Dr. Gary Michelson, renown for his innovations in spine implants, surgical tools and techniques, recently sent a letter to members of Congress in support of current patent reform legislation, S. 515, the Patent Reform Act of 2010.
Michelson became a billionaire as a result of a 2005 settlement of his infringement lawsuit against Medtronic. He holds hundreds of domestic and international patents. Needless to say, he has a lot of skin in the intellectual property game.
So when he decided to enter the patent reform fray in support of the legislation, we took keen interest.
In this special installment of Five Questions With …, we break from our usual format to offer this extended Q and A:
ID: What prompted you to write the letter in support of the current patent reform bill?
GM: I have been involved with the patent office for a very long time. Every year you hear rumblings about patent reform and it never seems to materialize. But I think there are new forces at work. The large pharmaceutical companies and Silicon Valley tech companies have competing interests. There is a lot lobbying going on. The fact they have the attention of the people who can cause that change, there really is a possibility of getting that change made.
I talk to examiners all the time. The office isn’t optimized, to be kind. It could be run better. How are we going to get there? How is that going to happen?
There’s a social contract that’s provided by patents. I feel a real debt to those rules of fair play. If I can give back for those who come after me, I feel obligated to do that.
ID: You referenced fee diversion in your letter to Congress. Could you amplify on your thoughts about diverting patent fees to the general treasury?
GM: This is interesting, there are things that are user fees government, and there are things that are taxes. If the patent office, which takes no money from the taxpayer, is designed to operate on user fees and then the government comes in and extracts money out of there, then that’s no longer a user fee. That really is a hidden tax.
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ID: Share your thoughts on those claiming to be defenders of independent inventors. It seem you have a not-so-veiled critique of them in your letter.
GM: Let’s put it this way. I was in a litigation. The other side put a doctor on the stand, and introduced himself by saying he was the world’s leading spine surgeon. I about fell out of my seat. I’m a spine surgeon. I don’t remember having an election. I didn’t vote for him. So how does he get to be the world’s leading spine surgeon?
How does someone get to be the singular voice of independent inventors? I can only speak for myself and people who feel the same way I do. I don’t claim to speak for every single independent inventor. But there are people who go to Congress claiming to speak for independent inventors.
ID: In the hierarchy of national priorities, where does innovation stand?
GM: I honestly believe, and I’m not an economist, it seems to me what happened during the Clinton years was that computers started turning up in doorknobs, paper towel dispensers, toilets and just about every other thing you could think of.
I give the example in the letter that one person with word processor replaces 20 people with typewriters. That’s just a fact. I remember the days when we’d do some sort of business deal, and every lawyer had to have a typed original. People would be typing the same letter over and over again. And if there were one change, you had to throw away the letter and start over.
With a word processor the change is instantaneous, nothing’s lost and you can print out 20 originals. So that increase in productivity allows the employer to make more money. And with more money, he can employ more people.
There’s a story when they were digging the canals in the 19th century, and they brought in a steam shovel. A man who represented the workers said, “You can’t use that. It will replace 100 men with shovels.” The answer is, yeah, you’re right. Or 1,000 people with spoons.
The point is when someone’s productivity goes up, it may displace other people. But when they acquire new skill sets, they become just as valuable. Most economists agree that what increases the standard of living is productivity.
ID: Similarly, in the hierarchy of national priorities, where does patent reform stand?
GM: I truly believe this issue is very very important for the well being of our country. I sincerely believe we’re generating deficits that are unsustainable. I understand the rationale, but they’re absolutely unsustainable.
There is no money left for discretionary spending. Zero. There is no money left. We don’t have a single penny for discretionary spending. It’s all deficit spending. How can that be sustainable? You can’t tax your way out of that.
So what’s the answer? You’ve probably seen those Austin Powers movies. There’s a scene and Dr. Evil is out of the 1960s and he’s in the present and he demands $1 million or he’ll destroy the world. They’re all, all right, we’ll write you a check. And then Dr. Evil’s back in the 1960s and he’s telling the world he wants a trillion dollars to not destroy it. And their reaction is there isn’t a trillion dollars in the universe.
You have to grow the economy sufficiently so that you have job creation to where the total gross domestic product goes up. That’s the only answer. It’s the only answer that’s ever worked in the history of the United States. And reforming the patent system is part of increasing productivity through innovation.
ID: What are you doing these days?
GM: What I’m involved in right now is this idea – and this is very disturbing to me – you have kids all over this country that are in community colleges. Many of them are struggling to make tuition. And yet the textbooks for community college students can easily exceed 60 percent of tuition. They can get financial aid for the tuition, but not for the textbooks. And it’s an outrage. Spanish and any number to textbooks don’t change year to year. The sales of textbooks is in excess of $20 billion a year.
I’m going to work to get at least the community college textbooks, high quality textbooks, online that are downloadable for free.
ID: The textbook industry is a racket. What else are you working on?
