H.R.400 / S.507 & Now S.1226
PATENT & TRADEMARK OFFICE AND MULTINATIONALS HAVE SIMILAR GOALS:

AMERICAN PATENT SYSTEM ABOUT TO BE CRIPPLED

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Index

JAPAN’S INFLUENCE
AN EXAMPLE OF HOW THE SYSTEM IS INFLUENCED
CHANGES UNDER GATT
OTHER PENDING CHANGES
THE REAL CAUSE OF "SUBMARINE PATENTS"
THE PRACTICAL IMPLICATIONS OF THE CHANGES
PTO UPPER MANAGEMENT ATTITUDE
PRIVATIZING THE PTO
LARGE CORPORATE MOTIVES TO WEAKEN PATENTS
AN INVENTORS VIEW OF MANY LARGE CORPORATE MANAGERS
IMPACT ON AMERICA
CONCLUSIONS

As an inventor, I must speak out about multi -pronged attacks against our patent system by foreign paid American lobbyists and law firms and by multinational corporations. America's founding fathers recognized that innovation is crucial to a free enterprise system. Foreign governments and multinational corporations have found allies in the Patent and Trademark Office. They are spending large sums of money to change American patent law. Japan is one of the leaders, but by no means is it the only foreign government trying to influence our lawmakers to make changes that are not in America's best interest. It is important that we not compromise our country's prosperity by allowing foreign interests to weaken our patent laws.  Invention is the fuel of America's economy.

JAPAN’S INFLUENCE

A bargain was made during the "Mutual Understanding" of January , 1994 between Patent Commissioner Lehman and Japan to make a number of changes to our patent system. Some of those changes have been buried in GATT. This deal is a result of a trade with Japanese negotiators who offered the right to file American patents in English on the condition that a Japanese language application be filed within 60 days and a limited right to correct translation errors in exchange for the 20 year from date of filing language.

Another agreement between the late Commerce Secretary Brown and the Japanese was made in August 1994 to publish American patent applications 18 months after filing and to allow third parties to participate in reexamination proceedings.

Neither of these agreements are binding and there is considerable question as to whether Brown and Lehman had the authority to enter into such agreements. It is also interesting that both Brown and Lehman have worked as lobbyists for the Japanese in the past. Many inventors feel this is a serious conflict of interest, could these individuals actions be motivated by future employment opportunities?

Results of previous deals with Japan over many years should have taught the United States that we never get what we bargained for. I see no benefit for Americans in this deal. Most American inventors cannot afford to file foreign patents. American inventors who do file foreign patents find that it is almost impossible to enforce them.

Jack Kilby of Texas Instruments is one recent example of Japans unfair treatment of American inventors. He invented the monolithic integrated circuit. The Japanese patent office held up the issuance of his patent for 29 years and after it's release Japanese courts ruled that the patent does not apply to current chip design.

The Japanese have been studying America's educational system for years attempting to understand what makes Americans so much more creative than the Japanese. Americans make many breakthrough inventions. Japanese inventions are usually incremental or small improvements in existing technology.

Japan has demonstrated the ability to successfully commercialize concepts that the U.S. and other western cultures create with breakthrough inventions. So, their solution to the problem is to weaken our patent laws so they can take advantage of our creativity .

A recent article in Japan Times Weekly titled "Intellectual property rights accord with U.S. said necessary" made it clear that changes to the U.S. patent system are important to "facilitate transfers of technology and related investments from advanced economies to the Asian nations, which would help their economic development". Both the 20 year provision and the change to section 104 of the GATT enabling legislation allowing foreign non-published evidence of when an invention was conceived are very detrimental to small business and individual inventors.

I have a healthy respect for the Japanese. They are experts at marketing and manipulating politics. They consider both when promoting their interests. They are willing to spend large amounts of money to promote their interests and they do it consistently over a long time frame. It is well known in Washington that people who promote Japan's interests will be rewarded after they leave office. It is no wonder that their agenda is often promoted by officials during their last term.

The architect of Japan's reconstruction, Saburo Okita, spelled out his plan in "JAPAN'S CHALLENGING YEARS, Reflections on my lifetime" (1981). He said:

"This was just what happened to Japan. He did not think that a defeated Japan would allowed to rearm at all, but this would probably a blessing in disguise. Japan did not have the qualities of a first-class power, but she could excel as a second-class power.

I completely agreed with all he said. I will actually be happy if rearmament is completely prohibited. An army in uniform is not the only sort of army. Scientific technology and fighting spirit under a business suit will be our underground army. This Japanese-American war can be taken as the khaki losing to the business suits. Today I am in unusually high spirits as I have found a sympathetic ear."

America has coddled Japan since it lost WW II. It made sense for America to help Japan after the war because economic success helps to avoid a repeat of the conditions that led Japan to start a war. Unfortunately, Japan became accustomed to special treatment, the same as many welfare recipients. And like welfare recipients, Japan now lobbies extensively to keep preferential treatment that is no longer warranted. Even if we didn't count preferential trade treatment, the economic implications of America’s footing much of the bill for military defense of Japan and other countries gives them a huge economic advantage.

