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Summary:

John McCain and Ron Wyden are among the dozens of congresspeople people from Oregon, Arizona and New Mexico lobbying the ITC against harming the economy by banning the import of computers containing some of Intel’s most-popular processors. But saving the IT economy goes beyond patents.

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What’s true for presidential campaigns is also true for patent lawsuits, it appears. To steal a phrase from political strategist James Carville, “It’s the economy, stupid.”

A handful of influential U.S. senators and representatives are backing Intel, HP and Apple in their patent battle against intellectual property firm X2Y Attenuators, which is asking the U.S. International Trade Commission to ban imports of certain Intel-powered computers. According to an article by Jenna Greene in the National Law Journal, the agency’s decision might be shaped by pressure from those congresspeople, who are worried that an import ban could negatively affect the U.S. economy.

In terms of trying to build a strong economy for the future, this is a good start. Going forward, however, concern for the economy should inform other elements of technology law, even those outside the patent system.

Intel and the ITC

In the Intel case (a limited version of which is also being heard in the U.S. District Court for the Western District of Pennsylvania) , plaintiff X2Y — a firm that Intel characterizes as a patent troll — is seeking a ban on the import of all computers containing Intel’s Core i3, i5, i7 and Xeon processors. In case you were wondering, that encompasses nearly every laptop and desktop that HP and Apple sell.

John McCain

A ban would mean a lot of lost business for Intel — thus the lobbying from Sen. John McCain (R-AZ), Sen. Ron Wyden (D-OR) and every other senator and representative from Oregon, Arizona and New Mexico. Intel employs tens of thousands of employees in those states, and they’d like to see those jobs stay. Of course, a ban would also affect companies such as HP and Apple that build computers containing the chips, as well as the retail stores that sell them.

However, while the ITC has the power to prohibit infringing products from entering the United States, it also has the flexibility to decide that such a prohibition would create more problems than it solves. The governing statute allows for a prohibition on imports “unless after considering the effect of such exclusion upon the public health and welfare, competition conditions in the United States economy, the production of like or directly competitive articles in the United States, it finds that such articles should not be excluded from entry.”

And while they’re also arguing the merits of the patent-infringement claim, attorneys for Intel, HP and Apple are also doing their part to make the “public health and welfare” case for their clients. In her National Law Journal article, Greene notes that Intel and HP attorneys are trying to paint a picture of X2Y as a patent troll that employees 10 people and has never made anything. Intel, on the other hand, invented the microprocessor and, according to a letter sent by one attorney to the ITC, “Without computer systems powered by Intel microprocessors, neither society nor business as we know it could be conducted.”

Greene says the ITC last used the “public health and welfare” exception in 1984, but is presently hearing another case — brought by Motorola Mobility against Microsoft’s and involving the Xbox 360 gaming console — in which numerous congresspeople lobbied the ITC on both sides of the issue. This could just be the start, she notes, because the ITC is going to start hearing more cases with potentially serious repercussions, and Congress ultimately controls the ITC’s budget.

It’s not just patents

If Congress is serious about building a strong, 21st-century economy, though, it will use its power to do more than just lobby in the occassional international patent lawsuit. Information technology is huge business, and the United States is home to many of its biggest players.

Apple is now the most-valuable corporation in U.S. history and singlehandedly changed the face of mobile phones. Google, Facebook and thousands of startups are rethinking how consumers interact with the web. Generally speaking, advances in IT are changing everything from the way we bursh our teeth to the way we insure our crops. It’s that powerful.

Getting the right laws in place around issues such as data governance, privacy, net neutrality and software patents could go a long way toward ensuring these companies continue to flourish and add new jobs. Sure, it can be difficult to draft forward-thinking legislation, and there certainly are competing interests at play representing both corporations and consumers. But if the economy is really what matters, then we’re going to need some smart laws.

Feature image courtesy of Shutterstock user Luna Vandoorne.

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  1. Karen Kazaryan Tuesday, August 28, 2012

    How about real patent reform?

    1. You know something Karen? I’ve been very vocal on this issue. I have.begun to lose hope. I feel the patent system is terribly broken. Technology has progressed so fast, that I don’t think the offices can keep up on applications for IPs. I think that they have basically rested any initiative in following up on whether others hold IPs or not OR what is considered patentable or not. I’m not claiming that this is what they do but, it almost appears they just trust the companies on good faith that they have done their own proper research before filing, then grant them and hope that they stick. We must add in the lawyers. When attorneys are involved as heavily as they are in patents, I don’t think change will happen.

      John B.

  2. The biggest problem is having a Congress that actually cares about people instead of lobbyists (Companies.) Doing what is right for the Taxpayer, Ratepayer in general will never please or satisfy companies. The patent office at present just can’t seem to say no, however something should be done so that if a company doesn’t have a finished implementation or product (fully working for sale to the public) no patent will be granted, and the patent office should be able to stand behind that decision without outside influence.

  3. I guess patent office has not been decorated for many many years and working on same old model. I agree that patents have different level including a proof of design and final working product. Definition of a patent requests need to be more subtle than ever because of many patent requests are very close to each other especially software patents that missing the minute detail can cause issue/verdict like what we just witnessed between Apple and Samsung. I am not even sure that in case of software patents, patent office have many technology experts who can define the patent character. Congressmen are just doing their job both in terms of Politics ( Their statement will be referred in future) and being lobbyist for companies who support them in elections and they can think that doing so is also in favor of American people and country as a whole (that is a good thing).

  4. The “public good” argument is entirely specious. Imports of Intel chip based products would not be interrupted if Intel simply licensed the patented technology. Public good would be preserved by protecting the intellectual property of small companies from large corps and politicians.

  5. x2y licences its technology to samsung and other companies its not like this is some fly by nite company looking to cash in big time. x2y has basically stopped electronic interference in circuitry someting that was said could never be done, the great senators need to do there homework on what x2y`s technology does, intel has egg on its face big time and are now cornered, and as far as going to steal there technology and ask the senators to step in is just plain wrong , it not the first time intel has ripped someone off Amd was awarded a large some for intel`s patent infringement, Intel needs to do the right thing and pay X2Y for there technology , you can`t steal from others an expect to get away with it just because your rich and powerful like intel idf the shoe was on the other foot you better believe intel would be the first to stomp on you for taking it. and then making billions in profit from it, just my two cents

  6. No, its not “the economy”, Derrick. Its the lobbyists who are legally bribing politicians to take their positions. That is the root of most of America’s troubles.

  7. They might as well have submitted their concerns on Intel letterhead. I hope the ITC will see as plainly as I that all those in favor of Intel host a lot in Intels interests in their states

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