GM: Have you heard about the Michelson Prize? We’re offering $25 million for anyone who can deliver a single dose sterilizer for use in cats and dogs to stop them from reproducing. We put up another $15 million to do the research. We’re offering a prize on one hand. And we’ll actually give you money to do the research to win the prize.
I think it’s a big social issue. Every year in this country we’re killing five million cats and dogs. The only answer is to not have that many coming into the system. The other side of that answer is to stop getting people to buy the animals from breeders and puppy mills and to go shelters and get themselves a wonderful animal.
I’m putting my money where my mouth is. I now have four dogs from a rescue shelter.
ID: So, you’re kind of a do-gooder, aren’t you?
GM: Yeah, well, you know I have some money. What’s good the money if you can’t do something good with it.
Ask me what I drive.
ID: OK. What do you drive?
GM: I drive a 2000 PT Cruiser. That’s how important I think having an expensive car is. Money is only good for doing something good with it.
ID: Back to the patent office. What are your thoughts on how patents are examined now?
GM: I believe that a patent applicant is entitled to purchase from the patent office just as much or as little legal service as he wants. I think the patent office is entitled to charge for work done. Then commensurately, you must reward the examiner proportional to the service.
You need a credit system that matches the bill from the patent office to the applicant for the work actually done, which is not what we have now.
ID: Could that be bad for independent inventors filing without an attorney, or pro se? Examiners typically don’t like dealing with pro se filers because of the extra hand-holding.
GM: Here’s what I think. You have your large entities and you have your small entities. And then there should be this classification for individuals who are unrepresented or have less than 10 patent applications.
I do not believe the examiners are being treated fairly. They’re being overly burdened. One of the ways they’re being overly burdened is, if you have an independent claim that’s allowed, all the dependent claims that follow are necessarily narrower than the allowed general claims.
Is there support in this specification for this narrow claim? The attorney preparing the patent application should have to in parenthesis next to each one of these dependent claims cite the page and line number where the figure and number … for that dependent claim. Why should an examiner have to dig through your application to find what you claim exists. Tell them where it is.
I’ve been a heavy user of patent offices around the whole world. I’ve also been through the federal courts. It gives you an interesting perspective. (Legendary patent litigator) Don Dunner has this great quote: “It’s a sad state of affairs that we’ve now come to a point where it takes the federal courts to decide the validity of patents.
The point is, we need to fix that. We shouldn’t be in federal courts. Image the enormous costs to the parties involved and to the public to have the federal courts tied up in this ever-increasing area of litigation.
ID: Have any other related thoughts on this subject?
GM: I love this country. I love what the patent system has done for me. I owe a debt to do everything I can to help those as much as I can. When I get on an airplane and fly across the country for a one-hour meeting with someone at the patent office, it isn’t that I don’t have something better to do with my time. It’s a debt I feel I owe.
This (patent reform) is real important stuff. If we don’t get this situation fixed, the world is going to race by us.
Editor’s note: This article appears in the June 2010 print edition.
“We shouldn’t be in federal courts.”
How doe he propose to otherwise handle patent disputes considering everyone is by law entitled to trial by a jury of their peers? Does he want the PTO to mediate/arbitrate with the consent of both parties? Don’t forget this is the same PTO that proposed rule changes that would have killed inventors.
Please Dr.Michelson make a list of elements you believe independent inventors should have (whether or not its in the present bill). Another separate list of those elements which will drive up costs, and increase the power of well funded entities to harass and steal the inventions we independents produce, in the present proposed bill.
I understand that you have “hundreds” of patents according to this article. how is it that you wish to limit the number of patents or patent applications that an independent inventor can have to still qualify for whatever special treatment is eventually allocated to such a category?
Inventors frequently open completely new doors with basic technology that can have tens of associated inventions (as determined and forced by the USPTO) why should such creative acts be penalized? Surely we should want to help the next disruptive big thing.
Indeed disruptive inventions can take more then a decade to get any revenue or traction in what may be a missionary marketplace. These inventors should receive special treatment and at the 20th year should be reviewed to see if their invention(s) meet the criteria for extension by another decade because of their major contribution to society.
I also agree that number of patents is a poor way to set fees. Rather it should be based on entity size. That General Motors pays only twice as much as an independent inventor makes no sense, especially when it is the large firms who flood the PTO with applications and cause the backlog and whereas small entities are far more likely to produce dramatic discoveries.
“They can get financial aid for the tuition, but not for the textbooks. And it’s an outrage.”
This statement by Dr. Michelson is not accurate. Community college students and other college students can and do receive financial aid for textbooks. Books and supplies are a covered in the cost of attendence formula for federal financial aid. Community college students receive more aid for their books then other institutions because their tuition and fees are lower thus more aid is available for remaining expenses like books. Textbooks are also allowable expenses under the higher education tax credit, which even goes to students who have no tax liabilitity.