The real problem is not Japan trying to influence our system, it is the willingness of individual Americans to sell out our country’s interests, and the failure of Americans to plan and make sacrifices for long term goals. We must start planning at all levels of personal, corporate, and government for 5, 10, and even 20 year goals.

I have come to the conclusion that if we do not stop these ill-considered changes to our patent system, independent inventors and the industries they found will cease to exist in America, just as they have in Europe. We must stop this well orchestrated and funded attempt by multinational corporations and foreign governments to alter our patent system in a manner that will make patents unenforceable for everyone except the largest companies.

AN EXAMPLE OF HOW THE SYSTEM IS INFLUENCED

The shear number and ingenuity of the methods used by multinational corporations and foreign governments is astounding. They make some movie plots pale by comparison.

Harold C. Wegner, a professor at George Washington University, who would like to think of himself as an authority on international patent law was quoted as defending patent commissioner Lehman by saying , "He got something for nothing. It's a brilliant trade."

It seems Mr. Wegner thinks the Japanese are stupid, something I do not buy for one minute. It is clear that the Japanese negotiators are laughing all the way to the bank. They are definitely much smarter than Mr. Lehman.

Readers might be interested in my experience at a hearing held by the PTO. The row of chairs in front of me were full of Japanese and their hired American spokespersons. In fact at least a third of the people at the hearing were such persons.

Mr. Wegner came into the room and made a bee line to the group in front of me. It was a very cordial meeting. I didn't know who Mr. Wegner was and asked about him. I was told that he was a part-time professor at George Washington University, and that he represented many Japanese clients. I was also informed by another person that his position at the university was known as the "Japanese Chair".

I later looked up his testimony related to a number of issues and found that he consistently advocates changes to our patent system that will benefit the Japanese. His testimony is a matter of public record which anyone may review. This is only one example of how insidious the attempts to cripple our patent system are.

Successful inventors have been collaborating with universities to create and fund programs to educate potential innovators. George Washington University lends credibility to Wegner's positions which are clearly detrimental to inventors and America's interests. We removed George Washington University from consideration for inventor funded projects.

CHANGES UNDER GATT

The GATT enabling legislation changed America’s patent term from 17 years from date of issuance to 20 years from date of filing. This change’s net effect shortened the usable life of a patent. That is especially true of the most significant patents that often take a decade or more to issue. For important patents the majority of the income is generated near the end of the patent term. Loss of just two years of term for such a patent can easily cut the total income by half, loss of ten years would likely mean almost no income. Traditionally a patent received a guaranteed term of 17 years in exchange for disclosing the invention. This policy has served America well for over 200 years. The twenty year language was also included in (103 rd congress) S. 1854, H.R. 4307, S. 2368, and H.R. 5110.

Prior to 6-8-95 foreign proof of inventorship within the United States was not allowed except where such proof had been published. GATT changed our laws (Section 104) to allow worldwide proof of inventorship. This is going to create many more interference's which will be extremely difficult to investigate. It will be much easier for multinational companies to avoid compensating American inventors by citing obscure evidence. It also opens the door for large scale fraud by multinationals which will be next to impossible to prove. My personal experience has been that large corporate interests often commit fraud to avoid compensating inventors.

OTHER PENDING CHANGES

Other changes to our patent law have also been proposed in several other pending bills. These changes in their totality will cause far greater damage than the threat represented by each alone. You may read the bills at:

Pending Patent Bills and Analysis of Their Effect, 

and numerous articles about them at: www.UIAUSA.org

Articles About Patent Issues, www.UIAUSA.org

"Early publication" calls for the patent application to be published 18 months after filing. This will encourage interference with a patent by giving potential infringers access to the information before the patent issues, and will make it much easier for an infringer to fraudulently claim prior user rights.

The published information will be used by dishonest entities to bring the invention to market ahead of the inventor, there by denying the inventor the profits which could be used to defend the patent against infringers. Loss of that profit coupled with the expense of defending patent rights would return America to the conditions we had a decade ago where most inventor’s property rights were taken without compensation by large corporations with impunity. Early publication will also allow pre-issuance opposition of patents due to an existing provision of American patent law called the "Public Use Procedure". Adding insult to injury is the fact that inventors will be charged an increased fee to publish their patents. (103 rd congress) S. 1854, H.R. 4307, (104 Th. congress) H.R. 1733, H.R.3460, and introduced in H.R. 400 / S. 507 in the 105 Th. congress.

"Prior User Rights" says that anyone who claims that they have secretly developed an idea can use it royalty free. This will prevent someone who obtains a patent covering the idea from collecting royalties from any prior user. Since there is no requirement that they publish to establish the right of prior user this will encourage large scale fraud by infringers, who want to establish their right to use the idea to avoid compensating the inventor. I believe that adoption of prior user rights will cause so much litigation that we will have to adopt "First to File". (103 rd congress) S. 2272, (104 Th. congress) H.R. 2235 H.R. 1733, H.R.3460, and introduced in H.R. 400 / S. 507 in the 105 Th. congress.

