Dr. Nathan P. Myhrvold’s recent testimony before the Senate Subcommittee on patent reform makes a strong case for the rights of small inventors and businesses in the patent arena. Coming from a now-wealthy man who could easily join the forces of big business, it’s refreshing that Dr. Myhrvold has not rewritten history or otherwise forgotten where he came from.

(Many thanks to J. Matthew Buchanan, publisher of the “Promote the Progress” I.P. blog, for making this and other records of the Subcommittee hearings available at his site.)

Dr. Myhrvvold’s testimony is insightful, informative and well worth reading. He makes several valid points to counter the proposed “reforms.”

As to the argument that small inventors play only a minor role in technical innovation, he points out that even the largest companies rarely hold more than 10% of the patents in a given field: “[I]f you add them up, universities, individuals and small businesses in aggregate have substantially more processor patents than Intel or IBM — indeed more than the two combined. Small inventors have more operating system patents than Microsoft, more networking patents than Cisco and more wireless patents than Qualcomm.”

Testifying further, he says, “Critics of the patent system sometimes talk derisively about the ‘myth of the small inventor’, ignoring their contribution. Well, I am here to tell you that small inventors are not only alive and well, but they actually contribute more inventions than the biggest corporations do.”

Dr, Myhrvold also makes a strong case why injunctive relief must remain an appropriate remedy for patent infringement. Pointing out that “irreparable harm” is not an appropriate element of permanent injunctive relief, Dr. Myhrvold testified that, “[T]he Committee Print says, in effect, that it is okay to take the property of the patent holder as long as it won’t irreparably harm them. This is tantamount to saying it’s okay for a squatter to camp on your lawn as long as the harm to you isn’t ‘irreparable’. This flies in the face of most concepts of property.”

As to the claim that there is an explosion of patent lawsuits, Dr. Myhrvold points out that, “The magnitude of the supposed problem is not borne out by the statistics.” Pointing out that just over 2% of the patent lawsuits filed over the past 5 years were filed by entities that do not produce products, Dr. Myhrvold testified that, “Those horror stories aren’t about an epidemic or situation that is out of control — it is actually a very minor phenomenon.”

Finally and tellingly, Dr. Myhrvold points out that large American companies — the ones that supposedly produce actual products — often don’t really produce products after all. They do R&D, they come up with brilliant designs, and then, increasingly, they send this intellectual property offshore for actual manufacture elsewhere. “As it stands, it is becoming ever rarer for an American company that ‘makes’ products to actually do the manufacturing. Instead they design products that are built by others, often outsourced overseas. What is the difference between that, and an inventor who licenses his patents?” Good question indeed.

I’m admittedly biased in this debate, but I think Dr. Myhrvold’s testimony is valid and accurately identifies the flaws in these so-called “reforms.” Coming as they do from someone who has “been there” and “done that,” I think the Senate Subcommittee would be wise to credit Dr. Myhrvold’s views and give them considerable weight.