TCS Daily


When It Comes to Patents, Small Is Beautiful

By Jonathan Zuck - May 11, 2005 12:00 AM

WASHINGTON -- There's a reason that juries are often sequestered. It's to separate discussions of the truth from the comparatively superficial environment of media and politics. In an attempt to apply this theory to the public policy world, we piled a bunch of thought leaders and decision-makers on a bus, hit the gas, and didn't stop until we were outside the rarified air of the Beltway.

We ended up in a secluded spot near Cambridge, Maryland where representatives from Capitol Hill, academia, the legal community and the technology industry had the opportunity to delve into the big issues surrounding the intellectual property system in the Digital Age.

The arrival of the so called "Digital Age" has had far reaching implications across the world economy, but few things have been debated as fiercely as its effects on the existing intellectual property regime. While the system was created to ensure continued incentives for innovation, some believe the system may be restricting innovation in today's environment. Thus, the big questions before our distinguished group were, "How is the existing intellectual property regime working in the Digital Age," and "What can we do to make it work better?"

Given the growing interest on Capitol Hill, the hot topic at the conference was reform of the patent system. During the weekend, it quickly became clear that there are a lot of constituencies to serve and a natural tension between smaller and larger businesses. While there was agreement among the differing groups on about 80 percent of the reforms, there was significant debate on prioritization and the areas of legal leverage and access to the system.

Brad Smith, General Counsel for Microsoft, and Sanjay Prasad of Oracle both outlined the value of the patent system to large software firms while describing some the problems they see with patent litigation. On behalf of the small and mid-size firms he advises, Andre Carter of Irimi Corporation argued that the patent system is even more valuable for small firms and any efforts to reform the system should focus on the effects on entrepreneurs. Finally, Larry Rosen, the former general counsel for the Open Source Initiative and Dan Ravicher of the Public Patent Foundation, argued that we must also consider the effect of patents on non-patent holders and ways to improve the fairness of the system for those groups.

One of the few areas of clear agreement was that unless the system was made to work for small businesses, the system would not work at all. With 99% of the employees in this country and responsibility for the majority of job growth, small businesses are critical to American innovation. They produce more patents per employee than their larger counterparts and their patents are more than twice as likely to be referenced or licensed by others. To preserve this contribution, small businesses need patent protection to protect their ideas from larger competitors, provide leverage in partnership discussions and encourage investment.

To ensure that the system works for small firms, patent reforms should focus on improving the certainty and accessibility of the system. Creators need confidence that the IP protections they receive are reliable and predictable. If a patent is issued, it's important that it be a good patent and therefore defensible and that someone else's patent is not frivolous and distracting. The system also needs to be available to all creators, large and small, to allow innovation to flourish throughout the economy.

There is still debate to be had about how best to accomplish greater certainty and accessibility but at least we know the right questions. It's amazing what you can accomplish when you throw a bunch of smart people on a bus and get them out of town...especially this town.

Jonathan Zuck is president of the Association for Competitive Technology, an international trade association for the information technology industry. Transcripts and audio of ACT's Intellectual Property and Technology Summit will be soon be available on www.actonline.org.

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