The Story Of Patent Reform: How Lobbyists & Congress Works... And How The Public & Innovation Get Screwed

from the sad dept

We've noted how there's suddenly been a lot of mainstream interest in the massive problems of the patent system, thanks in part to mainstream media operations like This American Life doing stories that expose just how damaging the patent system is today. And yet, despite all of this, we've been pointing out for a while that the patent reform bill making its way through Congress is useless. It does nothing to address the problems of the system and has a few things that will make matters worse. And it bizarrely includes clear favors to Wall St., protecting them from a few bad patents, while leaving everyone else -- including Silicon Valley -- to fend for themselves.

So why isn't Congress actually fixing the patent system?

Zach Carter over at the Huffington Post has an absolutely fantastic detailed look at the politics and corruption behind the patent reform bill. It's long, but worth reading. However, the tl;dr version is: patent reform is entirely about lobbyists and special interests. No one -- and I do mean no one -- appears to have any concern whatsoever for the actual impact of the patent system or patent reform on actual innovation. The story is about as depressing as you would imagine, but is a great primer on the nature of regulatory capture and how certain industries influence regulations, while the actual public and the people most impacted by the legislation is left out. Here's just a snippet:
DataTreasury's lawsuits are handled by Texas trial-law kingpins Nix, Patterson & Roach. In the 2010 elections, the firm was the third-largest contributor to the Democratic National Committee, pouring in $179,000, behind only Google and the Law Offices of Peter G. Angelos, according to the Center for Responsive Politics. When Republican lawmakers bemoan "Democrats and trial lawyers," they're talking about Nix Patterson and a handful of other big law firms.

Nix Patterson brought in an even bigger fundraising champion to lobby Democrats for DataTreasury: Ben Barnes. He and his wife Melanie have dumped $379,000 of their own money into politics over the years, according to Center for Responsive Politics data, with every penny going to Democrats. Barnes is also one of the most influential fundraising bundlers in politics. In the first half of 2009 alone, he pulled together $630,450 for the Democratic Congressional Campaign Committee -- more than anyone else, according to the Sunlight Foundation.

Barnes is not a man congressional Democrats keep waiting. And he's previously worked directly with Pelosi, who attended a fundraiser at Barnes' Austin home in 2009. Pelosi's office did not respond to inquiries on her meetings with the fundraising giant, but when asked by HuffPost whether he had won over Pelosi on Section 18, Barnes said that he had.

"Oh, yeah," Barnes told HuffPost. "For some time I've worked with DataTreasury that has the patent all the banks are worked up about."

By revolting on the patent bill, Pelosi was throwing in her lot with Reps. Maxine Waters (D-Calif.), Dan Boren (D-Okla.), Aaron Schock (R-Ill.) and Jim Sensenbrenner (R-Wis.), who circulated a letter on June 15 urging their colleagues to oppose Section 18, saying the language "carves out a special niche" for Wall Street that would "stifle innovation."

This odd bipartisan coalition was going up against the entire New York delegation, led by Rep. Joseph Crowley (D-N.Y.), chairman of the corporate-friendly New Democrat caucus, who declined to comment for this story. As the behind-the-scenes struggle intensified, DataTreasury promoted the idea that Section 18 was a covert bailout for the banks. If courts ruled that the new law amounted to an unconstitutional taking of property -- a very big 'if' -- then taxpayers would ultimately have to pay back the bank winnings resulting from the bill.
Nobody comes out of this story looking good. Everyone comes out of it looking corrupt. And all of us suffer. Though a few lawyers are making out like bandits.

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  1. identicon
    Ron Robinson, 28 Aug 2011 @ 4:26pm

    Current Patent Reform will really kill many jobs

    I've been astonished at how the 'patent reform' legislation will kill jobs, and it's a 'two-fer' for being unconstitutional. See: http://www.redstate.com/elronaldo/2011/08/25/obamareid-plan-more-mischief-when-senate-reconvenes/ It's a huge payoff for the Big Banks and Wall Street, so Obama and Harry Reid want to bring this quietly to the floor of the Senate in non-amendable fashion on the very first day back from recess. I hope we can stop them and activists who want to help stop it can go here - see http://jobsNOTbanks.com

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