Posts in Legislation

Reality Check: Patents Foster Innovation and Economic Activity

The trouble is the so-called “patent reform” would cripple small businesses that innovate and need patents, while at the same time not offering any relief whatsoever to those small businesses that are being targeted by the bad actors… The inconvenient truth is that there is no evidence that a weaker patent system fosters innovation, but there is overwhelming evidence that a strong patent system does foster innovation, leads to growth, investment from abroad and a more prosperous economy. Indeed, weak patent rights virtually guarantee innovation simply won’t happen. We know that because where there are weak patent rights, there is no innovation, and there is no economic activity. Indeed, if a weak patent system were the answer you would expect countries that have a weak patent system, or no patent system at all, to have run away innovation. What you see, however, is the exact opposite. This fact alone rather conclusively demonstrates that those who assert that patents stifle innovation are simply wrong.

Easing the Standard for Recovering Attorney Fees in Patent Cases

I think that the Supreme Court decision will be enough to prevent the so-called “patent reform” from gaining any traction in the Senate. The cynical view is that there is so much lobbying money flowing why would Congress want to turn that spigot off when it could easily flow into the next Congressional term? Further, there has been a growing and steady effort by those opposed to the pending patent legislation. Opponents were already making their case heard as the Senate continued to time after time postpone dissemination of the Manager’s Amendment, signaling the consensus that some Senators desperately wanted to reach was illusive, if not impossible. Now with the Supreme Court decisions in these two cases those on the Hill who were already skeptical have more than enough ammunition to slam on the brakes, at least for now, to see what the ultimate ramifications of the decisions will be on the reality of patent litigation.

Why ‘Patent Reform’ Harms Innovative Small Businesses – Summary

The purpose of the U.S. patent system has been to promote innovation. The various ”Patent Reform” bills will in fact retard innovation and cost America jobs. They are contrary to the Founding Fathers’ intent in Article 1, Section 8, Clause 8 of the Constitution, contrary to the policies of over 220 years of patent law, contrary to the advice of the Office of Advocacy of the Small Business Administration, and contrary to prior statements of President Obama.

‘Patent Reform’ Tips Power in Favor of Infringers and Against Small Businesses

In this Part IV, we will discuss the proposal that all interested parties by plaintiffs, the enhanced pleading requirements, limitations on discover and customer stays. While some of these provisions may seem to make sense on their surface, and tailored to provide greater transparency, the reality is that the provisions are extraordinarily burdensome. For example, as written one proposal would require a corporation bringing a patent infringement lawsuit to disclose every stockholder no matter how few shares are owned. Furthermore, by micromanaging patent litigation discretion will be taken away from district court judges while at the same time onerous obligations are placed on small businesses before they can even begin to assert patent infringement, which is problematic because so many entities already knowingly choose to infringe rather than negotiate licenses or engineer around patent rights.

‘Patent Reform’ Will Keep Small Business Inventions From Being Commercialized

In this Part III, we will discuss the Covered Business Methods (CBM) expansion and the proposed elimination of post grant review estoppel. If these provisions are enacted it will provide greater incentive to challenge granted patents, making serial challenges the new norm. This will substantially and negatively impact small business innovators who will be forced to continually fight to keep the patents they have obtained after having already spent many years during patent prosecution to obtain the rights. This means patent rights will never be more than an expectation and not a true property right. Therefore, if these provisions are enacted it will mean no patent is every truly safe, no title is every quieted, and this will substantially, and negatively, impact investment opportunity and ultimately the commercialization of innovations.

Raising the Cost of Enforcing Patents: ‘Patent Reform’ Prices Small Businesses Out of the Inventing Business

The US House passed the Innovation Act (HR3309) in December 2013. The Senate is now well on its way to incorporating this legislation which will make Americans poorer. The bills have many problems that will inhibit small inventors, but the most insidious are “Loser Pays” and “Pay to Play”. It changes the law, singling out inventors as a class so onerous that only they must pay the other side’s legal fees if they don’t win every claim. Pay to Play makes inventors guarantee payment up-front. Some proposed Senate bills (e.g.: S.1013 & S.1612) make sure that almost all Americans and most small companies will never be able to afford to enforce their patents on their inventions.

Why ‘Patent Reform’ Harms Innovative Small Businesses

For small business, patents will become mostly unenforceable due to the proposed much higher upfront cost of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation. Legislating disincentives for capital investments will result in the loss of many hundreds of billions of dollars of wealth in America and dry up the major source of new jobs, small inventing businesses… Patents are the number one indicator of regional wealth according to the Federal Reserve Bank… If these “Patent Reform” bills are signed into law, they will discourage small business patents, and the contrapositive indicates that we will be a poorer nation.

