As a guest post, we offer this Op-Ed in the Sept. 11 edition of the Wall Street Journal from Don Rosenberg, the general counsel at Qualcomm and an attorney who's spent decades using the law to nurture growth in technology:
With Congress back in session, lawmakers are drafting new patent legislation in response to a perceived increase in patent-infringement lawsuits lodged by "trolls" who are accused of being more interested in payoffs than in progress. Judging by the number of proposals, the current patent regime may need improvement. But the stakes are high, and Congress must be careful not to get patent reform wrong.
As a lawyer who has helped companies protect intellectual property, and who has defended against many frivolous lawsuits, I'm worried. If lawmakers alter the patent system without a close examination of the facts and history, we could end up with a law of unintended consequences, wrecking a patent system that has nurtured innovation in the U.S. for more than two centuries.
The intellectual-property rights embodied in patents are a bedrock principle of America's economic, democratic and meritocratic values. The Founders wanted a system that guaranteed the "exclusive" right of inventors to benefit from their creativity and hard work. The aim, written into the Constitution, was to make an invention's marketplace value an incentive "to promote the Progress of Science and useful Arts."
At Qualcomm, my employer, the legal protection of patents has fueled our virtuous cycle of innovation: investing in R&D, obtaining IP protection, licensing our technology broadly and reinvesting in R&D. Each year, more than 20% of Qualcomm's revenue is plowed back into developing and commercializing the mobile technologies that are transforming modern communications.
Without patents, Qualcomm couldn't take the risks of working on countless potential inventions for years at a time to come up with the one that succeeds. Without patents, we could never have become a company that employs more than 27,000 people, over two-thirds of whom are engineers and scientists, most located in the U.S.
This is why I worry about changes that could weaken the ability to protect inventions. If that happens, how will the next Qualcomm attract the support and funding required to bring that next big idea to the marketplace?
I know Congress has heard from companies that have been subjected to too many patent-infringement lawsuits in what sometimes amounts to abusive litigation. Qualcomm, too, is a defendant in many lawsuits, and as I write this we are a plaintiff in none.
Yet in evaluating any proposed changes to patent rights, Congress should take care to operate with a scalpel, not a cleaver. For instance, most widely quoted studies about patent trolls label as a "troll" any research or educational entity that invents a technology but doesn't manufacture a related product. How will the proposed changes that make it harder and more expensive to enforce these patents affect small inventors, universities and companies that legitimately seek to protect their intellectual property rights? New legislation must take care not to sacrifice their rights or those of other inventors.
Are the proposed changes so broad that they do more harm than good? Three proposals in particular could play havoc with patent holders' ability to protect their intellectual property:
Directions to courts to stay judicial proceedings against vendors and end-users of a product when an infringement suit has also been filed against a manufacturer "upstream" in the distribution chain. I understand where this idea originates: Innocent mom-and-pop businesses should not be sued merely for purchasing patent-infringing products. But such stays would also be open to abuse by deliberate infringers "downstream," who could postpone for years the need to compensate patent owners. Justice deferred is justice denied.
Congress also is considering rules that would diminish protection for software patents or patents for other "computer enabled" technologies. There are misperceptions that software patents cover only quickly made, and quickly outdated, apps.
Yet many software patents are the fruits of years of expensive research that produced, for instance, GPS guidance, video compression for online movies, language translation and basic communication functions for cellphones. Many technological innovations are now implemented in software itself, rather than hardware, to make updates easier and less expensive for consumers. Those inventions deserve equal protection.
Some proposed changes would make it harder for the International Trade Commission to issue exclusion orders barring patent-infringing products from importation into this country. But IP theft has been identified as a major threat to the U.S. economy and national security. ITC exclusion orders are an effective tool for protecting domestic industries from imported products that amount to foreign theft of American intellectual property and must remain an available remedy.
That brings up another key question for Congress: Will the proposed changes lead to reduced protection for U.S. intellectual property overseas? The U.S. innovation economy, and the patent system that supports it, is the envy of the world. It is one of the reasons so many foreign scientists, engineers and other inventors want to come here. Officials abroad frequently look to Washington's treatment of patent rights to determine their own enforcement policies. Policy makers here must keep that in mind before weakening IP protection in ways that give foreign governments a justification to devalue IP rights in order to benefit their own homegrown companies.
The urgency given to these issues on Capitol Hill is understandable, but the patent system is too precious for the problems to be addressed hastily. As Irwin Jacobs, the inventor who co-founded Qualcomm in 1985, once put it: If we place short-term gain ahead of long-term innovation and economic growth, "we'll measure the cost by the bells that don't ring, the cures that are not developed and the technologies that aren't invented."