"Third party participation in reexamination" would allow third parties an active roll in reexamination of patents. Currently a third party can request a reexamination but only the inventor and patent examiner are active in the process. If adopted, large businesses will be able to bring their full resources to bear against small entities. They could mount a series of attacks through fourth parties and tie the invention up for many years. This is especially insidious when considered with the patent term starting at filing. (103 rd congress) S. 2341, (104 Th. congress) H.R. 1733, H.R.3460, and introduced in H.R. 400 / S. 507 in the 105 Th. congress.

All of the bills; H.R.1659, 1732, 1733, & 2235 were combined by the committee into H.R.3460 and released 5-16-96 in the 104 Th. congress. The same provisions have been introduced as H.R. 400 / S. 507. The proponents of this bill actually had the gall to call it "Inventor Rights Protection and Patent Reform Act of 1996". This bill is not about protecting inventors rights, it is about destroying most of the inventors’ rights. It was written by and for multinational business interests, specifically so those interests could return to appropriating inventions and crushing inventors as they did before the formation of the CAFC. The Circuit Federal Appellate Court is a special court for patent cases formed about a decade ago.

All of the changes cited have tilted the playing field in favor of those who copy. The Japanese have always been very good at copying. And I believe that is why they are lobbying so hard for these changes. The United States has always been good at making major technological breakthroughs. And breakthrough patent’s protection is going to be disproportionately weakened by the changes.

These changes will favor those who make small incremental improvements in technology at the expense of those who make more significant breakthroughs. They will favor large companies over startup companies, and favor companies with short-term management goals over companies that plan for long-term goals.

THE REAL CAUSE OF "SUBMARINE PATENTS"

One example of the insidious of the foreign interference is how they managed to get the patent office’s backing for changes that will undermine the patent system. Proponents who support weakening our patent system argue that it is being abused by inventors. They usually cite "submarine patents" as an example of misuse. The term submarine patent first appeared in a Japanese publication. It is used to describe a patent which is issued after a long delay in the patent office. When this happens, it catches everyone in industry by surprise. Some persons claim that inventors intentionally delay their patents. There are no proven cases of intentional delay being used to create a submarine patent.

There is considerable evidence that delayed patents are the fault of inefficient bureaucrats at the patent office. When they were confronted by powerful interests over the problems created by patents that were issued after lengthy delays of up to forty years they picked individual inventors to be the scapegoat.

The patent office is specifically mandated to aid individuals who are filing for patents. The patent office's claim that submarine patents are caused by individual inventors is proof that they are not adequately aiding inventors as mandated by law.

There is a great deal of evidence that the PTO is in fact the cause of excessive patent delays. When an examiner receives an unusually complex or in some cases a poorly drafted patent (as can happen with pro se applications), they tend to work on it after they have processed other patents to keep their productivity evaluations favorable. The patent may go one or more years between office actions and I have heard of four and five years in extreme cases.

An even greater delay can be caused by the examiner leaving the PTO, causing the file to be passed to another examiner. The new examiner is faced with even more work to become familiar with the patent and sticks the file on the bottom of their pile.

The application languishes and soon ten or twenty years, or in the worst case forty years have elapsed. This is not the inventor’s fault. The solution is to enforce the mandate that the PTO prosecute all patents, especially pro se patents in a timely manner.

Many persons who have a vested interest in a weaker patent system have claimed that inventors have a motive to delay patents until a technology is well established. It is illogical to believe that an inventor would intentionally delay his patent for forty years. Compounded interest on money earned earlier far exceeds the potential for a bigger market, which is cited as a motive to delay patents. And the fact is that an inventor would have to be clairvoyant to see twenty, thirty, or forty years ahead. There is a fair probability that an invention would be rendered obsolete during a very long pendancy by a new discovery which would make the delayed patent worthless.

Prolific inventors would be foolish to defer income when a lack cash flow stops them from filing additional patents, whose financial return is likely to far exceed the value of compounded interest on invested funds. It follows that prolific inventors want income as soon as possible on existing patents to fund developing their most current ideas.

THE PRACTICAL IMPLICATIONS OF THE CHANGES

I suggest the following issues must be examined as a group while carefully considering what the practical implications are.

1) 20 year from filing.
2) World wide proof of inventorship, section 104.
3) Early publication.
4) Prior user rights.
5) Third party participation in the patent process.
6) Privatizing the patent office

There are often huge disparities between theory and real world application of principals. Look at capitalism versus socialism. One encourages hard work and the other doesn't. Multinationals will use the proposed changes to crush small businesses and independent inventors, in turn creating even more large business monopolies.

The 20 year from filing provision is a PTO bureaucrat’s dream because it gives them a huge lever to make an inventor accept whatever the PTO dictates. The five year, and then ten year extensions they have offered are Band-Aids applied to a change that is not justified by the evidence or in America's interests. Obtaining the extension is dependent on the whims of a bureaucrat. By promoting the 20 year from filing patent term the PTO gets more power and eliminates industry criticism over delayed patents.

The 20 year term also shifts the financial consequences of unreasonable delays from large corporate interests to the inventor. It is clear that the PTO would rather have one or two angry inventors verses having many large corporate interests and the organizations that represent them such as NAM, AIPLA, and IPO demanding an explanation for unreasonable delays. In other words the 20 year change removes a serious political problem for the PTO.

