By Jon Kinzenbaw
Editors Note: Kinze Manufacturing CEO Jon Kinzenbaw writes opinion piece for Des Moines Register.
As a boy I could fix almost anything — and even make things better than new. In 1965 I put this skill to work when I opened a small welding shop in Ladora, where I began repairing tools and equipment.
Today that shop has become one of the largest agricultural equipment companies in America, employing nearly 1,000 people. This success happened by inventing and delivering better equipment to America’s farmers. Our innovations are protected with patents, and our employees, our dealers and our customers benefit from this protection.
In agriculture, innovation fuels efficiency and creates opportunity. Patents promote and protect innovation, and the U.S. Patent Office and the courts work together to make sure patents are only given to true innovations.
In those early years, I saw the patent system work well. Patents covered equipment, and patent examiners and judges could easily decide if a product was innovative and deserved a patent. More recently, I have seen our patent system struggle to deal with new types of inventions, like software programs. As a result, thousands of patents have been awarded based on reviews that even the Patent Office has expressed doubts about.
I have also seen a new type of patent business, one that succeeds by taking money from innovative manufacturers. Some call these companies “patent assertion entities,” and others call them “patent trolls.” These companies do not make products or offer services. They make money by using questionable patents to threaten and sue operating companies like Kinze.
Trolls force businesses to make a difficult decision: righteously fight back but pay lawyers millions of dollars over several years, or pay hundreds of thousands of dollars as a “license” to make the troll go away. Kinze faced this situation in 2012 when we were sued by a company that owned patents titled “Electronic Proposal Preparation System” and “Electronic Proposal Preparation System for Selling Computer Equipment and Copying Systems.” We managed to reach a solution that kept legal bills low while not giving in to demands.
Many companies are not as fortunate. There are thousands of patents for “processing data” or “distributing data.” One patent owner has sued dozens of restaurant and hotel chains for infringing its patent on distributing menu data over a network. Another has sued restaurant chains for displaying nutrition information on digital signs and websites.
For our innovative company that believes in and relies on patents, the most troubling aspect of our lawsuit is the story these patents tell: that there may be separate “electronic proposal preparation system” patents related to buying land, buildings, lawn equipment, office supplies, shipping, data processing and document storage — virtually any product or service one can imagine. And these patents that should never have been issued are weapons when they are owned by patent trolls.
Fortunately, Congress is considering legislation that could reduce abusive lawsuits and help eliminate low-quality patents. Sen. Chuck Grassley is a senior member of the committee that will develop these reforms, so we hope he is paying close attention to both the broken parts of the system which must be fixed, and the good parts of the system that should be left alone.
As one who owns and believes in patents (and has sued infringers), but has also experienced the system’s failures, I am confident that Congress can strike the right balance. Legislation should:
• Require patent owners to spell out specific infringing activity in demand letters and lawsuit complaints;
• Reduce lawsuit costs by placing reasonable limits on how much information must be exchanged by the parties;
• Require companies that abuse our court system to fix the damage they cause by paying the defendant’s legal fees;
• Expand Patent Office authority to review previously issued patents.
Senator Grassley and Congress have an opportunity to right our previously great patent system by cleaning out poor patents and making it harder for patent trolls to abuse America’s real innovators. Hopefully, when Congress is done, our patent system will once again by the great validator of inventions and the promoter of America’s ingenuity.
Jon Kinzenbaw is president and CEO of Kinze Manufacturing in Williamsburg, Iowa. Contact: SGreving@kinze.com.
Source: Des Moines Register