US Presidential Candidates Prioritise IP Issues But Diverge On Details

By Liza Porteus Viana for Intellectual Property Watch
The presidential election in the United States is getting down to the wire, with Republican John McCain and Democrat Barack Obama being officially chosen as their parties’ nominees.

The intellectual property community is taking particular note of what positions the candidates are taking on patent reform, copyright enforcement, internet neutrality, and a host of other issues. Both campaigns have a plethora of expertise in the form of law professors, patent lawyers, and others advising them, either informally or formally.

Both the Democrats’ and Republicans’ conventions in the past two weeks touched upon intellectual property, with advisers from both campaigns meeting with members of industry and other IP experts.

At the Democratic Convention in Denver, the University of Colorado law school hosted a debate between two Obama IP advisers and two McCain IP advisers, while the Business Software Alliance (BSA) met with Democratic Representative John Conyers, chairman of the House Judiciary Committee, about a list of principles signed onto by BSA member companies, the first of which is to “inspire creativity and innovation through strong, comprehensive, and enforceable intellectual property policies, including copyright, patent and trademark laws.”

At the Republican convention, an intellectual property panel was moderated by BSA, which Senator Arlen Specter, R-Pennsylvania, attended along with a host of technology companies. Jack Krumholtz, managing director for federal government affairs at Microsoft, was a participant, as was a representative of Hewlett Packard. The Consumer Electronics Association culminated its 28-state “America Wins with Trade” bus tour in Minneapolis this week for the convention. It held a pro-trade rally that included US Commerce Secretary Carlos M. Gutierrez, Republican Reps. Kevin Brady of Texas, Roy Blunt of Missouri, and David Dreier of California.

Katherine McGuire, vice president of public policy for BSA, a Washington, DC industry association, said: “We have met with the technology and the economic policy advisers of both campaigns. We have looked at the records and the technology policy platforms of both. I think our first cut here and our first reaction is: we’re very encouraged that both candidates are showing a real good understanding of the key issues.”

Here are some of those issues:

Patent Reform/USPTO

Reforming the nation’s patent laws is an issue of utmost importance to intellectual property owners. The US Congress has again failed to pass a substantive bill, and it’s unlikely to get much attention until after a new president and Congress take office, despite some emerging efforts.

“Patent law reform is an absolute priority because the system is broke, it’s badly broken,” said Harold Wegner, a patent lawyer with Foley & Lardner. “Patents are really the crucial area right now because of all the disorganisation.”

While saying protection intellectual property “creates the incentives for invention and investment,” McCain – who released his technology and IP stances just last month – thinks “too much protection can stifle the proliferation of important ideas and impair legitimate commerce in new products to the detriment of our entire economy.”

McCain, a Republican senator from Arizona who has presided over the Senate Commerce Committee, released his technology platform in August. Obama, a Democratic senator from Illinois, released his last November.

Intellectual Property Owners’ Association Executive Director Herb Wamsley said he hopes McCain will slightly revise his statement.

“We don’t think the stress the patent system is under currently is caused by too much protection,” he said. “Too much protection – that kind of thinking leads you down the road toward the idea that you can have lower prices and more manufacturers in the market if you reduce the patent enforcement and the strength in patent rights.”

Both McCain and Obama agree the patent system is too litigious, in need of reform, and they support more resources to hire and train quality patent examiners at the US Patent and Trademark Office (USPTO).

“We have this huge backlog of cases, we hire literally thousands of examiners – nearly 1,000 a year – and we have a turnover of nearly 1,000,” Wegner said.

Ray Gifford, an intellectual patent partner at Kamlet, Shepher & Reichert in Denver and former president of the Progress and Freedom Foundation, serves as an informal adviser to McCain. He said there has been a “worthwhile and spirited discussion” in the McCain camp on alternative dispute resolution, particularly fee shifting.

“I think the question is, how do you reform IP while still maintaining a strong role for IP rights,” Gifford said.

In his platform, released last fall, Obama proposes opening up the patent process to citizen review to decrease “wasteful litigation,” uncertainty and unpredictability. McCain supports a similar peer system.

Obama also proposes a “gold plated” patent less vulnerable to court challenge. While few details are offered, this patent could be obtained by applicants “who know they have significant inventions” who choose the option of “a rigorous and public peer review.” “Dubious” patents would go through a cheaper, less time-consuming review.

Some experts are supportive of the idea, while others aren’t sure that system is workable, and have questioned whether inventors should have to pay more for a first-class patent.

“We have been stressing really for quite some time the importance of patent quality and having adequate examinations,” said Jesse Feder, director of international trade and intellectual property at BSA. But “really, all patents should be gold plated.” Plus, he said, who is to decide whether a patent is “dubious” or for a “significant invention?”

“I have not met many patent applicants who didn’t think they had ‘significant’ inventions,” Wamsley said. “A better job can be done on every application … we’d like improvements in the system that would really make all patents gold plated but would cost less than the cost of gold.”