Administrative solutions such as the five or ten year extensions (that are included in H.R. 400 / S. 507) are not acceptable. An inventor would be at the mercy of the PTO admitting that the PTO had caused an unreasonable delay in the patent’s execution. PTO upper management is not willing to accept any responsibility for so called "submarine patents". And I think it unlikely that they would take responsibility for the delays they cause if H.R. 400 / S. 507 were passed. In any event giving the PTO more power over inventors is poor policy since they are already abusing their authority.

Another aspect of this problem is allowance of the invention’s claims. Currently the inventor or their representative and the examiner interact to determine appropriate claim language. The examiner has an incentive to complete the patent because they look bad if the case drags on. Inventors have an incentive to receive their patent as soon as possible because they rarely derive income from a patent before it issues. I am sure it is not an accident that the 20 year change gives the PTO much more power over the inventor.

GATT enabling legislation also altered section 104 to allow foreign interests to use non-published information as evidence of prior art. This will lead to many more interference proceedings, dramatically increasing legal costs. These costs will be incurred in the early years of the patent, often before the inventor has cash flow from the invention.

Early disclosure will be used by dishonest entities to erode the patent term, by allowing third parties’ challenging pending patents, claiming prior user rights, and use of fraudulent evidence from difficult to investigate foreign sources. Adoption of 18 month publication will deny inventors a head start in the market with their invention. Loss of that head start will cost the inventor the most lucrative sales, there by denying the inventor profits that he needs to defend his patents against large entities, who frequently use litigation to force the real inventor into bankruptcy.

Proponents of H.R. 400 / S. 507 will argue that it "gives patent holders important rights even before the patent is issued". Having "rights" does not help the inventor if those rights are coupled with other provisions such as early publication. The problem is that one must be able to defend their rights. Defense of the rights is only possible if the inventor has cash flow, something he will not have as a result of early publication and a host of other inventor unfriendly provisions.

Early publication will make our patent system subject to "flooding" as is common in Japan. Flooding is where hundreds of narrow and often questionable improvement patents are filed concerning a fundamental patent, limiting the ability of the original inventor to collect royalties. The Wall Street Journal published "Little U.S. Firm Takes On Japanese Giant, Yamaha accused of "Patent Flooding' to Gain Advantage" on page A10, Wednesday, June 5, 1996.

This article describes how Cyberoptics technology has been appropriated through flooding by a Japanese company. This has been a common tactic used by Japanese companies against American companies who file their patents in Japan. Japanese companies are now using this tactic in many other countries who have adopted early publication of pending patents. We will be subject to the same abuses if we adopt early publication.

Early publication will allow pre issuance opposition of patents. American patent law has a provision of pre issuance opposition that is rarely used because patents are now secret. With early publication the "Public Use Procedure" will be useable against all patents.

Early publication will lead to a massive transfer of concepts created by American inventors to other countries which inevitability will cause further loss of American jobs. America cannot afford to lose the creation of new jobs through new technology. Jobs are the economic support of our population.

Early publication will result in the transfer of technology with military significance. Publication of pending patent applications will initially result in over 100,000 patents being published. This huge volume of material will overload the staff that is responsible for screening material with military significance. Technology often has dual use, both military and civilian. Publication will cause such technology to be disseminated much quicker to the detriment of our national interests. Could PTO upper managers position favoring publication be motivated by the fee they will charge for publication? Is it possible that some PTO managers who have a history of working for Japanese interests have been unduly influenced?

Prior user rights undermines the purpose of our patent system. The patent system was created to encourage inventors to disclose their inventions. If the incentive of a guaranteed period of exclusive use is removed, it creates a strong incentive for inventors to treat ideas as trade secrets. If they are able to protect the idea as a trade secret, they may use it indefinitely. If they fail to keep the idea secret and someone else patents the idea, they forfeit the invention.

One of the most vocal proponents of prior user rights is William Buddinger of Rodel, Inc. Mr. Buddinger made a business decision many years ago to treat an invention as a trade secret and enjoyed it's exclusive use for over twenty years. A Japanese company figured out his invention (probably through industrial espionage) and received a patent on it. Now Mr. Buddinger would like all of America to bail him out, he expects us to weaken our patent system because he made a poor business decision.

Persons who decide to use trade secrets to protect their inventions do so with full knowledge that they run the risk that someone else may patent the idea. They make a decision to use trade secret protection, knowing they may profit from the idea much longer than the normal patent term. They profit from that decision while failing to teach others as patentees do. They are adults who should accept the consequences of their actions, and not scheme to selfishly protect their personal interests at the expense of the rest of American society.

Important patents that are not stopped outright will be tied up with interference's and other delaying tactics that will eat up half or more of the 20 term. All infringers will claim to be a prior user. The very concept of prior user rights is contrary to the basic purpose of our patent system. The patent system is meant to encourage disclosure of ideas to promote the general advancement of technology.

Prior user rights will encourage greater use of trade secrets since the person using the trade secret will not lose their right to continue using the idea if it is discovered by another party. This is bad policy, persons who make a decision to use trade secrets do nothing to advance technology and should therefore not enjoy protection in the form of prior user rights.

