By • Newsmax
One of the keys to America’s growth from 1776 to becoming the world’s strongest, most robust and innovative economy within a little more than 100 years is that our Constitution placed importance on both traditional land property rights and intellectual property rights.
Early in America’s history, land-oriented property rights caused our vast nation to be developed productively and efficiently. That fueled economic growth and helped “ordinary” Americas provide for themselves and accumulate some measure of wealth.
But as ideas, inventions and innovation became the primary engine to drive the economy, our nation’s focus on protecting intellectual property helped “ordinary” Americans not only provide for themselves, but also created a vibrant economy where “ordinary” Americans could aspire to and achieve the American dream.
Our Nation’s Founders were wise to include protecting intellectual property rights as one of Congress’ enumerated powers. And the First Congress was wise to create a system for copyright, patents, and the protection of intellectual property rights. That laid the groundwork for America to become the world’s greatest economic power.
The United States has been a leader in innovation since the early 19th century. This is because as a nation, we have respected intellectual property rights and thus incentivized and encouraged innovation. When there is economic and regulatory freedom and when property rights are respected, private enterprise will invest billions of dollars to innovate and create new technologies to solve real-world problems and provide valuable goods and services to the public.
But even something clearly good, useful, and productive can be misused and distorted and become a negative. Such is the case in the intellectual property rights arena. For example, the U.S. Patent and Trademark Office — combined with judicial activism — has created an untenable situation where design patents have morphed into a situation that does more to prevent innovation and stop competition than to protect or encourage real innovation.
Design patents have historically covered the design of an entire patented product. But now, unelected bureaucrats and some unelected judges have changed the concept of a design patent to mean that individualized parts of the larger patented product are also covered. One area where this causes consumers real problems and imposes real costs is with automobiles.
The morphing of the actual meaning of a design patent has allowed automobile design patents to mean that even parts like headlights, taillights, fenders and bumpers are covered by the patent. This means that consumers cannot buy alternative or competing parts. That means repairs cost more and consumers have fewer choices.
This problem was highlighted by the Consumer Federation of America’s Jack Gillis who testified before Congress:
“[C]ar companies are now using design patents, not for the important and legitimate protection of the overall design of their vehicles, but to prevent competition when it comes to getting the parts we need to repair our vehicles.”
Our patent system has traditionally served America well. In fact, it has served the entire world well. It fueled tremendous innovation and creativity and it provided tremendous competition which provided Americans with jobs, economic security, helpful products and medicines.
But the world has also benefited. The medical cures that were innovated in America under our system of intellectual property rights now cure diseases all over the globe.
But when unelected bureaucrats distort the law and the system and unelected judges stop adjudicating the law, but instead undertake to rewrite it, America’s system of constitutional government is subverted. Congress has the sole power to create our patent laws.
The Patent and Trademark Office has the power to implement those laws, but not to rewrite them. And judges have the power to apply the law and facts to disputes and to adjudicate them. But judges do not have the power to rewrite laws and essentially act as a super-Congress.
When the Patent and Trademark Office and judges act outside their authority, it is the American consumer who suffers. But those who have the resources to lobby bureaucrats and to fund endless litigation stand to benefit when our laws are bent and morphed to benefit them.
If your car needs a repair or if the hard drive on your computer needs to be replaced, the question is: Should the government be working to make it so that you cannot get the part you need except from one source? Being forced into one option means that option will be more costly and over time the quality will decline.
Competition forces all competitors to offer as much as they reasonably can for the best possible price. A lack of competition means that a single-source provider can provide whatever quality it likes and charge whatever it can get away with.
Unless Congress does something to stop the abuse of design patents and prevent partial-product or fragmented design patents from essentially eliminating aftermarket parts, consumers will face a shrinking set of options and costs will rise and even insurance premiums will rise. Congress needs to exercise its constitutional power to fix our patent laws.
By • Frontiers of Freedom
Under our current law, federal charges can be brought for arson when a person willfully and maliciously sets fire to a building, structure or vessel. Federal bank robbery charges must include evidence that a person, by force or intimidation, takes or attempts to take something of value belonging to a bank, credit union, or any savings and loan association. And if a new bipartisan bill from two senators were to be enacted, a prima facie case for “unfair or deceptive” conduct would require the government to show that a person…filed for a patent.