Hunting Bayh-Dole Vampires

The government is funding basic research at universities, not drug development. Bayh-Dole allows schools to own resulting inventions and license them for commercialization. These discoveries are more like ideas than products. The expense and risk of development falls on the private sector. A study in Nature Biotechnology on drugs commercialized from federally-funded inventions finds: “the private sector spends 100-fold or more to bring the product to market than the PSRI (public-sector research institution) spends in research directly leading to the invention.” Here’s why: for every 10,000 compounds about 250 make it to preclinical testing, 5 go to clinical trials, and one enters the marketplace. Of these just 20% turn a profit– and they must pay for all those which died in the pipeline.

NIH Gets It Right: Bayh-Dole is not for Price Controls

The National Institutes of Health recently made its long anticipated ruling on a petition seeking to use the “march in” provisions of the Bayh-Dole Act as a mechanism for the government to control prices on drugs derived from federally-funded research by issuing compulsory licenses. The petition was a reiteration of one dismissed in 2004 seeking to have the government march in to control the price of Norvir, part of the AIDS “cocktail.” … Before Bayh-Dole not a single drug was commercialized when the government took patent rights away from inventing organizations. Under the law at least 153 new drugs and vaccines are now alleviating human suffering world-wide.

Bayh-Dole: A Success Beyond Wildest Dreams

Of course it would be wonderful to live in a world where self-interest takes a back seat to humanitarian efforts and altruism on all occasions; where financial incentives are not required to promote the greater social good. That, however, is not the world we live in and the regimes where this economic philosophy has been tried have unanimously faltered or failed. If we want maximum good for society pursuing a path that results in maximum good ought to be the agenda, not some pollyannish pursuit of the impossible because it feels better or fits into some pre-ordained social narrative that some deem acceptable. Failure for an altruistic reason is still failure, and when we are talking about the economy, jobs and hundreds of life saving treatments and cures the right thing is to do the most good. It is truly a pity that some would choose not to maximize social good simply because it means someone else will make money in the process.

High Noon for Bayh-Dole

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) asked NIH in a July 12 letter to force compulsory licensing of Myriad’s BRCA breast and ovarian cancer genetic test under the “march-in rights” provision of the Bayh-Dole Act. Myriad received an exclusive license to develop the test from universities operating under Bayh-Dole Act. The law allows nonprofit institutions receiving federal R&D funds to own and license resulting inventions so they can be commercialized for use by the public. Critics of Bayh-Dole have long sought to reinterpret its statutory standards under which the government can compel universities to issue compulsory licenses as a weapon to control prices. This was not the intent of the law.

Intellectual Dishonesty About Bayh-Dole Consequences

Prior to the enactment of Bayh-Dole 0 drugs were commercialized from underlying university research. Since Bayh-Dole became law 153 new drugs, vaccines, or new uses for existing drugs are fighting disease world-wide.

Being Green: Bayh-Dole Makes Every Day Earth Day

Normally when we discuss the impact of the Bayh-Dole Act, allowing universities and small companies to commercialize inventions made with federal support, we focus on the life sciences where the resulting new drugs and therapies dramatically improved lives for millions around the world. However, the celebration of Earth Day is an appropriate time to consider the contributions our publicly funded research organizations– partnering with an entrepreneurial private sector– make in protecting our environment.

Fuel Cells and Bayh-Dole: The Pursuit of a Hydrogen Energy

HyperSolar, Inc. has developed a technology that they claim will produce hydrogen that is renewable and utilizes natural power sources: sunlight and water. Who knows whether the HyperSolar/UC technology will ultimately lead to the dawn of a hydrogen energy economy. What we do know is that without the forward-thinking legislation that gives Universities incentive to partner with the private sector there would be no such potential. As alluring as alternative, cheap, clean energy is, efforts to get from where we are to where we ultimately need to go will be extremely expensive and the research highly speculative. Such high cost and extremely speculative research is realistically only carried out by Universities.

Bayh-Dole Supporting Student Innovation and Entrepreneurship

Ongoing efforts to support student entrepreneurship and/or invention on campus included a variety of programs: 84% of schools have entrepreneurship classes, bootcamps or other similar programs; 72% have business plan competitions; 50% have incubators for student-owned companies; and 41% offer student entrepreneurship funding. “By supporting student innovation and entrepreneurship, AUTM hopes to see commercialization of student inventions grow just as we have seen growth in the commercialization of faculty inventions,” says AUTM Vice President for Membership Phyl Speser.