PTO UPPER MANAGEMENT ATTITUDE

The upper management of the PTO has consistently over several years shown contempt for inventors. They have made many disparaging public remarks about independent inventors. It is also clear that they still do not understand the difference between the 99% of inventors who are not commercially successful and the 1% who are successful. They have used some of our most prolific inventors as scapegoats in an attempt to divert blame from the PTO.

PTO upper management has threatened numerous inventors and industry groups to keep them quiet about issues which the PTO is promoting. They have intentionally given some inventors a difficult time about allowance of claims and they continue to cause delays of up to five years between office actions for such inventors.

Several PTO upper managers’ actions related to blaming inventors for problems that are clearly the result of the PTO not doing it's job have caused a number of inventors great harm. They have personally libeled these inventors and have worked with large corporations, who have a long history of stealing inventors work to help them avoid compensating these inventors. The large corporations have worked to spread the falsehoods, and have tried to use their influence to stop the media from covering both large corporate abuses and philanthropic activities of independent inventors. In many cases they have succeeded.

"Facing High-Tech Issues, New Patents Chief is Reinventing a Staid Agency" in LAW of New York Times on Friday, July 14, 1995, did not surprise most of us who are critics of Mr. Bruce Lehman's attempts to ram through changes to our patent system. "Mr. Lehman asserts that his detractors are mostly weekend hobbyists who do not realize his agency is crucial to the economy because it regulates the ideas behind high-tech businesses." I am sure that numerous members of the National Inventors Hall of Fame, the American College of Physician Inventors Hall of Fame, and several Nobel Laureates were also surprised that they were described as weekend hobbyists.

A fundamental flaw in this bureaucrat's reasoning is that the agency is crucial; it is innovation that is crucial and not the agency. Most of the innovators who have joined in this fight are full time innovators and entrepreneurs. The fact of the matter is that Mr. Lehman's arrogance is the reason we are criticizing him. He has consistently refused to listen to anyone who disagrees with his views including a very large percentage of his own staff.

The latest insult to inventors came from Mr. Lehman when he told reporter (published 4-17-97) Rory J. O’Connor of Mercury News, Washington Bureau, that his critics are in the Timothy McVeigh category, people on the lunatic fringe. In light of Bruce Lehman’s poor attitude towards inventors and the fact that he has consistently abused his position to harm inventors, I have no choice except to characterize him as an aspiring little Hitler who is willing to compromise our patent system to create his personal kingdom in the form of a privatized patent office.

Don Banner, a former patent commissioner who is dramatically better qualified than Mr. Lehman also has been very critical of Mr. Lehman's attempts to alter the patent system. The fact that Mr. Banner is a Democrat makes his criticism much more credible. There are many other persons who feel Mr. Lehman doesn't understand the implications of his changes. Please note that Mr. Lehman is neither a patent attorney or an inventor.

A significant factor in Mr. Banner's credibility is the fact that he was a patent commissioner under the Carter Administration. The fact that he is a Democrat that is extremely critical of the management of the PTO under another Democratic Administration makes his views more creditable than they would be if a Republication offered the same criticism.

PTO management has repeatedly claimed that the vast majority of inventors will enjoy a longer term of patent protection under the 20 year from filling provision that was included in GATT. This is another example of the PTO misrepresenting the facts. They claim the average pendancy is 19.5 months based on the most current continuation. It is not an accident that their statistics do not take into account the previous applications that led to the last application from which the patent issues.

A GAO report of 1995 patent pendancy showed that slightly over thirty percent of all patent applications have continuations, and that the average pendancy of that group of patents was 47.2 months. It is likely that patents with continuations are those of more important technology. This report shows how one can lie with statistics, and that while the 19.5 month claim is true in the literal sense it is a gross misrepresentation of the reality.

An analysis of patent pendancy by Gregory Aharonian of Internet Patent News Service showed the average pendancy of 1000 software patents to be 34 months. Some other disciplines are twice as long.

The PTO claims the changes address the abuses of our patent system. The worst abuses have been perpetuated by the PTO, and none of the proposed changes address PTO abuses. The PTO is a bureaucracy whose upper management is willing to compromise the source of our prosperity to cover-up it's own failures, justify burdensome fees to increase it’s size and budget, and to give it more power.

The end result of the patent office’s attempt to lay blame for submarine patents on inventors is that they have been maneuvered by the foreign multinationals into a position where they had to back measures that are contrary to America's interests. I am not sure at this time whether the patent office has been duped into backing destruction of innovation or if other incentives have been offered by multinationals to key persons.

I believe that PTO upper management is promoting early publication to increase it's budget and justify increasing staff to handle publication. Most bureaucrats want larger budgets and staff to increase their stature.

Mr. Lehman's efforts to move the patent office into the computer age have serious flaws. They are in large part based on doing text searches to locate art. The system has traditionally been based on classification searches and that system is much more effective than text searches. The problem is that Mr. Lehman is dismantling both the classification system and the quality control group that reviews some issued patents, rushing towards the text search method. This is against the advise of the staff who really understand the system, and without any trial interval to compare the two methods.

