Complex Fight Over Patent Trolls Hits Washington TV Screens

Coons said it would be "tragic" for McConnell to change the rules. (Rob Kunzig/Morning Consult)

The battle between the tech community, academics, venture capitalists and scientists over reforming American patent laws is pitting groups with the similar mission of protecting U.S. invention against each other. They are fighting over two bills — the Innovation Act in the House and the PATENT Act in the Senate.

The dynamic is now getting airtime on the TV sets of Washington, D.C., residents as one side pushes back against legislation aimed at stopping “patent trolls” from extorting money from companies. They are taking the unusual step of putting a complex legislative issue into a campaign-style TV ad.

The Innovation Alliance, a group representing research and development-based tech companies, will spend $95,000 in April and $160,000 in May to push their “Save the Inventor” campaign on NBC’s Washington network, according to Federal Communications Commission filings. In May, the group will pay a total of $100,000 to air the commercials during blocks of “Meet the Press.”

The group is paying for a 30-second commercial that features a narrator talking about how a big corporation infringed on her patent, and as it profits, she could be forced out of business.

“Intellectual property theft hurts nearly half of all U.S. businesses,” the text of the ad says. “How many more will be victimized if Congress weakens patent laws?”

The ad then prompts the viewer to take action to “save the American inventor.”

“The idea behind the Save the Inventor campaign is that the small inventor community doesn’t have a voice in Washington.  We wanted to give them a way to speak out and be organized,” said Steve Posner, a spokesman for the Innovation Alliance.”

Both the Innovation Act and the PATENT Act are part of a large movement in Congress to clamp down on patent trolls, the name given to entities that own patents and use them to sue or intimidate companies into giving them money. Patent trolls generally don’t manufacture goods on their own but instead use patents to make money off those that do.

The campaign gives a voice to the small inventor community and projects its message to a very specific demographic — Washington policymakers. If you want a narrative to gain traction in the Washington, where better to put it than during “Meet the Press” commercial breaks?

The Innovation Alliance thinks the patent bills in Congress are too broad and could significantly weaken the ability of small businesses to defend their patents. For example, they are concerned that a provision to change pleading standards could make it tougher for “the little guy.”

They say big companies could go to court and wait until the small business simply goes out of business.

The ad campaign highlights how nuanced the debate surrounding patent legislation really is. Innovation Alliance says the bills weaken innovation. The bills’ proponents say they are trying to protect innovation as well.

The tech industry argues that by supporting those same bills, they are the ones trying to save American innovation. “We have the strongest message that there is on this. … That’s actual innovators, inventors, companies who create amazing things who are stifled by frivolous lawsuits,” said Michael Hayes, senior government affairs manager at the Consumer Technology Association, in an interview.

The CTA is lobbying hard for bills such as the Innovation Act and the PATENT Act to stop what they see as extortion. They argue that most of the companies that are hit with these lawsuits aren’t major corporations, but small businesses and inventors who don’t have the time or money to fight in court and choose to settle instead. (That’s a situation eerily similar to the one portrayed in the Innovation Alliance’s ad spot).

Tech is focused on ensuring that members of Congress hear from people most affected by patent trolls. “For us it’s making sure those small guys, those independent innovators can get their stories heard by Congress,” Hayes said. The proponents’ advertising campaign hinges on getting that message to policymakers.

Because a lot of the companies involved in the issue worry about future lawsuits, Hayes says it’s difficult to find people to go public with their problems. “There are many who care deeply and have been affected financially by the issue who can’t speak out or be public,” he said.

CTA brings entrepreneurs’ stories, and sometimes the inventors themselves, to Capitol Hill to chat with members and their staff every week according to Hayes. “I haven’t found any instance when a member of Congress is not receptive to that kind of personal story,” he said.

“What we’ve found is that when members of Congress hear from small businesses about what actually happens when you get hit by those frivolous lawsuits, the money on the line, the CEO time spent on something that they know is absolutely bogus, particularly when members hear from a small business in their district and how this impacted them, they realize the severe impact that it can have,” Hayes said.

In those cases, companies have their big chance stolen because of incessant lawsuits that soak up all their resources and energy.

By contrast, the Innovation Alliance focuses its energy on those who have their intellectual property stolen outright. They come at the issue from a different angle than the tech industry, representing researchers and engineers who may not manufacture their patents but license them out for tech companies to use.

The group has the likes of Qualcomm in its ranks, a company specializing in developing telecom products that it then licenses out for companies to manufacture. A company like Qualcomm is reliant on patent licensing for its income and needs strong laws to ensure they can’t be stolen. Universities share similar concerns because they license out technologies from their research labs and make huge amounts of money that they can later invest back in their facilities and projects.

Venture capitalists, medical device manufacturers and the pharmaceutical industry all share similar worries about a big revamp to patent laws. The Innovation Alliance wants to stop patent trolls like the tech community, but with a more tailored approach. The group supports the STRONG Patents Act from Delaware Sen. Chris Coons (D), for example.

The dueling arguments that share a similar goal are part of the reason patent reform has stalled. Everyone wants to ensure the legal landscape reflects a fair system allowing inventors to flourish, but everyone has different interests to protect.

Clarification: Qualcomm also dabbles in manufacturing, but most of its profit comes from patent licensing.

Morning Consult