A quiet storm is brewing over plans to change American patent law. Launched with little public notice, the new patent proposals have been engulfed in controversy since last September, when 27 Nobel laureates announced their opposition to legislation introduced by Senator Orrin Hatch (R-Utah).
Hatch's bill, S 507, the complex Omnibus Patent Act, has a similar counterpart that has already passed in the House. Backers include a coalition led by companies such as Intel, IBM, GE, Microsoft, Ford, and GM, with additional support coming from several Japanese conglomerates. At the forefront of the legislation is a proposal known as "prior-user rights," which would create exceptions to the temporary but exclusive intellectual property right that is the hallmark of US patents. With prior-user rights, a company caught infringing on another's patent could claim that the idea had been in use as a trade secret, thus making it possible to market similar products without paying royalties to the patentee.
Prior-user rights would undermine the core concept behind the US patent system – the grant of an exclusive property right in exchange for public disclosure of an invention's details. Inventors and venture capitalists warn that if the proposal becomes the law of the land, capital markets for small, entrepreneurial start-ups will dry up. But more important, critics ask, why tamper with a good thing? After all, the US patent system yields more breakthrough innovations than all other nations combined.
This article originally appeared in the February issue of Wired magazine.
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