Mr. Lehman is clearly an effective bureaucrat. He is effective at manipulating the legislative process to minimize participation of those who don't share his views. He uses every underhanded trick available such as burying provisions in other legislation and introducing at least one bill on a Wednesday of one week followed by the bill being available from the printing office the next Tuesday and the hearing on the bill on Thursday.

Our own patent office has been systematically crippling our patent system at the request of Japan and multinational corporations. The current patent commissioner is neither a patent attorney nor an inventor. He characterized inventors who oppose his policies as "weekend hobbyists". Deputy commissioner Mike Kurt said that inventors who published the "Open Letter to President Clinton from 59 U.S. inventors" http://www.UIAUSA.org/coalition/ipc/ concerning the 20 year language of the GATT enabling legislation did not understand the issues. The group who is opposing him includes many Hall of Fame inventors and several Nobel laureates, who I am sure were surprised that our patent commissioner had such a low opinion of them. I agree with Lehman that Administrative solutions could solve many problems. Mike Kurt resigned to run AIPLA which represents the interests of multinational corporations. Let’s start with replacement of several of the PTO's upper administrators.

Mr. Lehman has made it clear to all the inventor community that he will make us sorry if we don’t show him the proper respect. His attitude is even worse than Nixon’s was during Watergate. He holds whole industries hostage. His threats are usually veiled or delivered without any witnesses present.

Mr. Lehman appears to have teamed up with Ford Motor Company, which is well known in inventor circles for always litigating inventors into bankruptcy, to falsely spread submarine patent arguments. Mr. Lehman’s motive is apparently to avoid having the PTO held accountable for it’s role in causing excessive patent delays. And Ford’s and their allies motive is to avoid compensating Jerome Lemelson for his patents. Lemelson is the third most prolific inventor America has produced (after Edison and Land), and he is the most prolific inventor alive today. I have created a web page with links related to Lemelson for readers at: http://www.InventorEd.org/inventors/Lemelson/

Last year both the Washington Times and the Washington Post reported how Mr. Lehman screwed up when he loudly, and in front of numerous witnesses, told one of Professor Boyle’s colleagues - Professor Joel Paul - to give Boyle the following message (Lehman’s foul language removed): "After indicating that you were angry with me because I (Boyle) had written an Op Ed in the Washington Times which was critical of your department's "White Paper," you told him to pass on to me the following message -- that you were "more powerful than [Boyle] knows" that "[Boyle] will learn I am a bad enemy." You also said that you "know a lot of people" and "can hurt [Boyle] in ways he couldn't imagine," that you would "destroy [Boyle]," would "get him," that you would "call the university" and "stop him getting tenure." During this conversation you also told my colleague that you would "rip [Boyle's] throat out" and "chase [Boyle] to the ends of the earth."

Inventors, small business interests, and most universities want these bills defeated, H.R. 400 / S. 507 are being promoted by those who abuse inventors. We want the would-be little Hitler who is "more powerful than [Boyle] knows" and several of his cronies removed!!

The combination of an arrogant attitude towards inventors by our current patent commissioner, who characterizes inventors who oppose him as "weekend hobbyists", and the statement by former PTO employee Mike Kirk, that inventors who signed the open letter to the President did so because "they didn't understand what they were signing", and a clear pattern of half-truths or outright lies by the PTO about issues such as "submarine patents" makes it clear that the upper management of the PTO should be replaced.

PRIVATIZING THE PTO

The upper management of the Patent and Trademark Office is lobbying vigorously to become a corporation. HR.1659 (104 Th. congress) purpose was to privatize the PTO. HR.1659, 1732, 1733, & 2235 were all combined into HR.3460 in the 104 Th. congress at the last minute, and when it failed to pass they reintroduced it as H.R. 400 / S. 507 in the 105 Th. congress.

The PTO upper management present many reasons why this would be an improvement but the real reason is to distance themselves from Congressional oversight. This attempt clearly violates our constitution because the patent process is quasi judicial.

Privatizing the patent office will lead to ever higher costs. The patent office plans on spending $2 billion to construct a new complex. An incorporated PTO will be as efficient and accountable to Congress and the American public as our postal system, a situation I hope doesn't happen.

No one would advocate privatizing our Federal court system, and since the patent office serves a similar function it is not appropriate to privatize the PTO.

Sixty percent of the National Inventor Hall of Fame inductees were selected for inventions that occurred while they were independent inventors. Only 29% were corporate inventors, some of whom are also independents who incorporated. Higher patent office fees make it increasingly difficult for independent and small business inventors to patent their inventions. Small entity inventors are the backbone of job creation.

Stripping the patent examiners of their civil service protection will make the whole patent system very susceptible to outside influence. Current PTO management has been influenced more now by large corporations than at any other time in our history. It is crucial that we stop the outside influence. Loss of PTO employee civil service protection will make the patent process very susceptible to outside influence. This will cause patents to be granted that should not be issued, and cause patents that should be granted to be denied.

Patents will be unenforceable for anyone except the largest companies. Inventors such as I will abandon innovation. America's declining standard of living will accelerate.

