CT member Peter Carnes (CEO of Traffax, Inc.) testified before of the House Committee on Small Business today about “The Impact of Intellectual Property on Entrepreneurship and Job Creation”. Peter shared the stage with a really diverse group of IP owners – from ABRO, which has problems protecting its trademarks, to Rick Carnes, a songwriter who has written songs for Reba McEntire and Garth Brooks. The President of the Business Software Alliance and the CEO of t3 (they sell mainframe software) rounded out the mix.
The Committee has Peter’s oral testimony up on YouTube here, but for those of you who want to read the full version, here’s a link.
Overall, the witnesses really hammered on the message that IP was a key way for America to move forward, and that it wasn’t going to happen without some help from the government. Holleyman and Rick Carnes (Songwriter’s Guild) pointed out that the BRIC nations are really doing a number on US copyright holders – stealing software, music and movies as fast as we can make them. Peter talked about the need to get the USPTO fully funded, and to get the backlog of patents dealt with so that businesses that file for patents aren’t hanging out in the wind for nearly 2 years after their patent has been published.
Peter also pointed out that adding IP to international trade agreements had an impact not just on the macro level, but in day to day business as well. He noted that he had been dealing with China for years, and he has begun to notice that IP issues have now become “part of the narrative” of business negotiations, when before they weren’t even an afterthought.
On patents, Congressman Luetkemeyer referenced a constituent of his who said ‘filing a patent lets your competitors see what you are doing, and then they just tweak it to work around, so why bother?’ Peter noted that this is the heart of the patent system; it drives innovation forward because by teaching others how you do things, they come up with ways to jump ahead. In exchange for sharing the secret of how my invention works, I get a time restricted monopoly on my design. I share so that I can get (temporary) exclusivity. But this delicate balance is being thrown out of whack by a patent system that takes far too long between publishing and granting. During that nearly 2 year gap of time the patent filer can do next to nothing to protect his idea.
We agree with Peter that something needs to be done to get USPTO on the right track of eliminating the patent backlog; in support of this, ACT has asked Congress to give the USPTO access to all the money it collects for FY2010 during FY2010, rather than wait a whole year to spend the money we’ve given them. Here’s a copy of the letter we sent to the Senate Appropriations Committee.
Finally, Peter talked about the difficulty small tech companies have had when trying to get a loan through SBA. Banks have almost no ability, and no interest, in granting loans to companies that have few tangible assets. Innovation companies don’t buy buildings, they don’t buy furniture, they don’t buy trucks, they may not even buy computers. Instead they pay wages for engineers, they hire software developers, they build and destructively test prototypes – none of which is a tangible asset that a bank can attach if you fail. Peter asked Chairwoman Velazquez to work with SBA to improve how SBA deals with IP as an asset for the purposes of securing loans.
Overall, Peter was a rockstar today, and made all of us at ACT very proud to have him as a member.
