Protect Patent Rights, Inventors and Innovation in 2014

WASHINGTON – As the Senate debate on patents and their role in innovation and job creation continues in 2014, the Innovation Alliance today renewed its call for a thoughtful, inclusive legislative process that takes into account the impacts of any changes to the current system on all stakeholders and successfully targets abusive behavior without harming innovators, job creators and the economy as a whole.

“The Innovation Alliance supports efforts by Congress to address behavior abusive of the patent system, but we must do so in a way that safeguards the strength of that system, which is at the very heart of our nation’s economic power. We continue to have concerns with many of the proposals under consideration in the Senate and firmly believe that we need to take the time to get this right. That’s why we stand ready to work with leaders in the Senate to develop a consensus product that will be a force for progress for the full range of American innovation,” said Brian Pomper, Executive Director of the Innovation Alliance.

Last month, following a Senate Judiciary Committee hearing on patent issues, a wide spectrum of stakeholders – from inventors, judges, and universities to companies and organizations representing America’s innovators – voiced their concerns with the proposals being considered by the Senate. While measures to target abusive behavior would be worthwhile, they should not be adopted at the expense of a patent system that has created the greatest economy in the world.

“The first rule of any patent legislation should be to do no harm, particularly to the inventors, start-ups and universities that create our nation’s next big fundamental technology breakthroughs that drive GDP and job growth,” said inventor Earl “Eb” Bright, COO ExploraMed and Board member USIJ. “The Senate has an opportunity to get this right and I hope they seize it – our standing as a global leader is directly dependent on the strength of our patent system and its ability to support innovative enterprises of all sizes.”

During the Senate hearing, several committee members also raised concerns that many key stakeholders – in particular, small inventors and universities – have not yet been heard in the process, and urged Chairman Patrick Leahy (I-VT) to hold additional hearings to allow for their testimony.

Pomper noted that certain provisions in the Senate proposals, if appropriately amended to avoid any undue burden on patent holders, would be welcomed improvements, including heightened pleading standards, enhanced disclosure of the real party in interest, and enhanced fee shifting. Similarly, proposals to enhance enforcement against bad faith demand letters could represent a constructive step if narrowed to explicitly target blatantly deceptive mass mailings, as opposed to legitimate licensing or pre-litigation correspondence. Certain others, he noted, are problematic, including:

• The customer stay provision as currently drafted is too broad, applying to all entities throughout the supply chain, including multi-billion-dollar global companies that benefit most from the sale of an infringing article. As drafted, it stays judgment for years and forces a patent owner into lengthy, piecemeal litigation to fully enforce its rights. The provision must be narrowed to target the small business end-users and retailers that are the true victims of abusive patent litigation and which have motivated its inclusion. Otherwise, the measure will result in significantly more litigation and infringement, not less.

• An expansion of the “covered business method” (CBM) program will hurt America’s inventors – both small and large – and weaken America’s advantage globally by subjecting a wide array of patents to serial challenges.

• Bifurcating discovery through mandated “one-size-fits-all” limitations on pre-Markman discovery will complicate, delay and increase the cost of litigation. 

• Mandating joinder of all parties with a direct financial interest in the outcome of an action could potentially force a broad range of stakeholders into litigation and needlessly increase the cost, duration and complexity of the case.

• Repealing “could have raised estoppel” will allow a party invoking post-grant review procedures to pursue piecemeal challenges to a patent’s validity.

“The America Invents Act was signed into law just over two years ago, and the reality is that we’re still learning the true impacts of the law. We need to be especially cautious in making further changes to the system before the long-term impacts of the previous reform are completely understood,” Pomper warned.

In December, investors and venture capitalists gathered in Washington to discuss the critical role our nation’s patent system plays in capital formation and the funding of investments. Investors asserted that weakened patents increased the risk in investments. Watch what forum participants had to say regarding patents here: http://www.savetheinventor.com/#!/portfolio/angel-venture-forum

About the Innovation Alliance

The Innovation Alliance represents innovators, patent owners and stakeholders from a diverse range of industries that believe in the critical importance of maintaining a strong patent system that supports innovative enterprises of all sizes. Innovation Alliance members can be found in large and small communities across the country, helping to fuel the innovation pipeline and drive the 21st century economy. Learn more at www.innovationalliance.net.