One reason that America is the worlds biggest source of inventions is that we attract the best and brightest from other countries. I suspect that America will stop being the beneficiary of the brain drain and that we could even end up being an exporter.

LARGE CORPORATE MOTIVES TO WEAKEN PATENTS

While inventors still face many obstacles in defending their intellectual property rights, they have made progress during the past ten years. The creation of Court of Appeals for the Federal Circuit (CAFC) resulted in effective enforcement of patents. Prior to it's creation, individual judges would only hear a few patent cases in their careers. The CAFC heard many patent cases and recognized the pattern of large corporate abuse of small entities, and their rulings reflected that knowledge. Corporations that never recognized inventors rights started losing large cases.

Patents were virtually unenforceable for the small business from about 1940 through the mid 1980’s. After the formation of the CAFC in 1982, patents again became enforceable. Corporate down-sizing created an incentive for many former corporate inventors to become independent inventors. These independent inventors started new companies based on their inventions, and/or licensed the inventions to other small businesses. The big guys found themselves on the outside looking in. Big business needed the technology that these new companies were selling. My experience is that eighty percent of those big companies follow their well established habit of simply appropriating the technology.

Unfortunately for them, CAFC started upholding stunning awards, and because of the long delays in patent litigation, the infringers are faced with huge liabilities. Recent examples of such awards are:

1) Celeritas versus Rockwell, $115 million in Celeritus’s favor.
2) Fonar versus GE, $128 million in Fonar’s favor.
3) Hayworth versus Steelcase, $212 million in Hayworth’s favor.

It is unfortunate that many large companies would rather weaken patent law, which would sacrifice all of America’s long term prosperity in order to gain a short term advantage against inventors. In actuality big business should be viewing those inventors as the business community’s fountain of youth.

The inventor’s progress is alarming to those multinational businesses and governments that had become accustomed to unlawfully appropriating individual's and small business's intellectual property. They are spending large sums of money attempting to gut our patent system, to render patents once again unenforceable so that they can take the benefits of American ingenuity and the jobs for their profit.

AN INVENTORS VIEW OF MANY LARGE CORPORATE MANAGERS

Inventors have a unique perspective about the management of many large corporations. Only one percent of independent inventors achieve commercial success. Contrary to popular belief, modern day inventors who are commercially successful spend five percent of their time inventing and the other 95 percent enforcing their patent rights.

Many successful American corporate inventors left large corporations because we were sick of short term goals, and the profit every quarter at any cost mentality that is the norm in many of today's corporations. Most inventors see this trend of management mentality as a cancer that is destroying the infrastructure of America's businesses.

Our corporate experience is one of the reasons for our commercial success as an inventor. The key to that success is our intimate understanding of what motivates many of today's upper managers. To understand our success you must see the managers in the same light as we do.

A CEO of an American subsidiary of a multinational corporation told me that a settlement would lower his bonus and that litigation was funded from a separate pot. He suggested that I go ahead and sue them, that it would take at least three to four years for the case to be decided, and that he could change jobs if I prevailed. This CEO was more honest than most about his motives, but I am sure that many others use the same reasoning process.

Many corporate managers are basically like teenage boys. They have a strong urge to mark every tree in sight. They are excessively aggressive and they often let their egos interfere with good judgment. They are galled by the notion that an inventor would have the nerve to demand compensation for their creativity. These corporate managers immediately set out to teach the upstarts a lesson and almost always underestimate our abilities. Their attitude causes them to make major errors of judgment that ultimately cost their companies dearly.

The fact of the matter is that there are many similarities between teenagers and many of today's upper managers. They both frequently have a poorly developed sense of right and wrong and are often dishonest. They both allow excessive aggressiveness to get in the way of rational decisions. Both are impulsive. Both are motivated by short-term gains. Both feel they should not be held accountable for their actions. Both mask feelings of inadequacy with bluster. Both are prone to ignore problems hoping they will just go away.

Many of America's largest corporations are lumbering dinosaurs who fail to nurture creativity and act like school yard bullies. Many conduct smear campaigns against America's most prolific inventors while attempting to steal their work though litigation. They simultaneously attempt to weaken our patent laws, thereby aiding foreign interests who want to take advantage of American's creativity. This is one more sign of short-term goals on the part of our largest businesses. What multinationals fail to realize is that they need independent inventors. We are the source of new ideas that sustain all businesses.

IMPACT ON AMERICA

This is not an abstract problem that only affects inventors. The issue affects every citizen of our country. Loss of the economic benefits of Yankee ingenuity will cost Americans decent paying jobs and will doom our children to a much lower standard of living.

America's economic might is a direct result of our producing more inventors per capita than any other country in the world. Our culture is known for producing independent thinkers. Other cultures have studied our educational system in the hope of learning how to produce inventors.

A healthy economy is dependent on a diverse mix of both startup companies and large businesses. If we allow laws to be changed that benefit large companies at the expense of small companies who are the source of 75% of innovation, we will have far fewer startups and fewer inventions.

