Today is Election Day – Please Vote!

“A man without a vote is a man without protection.” — Lyndon B. Johnson.

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There are a ton of interesting and important races on the ballot this election cycle. We have one of two U.S. Senate seats up for grabs today, and the winner will head to the U.S. Capitol (pictured above).

Meanwhile, in Arkansas, the constitutional offices are closely contested. Governor, Lt. Governor, Attorney General, Secretary of State, and many others have seen tight polling over the last few weeks. Quite a few House seats are close, including one sought by a long-time friend, Jeremy Ross.

Many state races, including our local house race between incumbent Richard Womack and challenger Damon Daniels, have turned into a de facto referendum on President Obama's policies — particularly the Affordable Care Act. It will be interesting to see how Arkansas handles Medicaid expansion, since Arkansas is one of few southern states to see a substantial drop in the percentage of uninsured. Here in Clark County, we went from 25% uninsured to 13% uninsured — a 12% drop. That's phenomenal. 

There are 5 issues on the statewide ballot, and you can see my thoughts on those elections here. Two counties are holding local option elections (links to results for Columbia and Saline Counties) in an attempt to change from dry to wet. If Issue 4 on the statewide ballot passes, the whole state will go wet. That would certainly be in line with what's happened in Arkansas over the past 6 years on a county-by-county basis; however, it would make Arkansas somewhat of an outlier in the South, since most other Southern states have similar wet/dry laws. I wonder if, as it did in 2010, if today's wet weather foreshadows the results of these wet/dry elections?

Out in Virginia, Hilary's brother, Brad Martin, is running for a seat on the Virginia Beach City Council.

I'll be watching closely as the evening progresses. Here's the link to the Arkansas Secretary of State's website, where voting will be reported once the polls close. Good luck to all the candidates out there.

What races have you most interested in this election?

The importance of the civil justice system

In a recent episode, CNN's Michael Smerconish discusses the importance of the civil justice system. He observes that sometimes government oversight doesn't work correctly, or even at all. In those situations, our civil justice system is what keeps our communities safe. That is, civil lawyers identify problems with products, then file lawsuits bringing those problems to light and forcing companies to correct them.

See for yourself — watch Smerconish talk about the GM ignition switch scandal below:

High-tech patent cold war — Let the arms race begin

Google recently lost a bid to buy Nortel’s patent portfolio in bankruptcy, and it is disappointed with the results. Google blames the patent system for increasing costs of its Android platform and generally stifling innovation.

Google’s complaints are especially interesting considering President Obama’s recent speeches on how America’s government needs to promote innovation to compete with the rest of the world (and he’s right — the Constitution tells us that patents are supposed to “promote progress of science and the useful arts”). These speeches implied that individual inventors and startup companies can help bring us out of our current economic woes by creating jobs at new (and mainly small) businesses.

From a historical perspective, Google is still a startup company; it was formally incorporated in 1998. Assume that Google began applying for patents when its founders created their first search engine in 1996 — those patents would not have expired yet, since patents last 20 years after the date of filing. This means that Google is a relative newcomer to the patent game, but has 15 years’ experience as a startup company for whom the patent system is supposed to promote innovation.

And what is Google telling us from its position of experience? That the patent system is not geared towards promoting innovation by startup companies. What’s to blame, according to Google? First, the patent system itself, since it is geared towards large corporations who can afford to invest millions of dollars and years of time toward procuring and enforcing patents. A patent, at its very core, is merely the right to exclude someone else from practicing a patented invention — and the only way to exclude someone from doing what they’re doing is to sue them. The average utility patent costs somewhere in the five-figure range and takes 3–4 years to obtain, and the average patent infringement lawsuit costs at least a million dollars. What startup company or small business do you know of that can pay a million dollars for a patent infringement lawsuit?

Second, Google complains the patent system is open to exploitation by non-practicing entities (known as “NPEs”, or the less-politically-correct “patent trolls”), who do not actually make and sell innovative products, but instead buy and enforce patents against those who do. Just because a startup or small business has a patent doesn’t mean that it can’t be sued for patent infringement by someone else — products can be, and often are, covered by more than one patent.

What do the pitfalls of the patent system mean for real businesses? Well, there are two general approaches a business can choose to take. First, an industry can elect not to pursue patent protection and compete on the merits of their products. This approach is rare these days, as it is hard for small businesses and startups to attract investment capital without a protectable core product. Second, everyone in the industry can elect to pursue a patent enforcement model. This is the Cold War, mutually-assured destruction model. Since most products in the rapidly evolving high-tech industry are covered by some type of patent, the industry players can extract licensing fees from their competitors, and can resolve patent disputes through some mixture of cross-licensing arrangements, cash payments, and injunctions against future competition. Google’s recent press releases make abundantly clear that while it is playing the patent game, it doesn’t want to be.

Any industry in which one player shifts from the first two the second model will ultimately force all other players in the industry into the second model. Google is a prime example of this. Its press releases following the Nortel patent sale plainly indicate that Google would prefer to compete on the merits of its products, rather than the size of its patent portfolio. That is, Google would rather spent tens of millions per year on research and development of new technology, rather than litigating over old technology. While some portray this as sour grapes, Google is the current poster child for startup companies, so perhaps the architects of our patent system should listen to what it is saying if they truly want to encourage innovation by startups and small businesses.

Update on America Invents Act of 2011

In a rare showing of bipartisanship, the Senate passed the America Invents Act last week. Since I last reported on the Act (when it had a different name), I sent a letter to my congressional team containing the analysis I shared here several weeks ago. Before the Senate’s vote last week, I was honored to receive a call from Senator Boozeman’s office requesting my input on several provisions in the Act. His office told me only two patent attorneys in the state wrote to the Senator to comment on the Act, and his staff appreciated the help in understanding the sometimes-esoteric patent laws.

How the patent system could better solve our government's problems

Many citizens view the patent system as a way to protect ideas. This is true in a broad sense, so long as an inventor reduces her ideas to an actual product or process. What many people don’t know is that our patent system in America is designed to discourage inventors from sitting on their patents rather than using them.

This is particularly relevant to today’s public discussions on energy policy. As a country, we’re facing a crisis in the Gulf of Mexico due to BP’s oil spill, our dependence on foreign oil, and our general lack of viable energy alternatives for creating a substantial portion of our energy needs from renewable or carbon-neutral sources.

The Bayh-Dole Act of 1980 gives the government certain rights to patented technology maturing out of federally-funded research.  I mentioned this act in the context of a law review article published in 2008 on the viability of Americans growing their own ethanol-based fuel. Two rights reserved to the government are key:  first, if the government funds research at an institution, the government need not pay to use the intellectual property arising from such research. That is, the Bayh-Dole Act allows the government to sidestep the artificial markup for patented products that end consumers have to pay. Second, if the owner of the patented technology is not fully exploiting the technology to the benefit of society, the government may license the technology out to firms who will.

Over 7.5 million patents have been granted by our federal government. To point out a few examples, over 15,000 of these patents deal with transmission of electricity. Over 26,000 relate to wells and drilling for oil. 33,000 represent technological advancement in power plants. Nearly 64,000 address radiant (solar) energy.

The 7.5 million patents represent the collective knowledge of the best and brightest from around the world, and many of those patents were the product of federally-funded research. It seems to me that the federal government could mine some of the technology it has already paid for as a start towards creating new energy policies for our future.