But Obama advisers have clarified that the proposal is not related to fees paid by applicants, according to a source close to the campaign. At the Democratic convention at the end of August, Obama advisers said such an idea is not based on applicants’ fees, but on how rigorous the patent examination process an applicant wants to go through.

Net Neutrality

Internet neutrality – or “Net neutrality” – refers to a principle that is applied to high-speed networks free of restrictions, such as what content those networks carry and what devices are used (e.g., game controllers or wireless routers).

McCain, who is taking a beating from critics on this issue, does not believe in “prescriptive regulation like ‘net-neutrality,’ but rather thinks “an open marketplace with a variety of consumer choices is the best deterrent against unfair practices.”

But policies should focus on giving consumers access to content they want, he says, and the ability to use the applications and services they choose, however they attach them, “if they do not harm the network,” and they are “free to choose among broadband service providers.”

Obama “strongly supports the principle of network neutrality to preserve the benefits of open competition on the internet,” according to his campaign. He argues that users’ right to receive honest information from providers about their services is not a sufficient guarantee to prevent discrimination.

“Network providers should not be allowed to charge fees to privilege the content or applications of some websites and internet applications over others,” his policy says.

Many Net neutrality advocates say letting the market handle it will not work because there often is not enough provider choice.

“Obama has talked about the need to keep the Net open and free and McCain has talked about some sort of evil regulation … the problem is, there’s not an open market to work,” said Art Brodsky, spokesman for Public Knowledge. “The idea of non-discrimination is not some radical regulatory concept. It’s something well-embedded in communications law.”

Stanford Law School professor and techie Lawrence Lessig recently said Net Neutrality “is not rightly described [by McCain] as prescriptive legislation. Net neutrality is the heart of how the internet was described.”

Gifford said, however, that McCain likely would be “very comfortable” with some form of regulation if “market abuse is shown.” He added, “I think he’s very wary of the unintended consequences of prescriptive regulation and would look very welcomingly on efforts at self-regulation” by industry.

Doug Fish, a patent attorney formally advising McCain, has said his candidate is not simply suggesting market forces and current antitrust law is all that is needed, but prefers a “light regulatory environment. “Of course you need real enforcement of anti-competitive regulations,” he said.

Copyrights/Counterfeiting/Piracy

Copyright enforcement is one area not defined by partisan lines. Both sides generally agree there is a need to prevent American intellectual property from being illegally copied, either at home or abroad.

Acknowledging the importance of the US entertainment industry as it is among the largest US exporters, McCain says that along with providing great opportunity for creators of copyrighted works for distribution, the internet also has contributed to a “global epidemic of piracy.” He “supports efforts to crack down on piracy, both on the internet and off.”

Obama will work to ensure intellectual property is protected in foreign markets, and will “promote greater cooperation on international standards that allow our technologies to compete everywhere.” He cites China as a particularly strong offender when it comes to selling illegal works.

Obama also supports updating and reforming current US copyright and patent laws and systems.

“We need to continue to make sure the current agreements – TRIPS and other agreements – are being followed and supported but we also have immense support and commitment to move forward on ACTA [Anti-Counterfeiting Trade Agreement] and other agreements, as well as legislative initiatives,” said Michelle King, manager of external relations at International Trademark Association, which is working with both campaigns on trademark issues. TRIPS is the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights.

Internet Access

Both candidates support broadband, or high-speed internet, access for all Americans – wherever they live, whatever their income.

Obama wants full broadband penetration through better use of spectrum, promotion of next-generation facilities, new tax and loan incentives, and by changing the Universal Service Fund program to better support affordable broadband, specifically in underserved communities. He will also raise the bar for what broadband speeds should be to qualify as “high-speed.” In addition, Obama will encourage federal support of public/private partnerships to roll out broadband services.

McCain will provide incentives to encourage private investment to build broadband infrastructure. Where industry fails, local governments should build them out themselves. Inefficiently-used spectrum should be used to provide high-speed internet to rural areas, and he vows to establish a “People Connect Program” that rewards companies that offer broadband services to low income customers.

WTO/Abroad

McCain is a free-trade proponent, particularly when it comes to making sure America’s high-tech workers can compete in the global marketplace. Earlier in the campaign, he promised to take China to the WTO to stop violating IP rights, but acknowledges that China has made progress in this area. The Bush administration has already brought two cases against China at the WTO related to IP rights.

Obama supports a trade policy that favours markets in countries that are on par with US labour and environmental standards. He blasts the Bush administration for bringing only 16 cases before the World Trade Organization, and for not holding China accountable for its failure to enforce US copyrights and trademarks.

Since 2003, BSA notes, however, China’s piracy rate has fallen by 10 points, in part, because of industry and government efforts, whether they be through the WTO or elsewhere – much of which often requires careful diplomacy from people close to the president.

“We expect either President McCain or President Obama to continue these efforts and continue the efforts on China,” McGuire said.

Liza Porteus Viana may be reached at info@ip-watch.ch.