The Market Institute President Charles Sauer has a new article in Real Clear Markets on a bill recently introduced in Congress called the PREVAIL Act. If passed, it will help level the playing field for inventors, most notably by attempting to fix the Patent Trial and Appeals Board.
“The economy is hard to understand. How does something that was basically a college prank turn into a billion-dollar company? How does a market move from one person making a final product to a diverse production structure with many different inputs? Even more confounding than markets in general is the question of why innovation takes place at all. Why would someone risk everything that they have to make goggles that make cutting onions easier? How would someone consider using fax technology to make phones smart? The answer from this Congress is now the PREVAIL Act, which gives power back to the inventor instead of the pirate.
This question of innovation was raised as far back as our nation’s founding. How would America become an innovative country?
The answer they came up with was the patent, the only explicit right contained in the original Constitution. However, unlike in the Monarchy that we had separated from, patents weren’t going to go the friends of the Crown. Patents would be awarded to the inventor. This simple choice was what created an innovation boom in our new country. The founders provided the incentive needed for entrepreneurs and innovators to risk everything. The founders gave these inventors ownership of their ideas.
It wasn’t without controversy. Thomas Jefferson was famously skeptical at first. However, it was evident to Jefferson almost as soon as the patent office began accepting patents what this incentive would mean for the country. The flood of innovation would help lead our country to prosperity. And, our patent system enabled it.
In the ensuing centuries changes and amendments have been made to the system, court battles have been fought by both inventor and pirate. The patent system has matured, and the U.S. economy has continued to grow.
However, one constant is that the non-innovative, the followers, and the pirates have always wanted to weaken the patent system. They have wanted to make it harder to defend patents, to make it less profitable to innovate and, most importantly, to take away the important incentive that our founders were forward thinking enough to include in the Constitution.
Over the past several decades this war has been raging. Big tech companies and foreign countries have attempted to weaken patents and have largely won the battle. Most remain unaware that the war is even happening, and that America is losing its innovative advantage, but inventors and investors understand this all too well. Patents are less valuable now than they were just fifteen years ago. They are harder to quantify, harder to get, and harder to defend.
Thankfully, a few congressional leaders have picked up this unpopular torch and are fighting for innovators and the future of the American economy. These leaders have seen how far the pendulum has swung and they are attempting to right the wrongs of the last several decades and once again provide innovators the incentive to innovate.
The PREVAIL Act, as introduced in the Senate by Senator Coons and Tillis and in the House by Congressman Buck and Congresswoman Ross, helps repair the patent system and brings us back toward a more level playing field between the innovators and the pirates. It does this by attempting to fix an administrative court, the Patent Trial and Appeal Board (PTAB), that was created in 2011 to make patent litigation cheaper. Instead, PTAB has merely been another tool that Big Tech and other countries have used to strip innovators of their patents. And, when PTAB was first created, the head of the U.S. Patent and Trademark Office (USPTO), Michelle Lee, abused the new court to take patents away from inventors in devious ways that Congress could have never foreseen.”