Just when you thought it was safe to glance away from Congress for a moment, another poisonous issue raises its ugly head in the Senate.
And it’s on a very, very short fuse – September 6, to be exact, the very day the Senate returns from vacation.
Yes, we were wrong to think that just because Congress is on vacation that we were safe to check in with how the kids feel about going back to school, or work on that sorry household budget, or enjoy the staycation. As if the administration and Congress had not soured the economy enough already, on the Senate’s very first day back in session, Harry Reid plans to make our challenged economy much, much worse.
The “America Invents Act” is more poison for the US economy
It’s known as “patent reform” (HR 1249/SB 23) and it’s anything but reform with it’s current Section 18 intact. It’s a bald-faced sellout to Big Banking and Wall Street. There are several difficulties with the bill, but the one that jumps out at me is the fact that it’s simply a major job-killer. And for unconstitutionality, it’s a two-fer.
Target: Hold and Amend
Through the kind graces of Sen Tom Coburn (R OK) the Senate version of the bill is currently on hold, but that won’t last when Reid moves for cloture. We should vocally support Coburn in insisting that the bill be brought to the Senate floor in amendable fashion so Section 18 can be removed and the remaining bill be given full public consideration, then passed. As noted above, time is short, and this is our last chance. The House version HR 1249 has already passed the US House.
Section 18 is the poison pill
Normally, when we speak of a poison pill, we think of an amendment to a bill that will prevent passage. In this case, the poison is for property rights and job creation in the US.
Predictably, Sen. Chuck Schumer is the one who inserted the Section 18 language into the Senate version of the America Invents Act, and Harry Reid wants the Senate to pass the bill without knowing what’s in it, so he scheduled the bill to hit the floor in non-amendable fashion the day the Senate reconvenes.
Section 18 applies only to the electronic payment processing industry* and it gives the US Patent and Trademark Office (USPTO) the authority to revoke patents it has granted in the past. Under this measure, the USPTO can only reconsider patents that have been upheld in federal court when challenged. If the America Invents Act passes with Section 18 intact, then expect to see big banks and Wall Street challenge issuance of patents to inventors to whom they currently must pay royalties.
There’s the pay-off for the banks and Wall Street: they get out of millions of dollars of royalties paid to inventors by getting Congress to confiscate the property rights of inventors and kill plenty of jobs in the process – after a court has confirmed the validity of the patent!
How does Section 18 kill jobs?
If inventive companies get their patents revoked by the USPTO, then those companies lose their royalty revenues and go out of business and the corresponding jobs disappear. But it gets much worse. Remember, this measure applies only to the electronic payment processing industry. Can you think of any companies that process payments electronically? Venture capitalists are simply balking now at investing in new companies with new payment technology because of Section 18. Those jobs may never appear, and are certainly being delayed.
But many venture capitalists aren’t just balking at investing in new electronic payment companies, they are also hesitating to invest in any new company that will rely on electronic payment processing to receive a major portion of its revenues.
When new companies don’t form, new jobs never appear.
Then there are many established companies that will almost certainly be threatened in one way or another if patents are revoked simply because Wall Street wants them revoked. Paypal, for instance, holds at least 4 patents that I’m aware of.
Oh yeah, then there’s that bothersome Constitution thing…
As one might expect, Section 18 gives the bill some serious constitutional difficulty.
First there’s the simple concept of property rights.
The word “right” is used only once in the entire US Constitution. That’s in Article 1, Section 8, paragraph 8 granting powers to Congress:
“to promote the Progress of Science and useful Arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
Section 18 allows the USPTO to withdraw or void a patent, without due process, even if a high federal court has examined the patent, confirmed it, and ordered transgressors to pay the patent-holder damages for unlicensed use of the intellectual property.
The second difficulty is the separation of powers issue (noted above) raised by allowing the executive branch to overrule the judicial branch. Section 18 does not simply allow for the possibility of violation of the separation of powers, it requires it in every case. The USPTO cannot consider a challenge to withdraw or void a patent unless that patent has already been challenged in court.
Violation of property rights, absence of due process, and violation of separation of powers is non-trivial in my world.
Politics is no predictor
Curiously enough, politics is no predictor of the position a given member of Congress is likely to take on Section 18. Obama and Reid are for it, but Former House Speaker Nancy Pelosi and uberliberal Maxine Waters are against it. The best predictor of a politician’s position on this issue is to look at campaign contributions. You can figure that one out.
Unexpectedly, even Rep. Maxine Waters says Section 18 “is just wrong.”
Since we know that politics is no predictor on this issue, there’s nothing for it but for us to contact all our Senators and insist they they help Sen. Tom Coburn keep a hold on the bill until Senate Majority Leader Harry Reid agrees to allow the bill onto the Senate floor in an amendable form. Then insist that the bill be considered in the full light of day, with full public disclosure, before passage.
Action Center Available
My good friends at TEAPAC – the Pasadena Patriots in CA have taken the lead on this issue. They’ve erected a web site called jobsNOTbanks.com which contains on online petition you can sign and an online Action Center with a sample letter to help you contact your Senator.
If you are a new media/social media type or a blogger, there’s help for you there, too.
If we follow our normal drill of waiting until the Senate has been back in session for a couple of days before we check in on what they are doing, we’ll have already lost this battle, and that’s exactly the way Senator Harry Reid has planned it. True to form, he only seems to be happy when stealthily trying to pass measures that will deprive us of our rights and harm us economically.
Spread the Word
The jobsNOTbanks.com Action Center also has tools to help you spread the word to your friends and this part is important: We only have 12 days to get the word out and get this travesty in the Senate stopped. We’ll have to overcome the natural inertia activists usually feel when Congress is allegedly on vacation.
If we fail to slap ourselves out of our August angst for activism now, we’ll see more jobs disappear, far less investment in new jobs, and a Congress that feels safe in confiscating still more of our rights in order to reward still more big campaign contributors.
Crossposted to save jobs and protect private property rights
*Disclosure: I hold provisional patents, although not in the electronic payment processing industry. I have been active in the payment processing industry, processing payments for more than 10,000 merchants for over 15 years. I believe strongly in the value of intellectual property and the property rights of inventors, artists and creators to enjoy the fruits of their creations.