Large companies have become very short sighted in the last ten to fifteen years. Their quest for ever higher short term gains has radically altered business practices. All of us know persons who have been displaced from jobs by down-sizing. Many people are not aware that Research and Development staff persons are being let go in greater numbers than many other groups. This is a result of large companies only funding small improvements that will give them an immediate return on their investment.

The Wall Street Journal published "Corporate Research: How Much Is It Worth? Top Labs Shift Goals To Fast Payoffs by Gautam Naik on 5-22-95. The article tracks R&D spending from 1990 to 1994 at AT&T, GE, IBM, Kodak, Texaco, and Xerox. The article describes how total R&D spending at these companies has been cut from 11.3 billion in 1990 to 8.45 billion in 1994. The picture is even worse if we look a peak spending in the 1990 to 1994 time frame and compare it to the spending in 1994 in which case spending dropped from 12.19 billion to 8.45 billion, or a 31% drop. The article states "the biggest U.S. corporations have cut back sharply on research into "basic science" -- the exploration of how nature works at a fundamental level -- to pursue short-term goals and to commercialize products more quickly. Corporate labs, home to 75% of the nation's scientists and researchers, are replacing a cherished culture of independence with a results-oriented approach." the article says "Already, U.S. companies are falling behind"

Dr. Albert Link, an economics professor at the University of North Carolina at Greensboro warns "It's a short-term response aimed at keeping stockholders happy. Without question this will hurt American competitiveness."

These trends are causing many inventors to form small companies to develop ideas for which large companies are not willing to make a long term investment to commercialize. Large companies problem is that they want to be able to take advantage of the small companies work without fairly compensating them.

Everyone understands that a farmer who consumes his seed corn is foolish. Small companies seed the market. If multinational companies are successful in crippling the patent system all Americans will suffer a decreased standard of living.

CONCLUSIONS

I have been an independent inventor for ten years, the last six full time. I am appalled by the actions of the current Administration and the upper management of our Patent & Trademark Office (PTO). The PTO is a classic example of a bureaucracy that is out of touch with the realities of the marketplace and the needs of inventors.

Their actions during the last few years have been extremely damaging to innovators. PTO management is motivated by their desire to increase their authority over clients, their budget, and to avoid accountability for their own deficiencies. And in combination with political pressure by lobbyists (that are paid by multinational corporations) and foreign governments the PTO has been convinced to back measures that will allow foreign interests to take our inventions and the jobs and profits that those inventions create.

A coalition of inventors joined with the Alliance for American Innovation to vigorously oppose the changes to our patent laws. Those changes are being promoted by multinational corporations, foreign governments, and their lobbyists or agents. Inventors fighting to preserve our patent system include numerous members of both the National Inventors Hall of Fame and the American College of Physician Inventors, several Nobel Laureates, and thousands of other inventors who recognize that we must stand up to preserve our patent system. Several inventors attended GATT hearings, and numerous members (including myself), have lobbied in Washington against changes to American patent law that will damage American innovation.

I urge all persons who have an interest in these issues to contact the Alliance for American Innovation.   Please encourage family, friends, and business associates to call and write their representatives. It is especially important that inventors and companies who depend on innovation, to personally contact their representatives and also representatives of any other area upon which their activities have an economic impact. If you are not from their district make sure you identify how you impact their area.

Also contact Claude Burky  (fax 202 395-3911, Burky replaced Papovich) or Ms. Ritter (replaced Tom Robertson fax 202 395-3639) at the office of the United States Trade Representative that has been assigned by the Clinton Administration to review inventors concerns about our patent office’s policies. Please urge them to support the Alliance’s efforts to protect our patent system.

All concerned parties should write President Clinton and their congressional representatives to support Congressman Dana Rohrabacher's bill as it is designed to repair the damage caused by the unnecessary provisions in GATT's enabling legislation that harm our ability to create desperately needed new jobs. Please oppose H.R. 400 / S. 507.

Thank You, Ronald J. Riley 

For more information contact:

Steven Shore, President
Alliance for American Innovation
Washington, DC 

Ronald J. Riley is president of Riley and Associates, Inc., a Grand Blanc, Michigan based company and is an inventor that specializes in industrial controls and product development. He also has patents in process in diverse areas such as foot wear, telecommunications, exercise equipment, and numerous other consumer products. He is President of the Professional Inventors Alliance, President of the Advisory Board of the Alliance for American Innovation, an advisory board member for Intellectual Property Creators, a member of the Union of Concerned Scientists, The Planetary Society, and the Society of Manufacturing Engineers. Ronald J. Riley holds five patents related to electrified monorail controls, with other patents pending. He has over 20 years of engineering experience with the last 15 in industrial controls. That experience includes analog and digital design from board level to systems integration, with extensive software background covering assembly to high level language programming. He has worked for the last six years as a consultant and also as a manufacturer of monorail control products. He often writes for engineering trade and inventors publications. His residence and 3000 sq. ft. laboratory are located on a 114 acre tree farm in Grand Blanc, near Flint, Michigan.

Revision 10-21-97, MULTI91.SAM

Copyright 1995-98 by Ronald J. Riley, copies made be made for non- commercial individual use. This document may be posted on Web sites. It is frequently updated to include new information, check with the author for the most current revision.

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