Patent Reform Bill's Wall Street Bailout

Big Wall Street banks really hate Claudio Ballard. A small-time inventor and founder of DataTreasury, a digital imaging company, Ballard has cost big banks at least $400 million by filing legal claims asserting that the banks have stolen his intellectual property, infringed on his patents, and refused to pay him for his work. For years, the banks have been trying to wield their immense political power to shoo this fly. Now, it looks like they might succeed: a new, bipartisan patent-reform bill working its way through Congress contains language written specifically to put Ballard out of business.

For at least five years, big corporations have waged a well-funded and sustained lobbying effort to persuade Congress to overhaul the nation's patent system. They've pushed for measures that, among other things, would squash competition and make it harder for small inventors to fight back against the companies that steal their intellectual property. This week, the House is considering a parallel bill to one passed in the Senate in March that would radically change the 200-year-old process by which the government awards patents.

Historically, the US has granted patent rights to the "first inventor"—the person who could clearly prove that he or she originated an idea. The bill would revise that standard to grant the patent for a particular idea to the first person to file for it. It would also free the patent office from the congressional appropriations process and allow it to tap the millions in fees it generates to supplement its budget. Proponents say the legislation will speed approval times and help clear a backlog of more than 700,000 patent applications. The House Judiciary Committee approved the bill on Thursday; if it passes the full House, President Obama has promised to sign it.

But the bill contains an obscure provision inserted by Sen. Chuck Schumer (D-N.Y.) at the behest of big Wall Street banks. The language essentially immunizes big banks from patent infringement lawsuits filed by Ballard and DataTreasury. Ballard has long alleged that he patented a process for electronically processing checks in the mid-1990s. When most of the country's major banks started using a similar process years later, Ballard started suing. His litigation earned him a reputation as a "patent troll"—someone who makes his money by suing over patents rather than building a company out of them. (DataTreasury is essentially a holding company with only a couple of employees.)

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Source: Mother Jones