Patent Deform will Serve Neither U.S. National Security or Economic Interests

(Washington, D.C.): In the post-Cold War period, even people who should know better
seem to
believe that economic performance and national security are separable, if not mutually
inconsistent, priorities. The fact is that, properly understood, the two are inextricably intertwined
— and, arguably, this is more true today than ever.

The U.S. Patent System: Enabling American Innovation

After all, at the dawn of the 21^st Century, the obvious nexus for U.S. prosperity
and security is
technological innovation. And at present, as for much of this country’s history, the
climate for
fostering such innovation has been created by the American patent system.

This system, established under the Constitution, has rewarded inventors for sharing their
creativity with others by assuring that the rights to earn royalties from their breakthroughs would
be protected for seventeen years. The result has been a position of unrivaled U.S. dominance
with respect to intellectual property. By some estimates, we own ten times as much as the rest of
the industrialized world combined.

In the national security field, this dominance has rarely been more evident than it was in the
recent coalition warfare in Serbia. Due to the disparity in high technology, many among the
allied militaries were unable to operate on a par with their American counterparts. In some
cases, the result was to compromise the mission’s effectiveness; in other cases, the safety of U.S.
personnel was jeopardized.

Target America

The disparity has not only made the United States technology base the envy of the world. It
has
also made it a preeminent target for the world’s intelligence services. According to the FBI,
at
least 23 countries are actively engaged in industrial espionage and dual-use technology
diversions in this country. The recently released report by the select House committee
chaired
by Rep. Chris Cox, Republican of California, illuminated some of the more successful of these
operations conducted by Communist China in recent years.

Unremarked in that report, however, was one narrowly averted windfall for the Chinese.
In
1996, Bruce Lehman, who was serving at the time as U.S. Commissioner of Patents, sought
to give Beijing CD-ROMs containing the entire American patent data base, some 160 years
of valuable information. This outrageous idea — like so many other initiatives taken
by the
Clinton Administration as part of its campaign contribution-lubricated policy of “engagement”
with the PRC — was reportedly rationalized as a means of helping the Chinese avoid infringing
upon U.S. patents!

Unfortunately, the Chinese and other foreign competitors are not interested in preventing
infringements on Americans’ ownership of U.S.-produced high technology. To the contrary,
they are determined to acquire and exploit such technology in any way they can.

The Campaign to Dumb Down the Patent System

Toward this end, they have mounted a sustained and multifaceted effort — one that is far less
obvious, but every bit as insidious an assault on America’s economic interests and national
security as the episodes documented by the Cox Committee. The objective is to weaken the U.S.
patent system by making it over (read, dumbing it down) so that it will conform to the inferior
approach utilized with such dismal results by our international competitors.

The blueprint for such an effort was mapped out in 1993 by the Japanese Patent Office,
which
presides over an economy that has, in the past at least, proved somewhat better at exploiting
advanced American inventions than at coming up with its own. The Japanese paper proposed
that its U.S. counterpart change the way it does business so as to bring it more into line with the
practices followed in Japan and most of Europe.

The danger, were the U.S. to adopt these changes, is that it could literally kill the hen that
lays
the golden egg of our competitiveness. This could happen if, for example, the rights of large
multinationals and foreign governments were allowed to take precedence over the sorts of
protections and rewards that have traditionally inspired American inventors.

With Friends Like H.R. 1907…

Regrettably, the U.S. government has already agreed to adopt some of these changes
pursuant to
the GATT accord. Others — including some particularly pernicious ones — are now being
advanced in the name of “patent reform” in legislation now awaiting action in the Congress.
Patent deform might be a better way to describe H.R. 1907, the so-called
“American
Inventors Protection Act of 1999.”

Far from protecting American inventors, the restructured U.S. patent system contemplated by
H.R. 1907 seems designed to protect the interests of multinationals and foreign governments and
other entities bent on gaining earlier, freer and cheaper access to our inventions. This would be
abetted by a number of the bill’s provisions, including:

• Giving an explicit mandate to the Patent Office to promote the “export of goods
  and
  services for those companies that rely on intellectual property.” While increased
  exports
  is generally a beneficial result of American innovation, making their promotion an explicit
  objective of the Patent Office may skew the patent-granting process or otherwise open up its
  review and decision-making processes to pressures that could prove inimical to such
  innovation.

• Virtually every title of H.R. 1907 opens up new opportunities for
  litigation that could
  prove back-breaking for individual or small business inventors going up against well-financed
  and determined competitors.

• The patent office’s director would be granted excessive authority,
  including the right to
  contract out to foreign governments and international organizations functions on behalf of his
  organization. In important areas, his decisions would not be reviewable or subject to adequate
  congressional oversight.

The Bottom Line

For these reasons, among others, twenty-two American winners of Nobel Prizes in
economics
and scientific research have publicly opposed similar legislation, claiming that it poses
a
fundamental threat to the national security of the United States and the integrity of scientific
research in this country. Their expert opinion about the contribution that the present patent
system makes to both endeavors must not be lightly disregarded.

The proposed dumbing-down of the U.S. patent system would be a triumph for those who
object
to the principle of American exceptionalism. They believe that U.S. sovereignty and national
interests should be subordinated to the lowest-common-denominator favored by champions of
international organizations and global enterprises. Such a course of action may or may not profit
a relatively small number of large corporations. What is certain, however, is that the country as a
whole will suffer, in terms of its economic well-being and, in due course if not immediately, in
terms of its security.