individuals despite lack of resources, while the main resources and backing were focussed elsewhere, into the approved channels of hierarchical authority. Some estimates have it that dollar per dollar value, more than a million times as much return on the dollar has accrued from backing independents as has from support of the main, authoritatively approved researches, invention design efforts and projects in each of the scientific or technical fields concerned, as productive as these latter are of some useful information.

Historically, each research and technological field acquires an extensive tradition of “places not to look,” where if one looks he risks losing his grant money. This is often cited as one reason why nearly all breakthroughs come from the outsiders, newcomers to the field or amateurs. Also, as the best researchers within the field get funded and stakes rise, those researchers are carried up into administrative posts and away from the very activities at which they were productive.
Historically, industry after industry realizes economies-of-scale and eventually develops an administrative establishment—one often at quite some remove from the context in which the actual production of new designs and new inventions happens. Beyond the particular firm, even with anti-monopoly, anti-trust laws in effect, there emerges throughout the industry a set of tacit understandings and arrangements convenient to a small number of highly convenienced people in the upper echelons of that industry.
Historically, centralized funding—especially government funding, where you are responsible for the people’s money—has to weed out all the wild ideas and wild people, and go only to where you are certain not to get a “golden fleece award.” The resources in a field so funded get pulled away from alternative uses to where the money is. The way to sterilize any scientific or technological field is to substantially fund it from above. For several years of targeted productivity, such as in the instance of the Apollo moon landings, one subsequently gives up decades to stagnation.

In this historic micromoment of history, we are seeing the apparent, if temporary, exception to the above rule presented by the runaway high-tech electronics and computer industry. That surge has thus far developed too rapidly for any one establishment to be able to nail down all the corners. (What if we could get every major industry in America into such a surge?—That is one objective of the patent system reform proposed in this brief.)

Establishments generally are not made of bad people, or of those who deliberately want matters to stagnate. However, pervading the backgrounds of virtually all related decisions, whether consciously or unconsciously, is the characteristic of these relatively wealthy and powerful upper echelons to have an enormous stake in things here and now. Despite some striking individual exceptions, there is pervasive tendency with that stake to be unwilling to venture on significant change. Such meaningful changes as do happen generally have to occur from outside the purview of such inhibition and static interests, which means at least the loss of jobs abroad, sometimes even loss of entire industries. We came close, for a few years, to losing the entire automobile industry, among others.

Role of the Patent System

All that a patent really does for the inventor is to give him the right to sue in the event of infringement.

The establishment firms and upper echelons have deep pockets for legal expenses. Perhaps not quite as deep as the tobacco companies have allocated in the teeth of class action suits and public health claims, but generally deep enough. For every single instance where an independent inventor finally—after decades—wins reimbursement against a large auto firm for use of his intermittent windshield wiper, there are thousands or tens of thousands of cases where the independent simply runs out of resources and so loses by default regardless of the merits of his case.

Generally, as matters stand, it appears that no matter how well-girded an independent may be by patents, if one of the big boys wants his invention, he can pretty well take it away. Instead of inventing, the independent who resists this robbery has to spend his time, attention and resources in litigation—and will still lose in the long run, however rightful his claim might be. (The purpose of our proposed reform is not so much to cure this social evil as to restore effective production of breakthroughs by independent individual inventors now effectively shut out of the U.S. economy.)

The patent system itself, whose costs are negligible small change to the big players, represents a huge, sometimes even insurmountable investment to the independent inventor—even when the inventor does all the legal research himself, as many do, however unrelated that set of skills may be to the skills which enabled him or her to invent in the first place. Indeed, this writer’s own late father, whose solar energy invention still looks good from decades later, lost $30,000 by the time all games were played concerning amendments, and the family in that generation never recovered from the loss.

Numerous engineers of this writer’s acquaintance, including some full professors, have confided their private conviction that establishment firms, especially in energy and in automotives, have used their advantage to seek, acquire and bury inventions which would have meant real change in their respective industries. Such an allegation does not necessarily mean the fact that this is so, but taken in context reflects a wider recognition of what is likely to happen, in firmly established industries, to any inventions, whether derived from within or outside of the major firms, which are novel enough to look like they could upset the applecart.

Under current conditions, the present patent system:

Serves the interests of establishment echelons of firms in each industry, whose interest is not one of significant or truly new invention. People’s immediate short-term interests are being looked out for—the advantaged echelons plus shareholder investors, and sometimes the interests of the employees as well—but the long-run interests of both that industry and the economy are not helped by this set of conditions.
Does not serve the interests of the independent inventor for whom it was originally intended.
Serves in fact as more of a barrier than a help to the interests of the independent inventor, both as regards costs and as regards the illusion of protection.
Only provides the inventor the right to sue.

The Suggested Reform

We do not propose dismantling or even drastically overhauling the present system. Rather, we suggest expanding on an often overlooked, minor feature of the present system and creating from it a secondary patent system for those who wished to avail themselves of it. Everyone else who wished to, could continue with the present patent system with all its structure, content, employment, and international ramifications.

The feature of the system in question, in place now, makes no pretenses about being a “protection.” All it does is provide a record which gives the individual filing it the right to sue against infringements by establishing prior origination—for 2 years. Fill in and file a form with the U.S. Commissioner of Patents. Then for 2 years (renewable if you show “diligence” in trying to develop it), you have that right to sue. The rest is up to the records you keep, vs. the records kept by the infringer, as to whose idea it was and how it was developed, as recognized by the courts in event of such suit.

