Privacy, Business and Law

The ability of the United States to preserve and expand its economic advantages is under attack through many proposed changes in the way we protect and make public our technological creations and advantages.

A major beneficiary of these changes will be Japan. In the past, Japan has taken our technology for the transistor radio, TV, steel, VCR, automobiles and many other products and has eliminated or severely damaged these industries in the U.S. Inattention and inaction on the part of the U.S. government and U.S. corporations allowed this to happen.

If the proposed changes in our patent system have the expected effects, they could result in the following.

• Fewer startups resulting in fewer jobs and higher unemployment.
• Loss of new businesses to the Japanese.
• Reduced export competitiveness damaging our already bad balance of trade.
• A resulting increase in the national debt.
• Loss of leadership and power in Asia and the rest of the world.

Why is Japan supporting these changes?

Japan is having major problems. Their banking, political, and social systems are showing signs of serious trouble. Also, they are finding it difficult to keep up technologically in several key fields such as software and computers. Because of this, their continued success in the future depends on their ability to obtain early access to new technology.

It is highly probable that Japan’s support of the changes in the U.S. patent system are aimed at quickly screening new technology from the U.S. in order to prevent our inventive superiority from allowing us to maintain economic and technical leadership.

In the past, Japan has always obtained new and important technology from other countries. This is because they are innovative rather than inventive. It is amazing that with all of their “technical expertise”, they have earned only a handful of Nobel Prizes in science. When Emperor Meiji took over in the late 1800′s, he sent study teams throughout the world, and Japan adopted the British navy system, the German medical system, the American Patent system and other “best technologies”. In the 1950′s they obtained technology licenses from the U.S. and Europe. This route is now closed since companies outside Japan are tired of seeing their licensees become competitors and drive them out of business. This has happened to the radio and TV industry, and almost happened to the automotive industry.

Japanese companies have also tried to steal technology. Several years ago, Japanese executives from Hitachi in California were convicted on industrial espionage charges. Now, the Japanese are trying to use international organizations and predatory rules to obtain new technology quickly, and safely. And recently, they proposed changes in international Intellectual Property Laws which would allow them to identify the key elements in new software and to copy the software with impunity.

The U.S. patent system was put in place 205 years ago by our founding fathers. It suits a nation that relies on invention and change for growth. Early on, individual inventors, such as McCormick and his reaper, the Wright brothers and their airplane, Edison and his light bulb, phonograph, motion picture camera and more, created small startup companies which became some of our greatest American industries. In more recent years, we have had Land and his Polaroid company, Eastman and his Kodak company become household names and successful companies. And in the past few years, while large companies were trimming Millions of jobs, small start-ups like Intel and Microsoft, grew to be leaders in their industries and now provide employment to hundreds of thousands — millions when all the companies using their products are counted. Virtually all of the early and recent start-ups, which became huge companies relied on the American patent system for the protection of their intellectual property. This kind of protection permitted them to obtain the capital they required to begin, grow and prosper.

The present American Patent System was the key to such growth!

All but one of the patent changes being pushed through Congress now, would have the negative effects on the U.S outlined below. In reviewing these effects, it is necessary to recognize that many U.S. patents are seminal; they are broad reaching and of fundamental importance, such as the transistor patents and laser patents. In contrast, the Japanese patents tend to be minor improvement or modification patents. This is natural since the Japanese have relied on licensing outside sources for fundamental patents. In fact, the Japanese patent system is set up to disseminate information to the largest corporations rather than guard an inventor’s rights.

Publish Application in 18 Months.

Allows the Japanese to view technology long before the patent issues. This permits them to quickly surround a new technology patent with trivial but bothersome patents. By so doing, large Japanese companies can often force royalty-free licenses from the companies filing the original and important patents. So important is this “feed stock” of new American technology for Japanese industry, that the Japanese have already staffed up for this very purpose, anticipating a fresh supply of American patent applications exposed at the unprotected pre-patent stage.

Patent Term of 20 Years From Filing.

The pre-GATT American Patent System provided protection to the actual inventor for 17 years from granting of the patent. It thus protected America’s seminal patents, which often took many, many years to issue. “Submarine” patents, where the issuance of a patent is supposed to be intentionally prolonged by the inventor, may not even exist, but the term has been used to mean patents that have taken more than 20 years to issue. Careful evaluation shows that in the majority of such late issuance cases — delays were actually caused by government rulings regarding secrecy for national interest or procedural errors by the government.

Why has the U.S. government agreed to such a bad deal for the U.S.?

It appears that someone in the government thought it was merely a trade-off, with the U.S. trading away most of our patent advantages for concessions by other countries in the area of copyrights. Most would consider this decision to be short-sighted and disastrous long term. Even the short-term, benefits cited by proponents of the change are of doubtful value when examined closely.

The fundamental idea that the U.S. should “unify” its patent system with that of other countries is fallacious. Our country has risen to the top of the technological world, in great part because of our well-crafted patent system. By making us the “same as others,” we are reduced to their level and lose our advantage.

Are the Japanese At Fault for Working to Destroy the U.S. Patent System?

The Japanese government acts on behalf of Japanese companies and fights to obtain advantage for Japan’s economic system. This is one of the main purposes of the Japanese government. They are doing what they should do.The U.S. government should do the same, but does not.

So the fault lies not with the Japanese government, but rather with the current American administration. This is and should not be a matter of conflict because of personalities or politics. The technological advantage of the U.S. is being jeopardized, and the results could have stultifying negative effects on our economy and way of life. Many will be far reaching effects which we might never be able to overcome.

By Ben Franklin and George Margolin