For the third straight year, Congress has been considering patent reform in an attempt to legislate “high-quality patents.” There is, however, no consensus as to what a high-quality patent really is. The House passed legislation to overhaul U.S. patent law on September 7, 2007, but the vote was close (220 to 175). The Senate Judiciary Committee approved the Senate bill, S1145, 13 to 5 on July 19, 2007. The bill is now pending in the Senate.
Intense lobbying by software companies, and media pressure to crack down on bad or low-quality patents has created public interest in sweeping patent reform. This is spurred, at least in part, by the public’s misunderstanding of the Blackberry decision, which has given rise to the notion that even if one infringes someone’s patent, one should not have to be punished for it.
The alarm has been raised over patent trolls, which do not make anything, to such an extent that even the Supreme Court felt compelled to weigh in, despite the fact that U.S. patent law does not require that patented inventions be commercialized. The possibility that what constitutes a low-quality patent is less a result of the fact that the rules for writing patents are unclear rather than that the rules for interpreting them are dubious has been largely ignored.
The patent reform legislation’s proposed limitations on infringement damages have drawn the most fire. Provisions that would establish postgrant opposition review, however, also pose a serious threat to innovation and investment in the life science sector.
Existing patent law in the U.S. has successfully created standards that led to the evolution of the IT and biotechnology industries. For more than 20 years as U.S. patent rights became more consistent and certain, technology-based segments have developed and flourished.
“Intellectual property, for which the U.S. government provides broad protection through means such as copyrights, patents, and trademarks, plays a significant role in the U.S. economy, and the United States is an acknowledged leader in its creation,” remarked Loren Yager, director of international affairs and trade for the U.S. Government Accountability Office, in recent testimony before the House Judiciary Subcommittee.
“In 2006, industries that relied on IP protection were estimated to account for over half of all U.S. exports, represented 40 percent of U.S. economic growth, and employed about 18 million Americans.”
Innovation is facilitated by access to what has been done before. The availability of funds to support early-, middle- and late-stage development of a commercializable product is also important. Finally, a climate that economically rewards risk takers is a must. People invest to get a return on their investment. Anything that increases the perceived risk or clouds an investor’s ability to assess that risk increases the likelihood that they will place their dollars elsewhere.