Well, that right-to-sue, over a longer period of time, is all you really get when you obtain a full-fledged patent.

The patent provides one other service—a detailed description of how to build or create the device or effect incorporated in the invention. However, under the exclusivity provisions of current patent law, despite those public detailed instructions, the only one who can manufacture the invention (barring deep-pocketed infringers, of course) is whoever is licensed to do so by the inventor.

Proposed New Secondary Patent System

We propose a second-tier “patent” system which would cost much less, and would encourage the independent inventor. (Perhaps only $100 per invention-claim, $25 per amendment filed, general expectation total cost only $100.) This system would, as mentioned, provide the independent the right to sue. It would drop the clause of exclusivity. Anyone who wishes to can manufacture the device or process so filed, automatically paying the inventor 2% of whatever is spent in that invention’s context. Another 1% would go, where appropriate, to the firm or investor who had provided opportunity for that inventor, whether or not the inventor had done the invention on his own time or on company time. Another 1% would go to the agency or system to pay for the costs of this program. The least any manufacturer would be out would be 3% and the most would be 4%, a certainty which would further encourage development to go ahead on many items. There would be an agency to see that the 2% is in fact paid to the inventor, so long as the product is exploited, throughout the 12- to 17-year period of coverage after filing.

Non-disclosure and secrecy contracts between inventors and their employers would remain in force, and generally not be affected by this system. Where disputes arose over such contracts, these would focus on violations of secrecy provisions and not on ownership of inventions whose information bases were independent. Only in extreme cases of clear exploitation of privy secret knowledge would ownership of an invention be affected thereby.

A mere 2% sounds like very little, but is more than what 99% of inventors, in or out of the major firms, ever get for even those of their creations which are accepted!

When lawyers fight, they would be fighting over 2% of the value of the invention and not the whole value entire. This would produce a very different, better behavior, both in and out of court. For this reason, in instances of conflict between this new secondary patent system and the continuing main patent system—say, where someone claimed to have invented a product and others started manufacturing it under that 2% provision—where the product in question was already apparently covered by pre-existing full patents—the 2% provision should take precedence. In the case where the product in question was already substantially in production before the time that the secondary patent was filed, existing production and distribution contracts previously let under the main patent would take precedence, other things being equal.

The terms for the secondary patent would be nowhere as rigorous as for a full patent, and of course nowhere near so costly to administer. Indeed, the present 2-year pre-patent filing system with the U.S. Commissioner of Patents involves no requirements nor review, no standards except the required $10, two copies, and sealable return envelope! We suggest a system not so much of requirements as of low-keyed editorial guidance, aimed at getting the production instructions clear enough for reviewers to be able to follow them to build the invention and begin paying the 2%. Even that guidance is only by suggestion:— the inventor at any time may finalize his filing, editor’s only recourse being that of stamping “Not Clarified” and his own signature on the cover of the document. Editor and inventor are meant to be on the same side of the table, in pursuit of the goal of nurturing independent and high-order creativity in U.S. science, technology and the economy.

The new system does not solve all problems. There are still issues of distribution and marketing in a huge-scaled economy. There are issues of environmental impact. There may be more opportunity for conflicting claims than before, due to the less rigorous standards for the secondary-level patent. But the level and incidence of litigation is likely to actually decline due to the stakes’ being reduced to 2% of the value of the inventions in question.

The new system would provide easier access for and better service to the independent inventor from whom most real breakthrough advances come. The new system would provide a much, much better access for industry to new inventions for manufacture. Most inventors would actually be rewarded for their efforts instead of punished or destroyed. New products and services would flow into production and service. All corners of American industry could again advance in much the same way and degree as that presently out-of-control high-tech electronics/computer industry has been doing. It seems to this writer, at least, that all these outcomes are highly desirable, and that no drawbacks from them pertain which are comparable.

Here is a further way to insure that value gets produced and transacted…. that production of inventions and breakthroughs won’t get held up for many years over disputes of ownership….that intellectual capital invested is productive and creates returns. We propose a further provision or statute:

Where ownership and/or derivation of a proposed invention within this system comes into legal dispute, anyone may still have use of it and produce it, or continue to use it, while paying a 2% fee into escrow account pending settlement of that dispute.

A practical consideration — to fund the system while ensuring that inventors receive 2% of the value of their product and ensuring that the product moves forward in the creating of value,

Amend the figure paid by producers and users of the invention from 2% to 3%, in all aspects of the above proposal. The inventor will continue to receive 2%, the difference going to fund the system up to some statutory limit of assets, any excess going into an invention development revolving fund.

Summary

The present patent system is unsatisfactory, and contrary to its announced purpose operates counterproductively, discouraging rather than supporting independent inventors.

The present system is, however, heavily embedded in and invested into a network of arrangements and laws, including international agreements, many of which we are all better off with than without.

The proposed revision can operate mostly within the existing system, without disturbing those arrangements and agreements. Whether accomplished as a private initiative or as a public one, this proposed version makes an absolute minimum change in existing laws, but restores support and incentive to our historically richest source of invention and discovery and main basis of economic development in this country—the independent inventor.