Yes, we’ve somehow reached the point where inventing something is only OK if you don’t plan to protect that invention with a patent. Maybe the next step will be to outlaw invention altogether, but I suppose we can be thankful we’re not there yet. For now, Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT) have proposed a new law where if you have discovered a way to help some sick patients and then invest capital in new research that may have the effect of helping additional sick patients, you are presumed liable under the antitrust laws if that new investment leads to a patentable invention.
To ground us in reality — sometimes you have a medicine that helps a group of people get better. In those cases, it should not only be legal, it should be encouraged to pursue additional research to see if that medicine can be improved further, or help people fight other diseases.
After making such an investment, can you hope to argue your way out against the government antitrust enforcers? Good luck with that, since you are starting with presumed guilt. But perhaps it would be wiser, before you undertake resource-intensive research, to check in with the newly installed innovation czars at the Federal Trade Commission. In this way, the FTC will decide who lives and who dies. It’s a reincarnation of the Obamacare death panels, only with FTC bureaucrats instead of bureaucrats appointed by the Department of Health and Human Services.
Companies would also be well advised to study what disease areas are most likely to elicit the sympathy or personal interest of FTC commissioners or their immediate family members and tailor their R&D budgets accordingly. If your research turns out to be insufficient to meet the FTC standards for a substantial benefit, you may not only have wasted your money, you may have committed an antitrust violation.
But what about the Constitution? Well you see, our nation’s founding fathers clearly were unaware of the all-knowing powers of the Federal Trade Commission when they specified a right to one’s own inventions (your Intellectual Property) as the only individual right described in the text of the Constitution. And the icing on this big-government cake is that the FTC can bring this new charge in their kangaroo court of FTC administrative litigation, where the FTC acts as prosecutor, judge and jury.
This bill claims to be about prescription affordability (it is titled the Affordable Prescriptions for Patients Act, or APP Act), but nothing in it makes prescriptions more affordable. The most likely direct effect on pricing will be the cost of parking near the FTC, while diminishing the property rights of American innovators. Antitrust lawyers will certainly derive some benefit, but that could increase their hourly rates if demand for their services goes up. So maybe the APP acronym is really for the Antitrust Practitioners Paradise created by this legislation.
by Randolph J. May and Seth L. Cooper • Free State Foundation
Securing protection of American intellectual property (IP) rights internationally is an economic imperative. It is also a constitutional duty. In today’s information economy, copyrights and patent rights provide critical financial investment incentives for research and development of new products and services. And IP constitutes a potent source of economic value and prosperity. According to an official U.S. Department of Commerce report, IP-intensive industries in America generated an estimated $5 trillion in revenues in 2010 alone, providing over 27 million jobs. Since then, those figures almost certainly have grown. Another report estimated that the copyright industries alone contributed $1.1 trillion in value added to the U.S. economy and employed nearly 5.5 million workers in the U.S. in 2014.
As IP becomes increasingly vital to our nation’s wealth and prosperity, the need to ensure its protection on a global basis increases correspondingly. The American economy suffers staggering losses each year to international IP theft. According to the IP Theft Commission (2013), these losses likely exceed $300 billion annually. IP theft is an injustice to the IP owners, diminishes economic prosperity, and undermines job opportunities. Indeed, this is a reason why it is so important to conclude international trade agreements, such as the recently-negotiated Trans-Pacific Partnership, that contain meaningful intellectual property protections. Continue reading
by George Landrith • Breitbart
Trial lawyers trying to hold parts of the legal system hostage to make money is nothing new. It always happens the same way: a few creative lawyers figure out how to exploit legal loopholes; then abuse those loopholes to enrich themselves at others’ expense until someone stops them. Along the way, they come up with all sorts of creative justifications for what they are doing, claiming it’s actually positive and beneficial. Behind the scenes, they convince or pay off special interests to lobby for delays in changing the law that would close their loopholes and stop the cash flow.
Fortunately, conservative Members of Congress and state legislators can usually be counted on to lead the charge to dismantle the trial lawyers’ schemes. One of the last great examples was the passage of the Private Securities Litigation Reform Act (PSLRA) 20 years ago, over the objections of the lawyers and a Democratic president’s veto. That law reined in the frivolous securities litigation that was doing nothing but lining lawyers’ pockets. Today, this has been replaced by a new threat. Continue reading