U.S. Patent System Falls to 12th Place in Chamber Global IP Index for 2018

By Gene Quinn
February 8, 2018

U.S. Patent System Falls to 12th Place in Chamber Global IP Index for 2018The United States was once again the top ranked country in overall score in the U.S. Chamber of Commerce’s annual Global IP Index for 2018, but the rankings are closer than ever. This year the United States edged out the United Kingdom by a mere .01 points on the Chamber scale. The U.S. position was helped by improved scores relating to copyrights and trademarks, but was dragged down as the U.S. patent ranking decreased for the sixth consecutive year as the result of a patent climate that the Chamber characterizes as causing “considerable uncertainty for innovators.”

While the United States continues to do well overall, patent protection continues to be problematic. In 2017 the U.S. ranked 10th worldwide in terms of offering patent protection to innovators. This year, the U.S. fell out of the top 10, tumbling to a tie for 12th with Italy. Countries ahead of the United States for patent protection are (in order from first place on the Chamber patent index): Signapore, France, Germany, Ireland, Japan, Netherlands, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. See page 35 of the Chamber report.

U.S. Patent System Falls to 12th Place in Chamber Global IP Index for 2018

While the U.S. continues to take steps backwards in terms of the overall patent landscape, a number of countries around the world have taken positive steps forward, including countries you might not ordinarily consider as patent friendly jurisdictions. Canada, China, Ecuador, India, Israel, Italy, South Korea, Spain, Taiwan, and the Ukraine all improved their scores relative to patent protection over the 2017 Chamber report. See page 22 of the Chamber report. Compared to 2017, China dramatically improved its score, raising from a score of 4.35 (out of 8) in 2017 to a score of 5.5 (out of 8) in 2018.

With a decrease in the score relative to patent protection from 2017 to 2018, the United States joins a handful of other countries that are not thought of as being particularly intellectual property friendly. Those countries having a weaker performance relative to patents in 2018 include the United States, Turkey, Saudi Arabia, Peru, Mexico, Indonesia, Columbia, Chile and Australia. See page 22 of the Chamber report.

The Chamber report notes that the U.S. score for patent protection has fallen lower in each of the successive editions of these Chamber rankings. To justify the patent ranking given to the United States the Chamber cited to Supreme Court decisions on patent eligibility (i.e., Mayo, Myriad, and Alice), and in particular to recent interpretations of those cases and guidance from the United States Patent and Trademark Office. The Chamber also expressed concern over how easy it has become to challenge patents in post-grant proceedings at the Patent Trial and Appeal Board.

The Chamber report explains:

[T]he patentability of basic biotech inventions was compromised by the Supreme Court decisions in the 2013 Molecular Pathology v. Myriad Genetics and 2012 Prometheus Laboratories, Inc v. Mayo Collaborative Services cases. The rulings raised uncertainties over the patentability of DNA molecules that mimic naturally occurring sequences as well as other patented products and technologies isolated from natural sources. In 2017, interpretation of the recent Supreme Court decisions in Myriad, Mayo, and Alice Corp vs. CLS Bank International by lower courts and guidance from the USPTO remained inconsistent and di cult to apply. There is considerable uncertainty for innovators and the legal community, as well as an overly cautious and restrictive approach to determining eligibility for patentable subject matter in areas such as biotech, business method, and computer-implemented inventions. This seriously undermines the longstanding world-class innovation environment in the U.S. and threatens the nation’s global competitiveness. As a result, in 2017, a number of legal societies and industry groups called for legislative reform of Section 101 of the U.S. Patent Act, citing the need for clarity on patentability in a wider, legislative context rather than in highly specific guidelines and case law.

With respect to opposition proceedings, despite the best intentions of new opposition mechanisms introduced in the America Invents Act, the ease of challenging patents during the post-grant period, particularly through inter partes review, has led to a high volume of trials (particularly for life sciences claims) and a disproportionate rate of rejections. Concerns have also been raised over a perceived reduced opportunity to amend claims in opposition proceedings and a lower burden of proof for opposing parties than in district court proceedings. As such, the opposition system in the U.S. provides a channel for bad faith actors and injects a great deal of cost and uncertainty for patent owners compared with other post- grant opposition systems.

“The majority of countries took steps to strengthen their IP systems and foster an environment that encourages and incentivizes creators to bring their ideas to market,” said David Hirschmann, president and CEO of the U.S. Chamber of Commerce Global Innovation Policy Center. “While a clear pack of leaders in IP protection top the rankings, the leadership gap has narrowed in a new global race to the top. There is still work to be done, and we hope governments will use this Index as a blueprint to further improve their IP ecosystems and grow competitive, knowledge-based economies. When countries invest in strong IP systems, we all benefit.”

Innovation Alliance Executive Director Brian Pomper today issued the following statement in response to the release of the U.S. Chamber of Commerce’s Global Innovation Policy Center’s 2018 International IP Index, which showed the U.S. falling to 12th place in its ranking of patent system strength:

The alarm bells continue to ring. The Chamber’s 2018 International IP Index is the latest evidence that harmful congressional actions and court decisions have dangerously weakened the U.S. patent system, the central foundation of our innovation economy. Last year, the U.S. dropped to 10th place in this ranking, marking the first time that the U.S. was not ranked #1. This year, the U.S. fell even further, to 12th place, and is now tied with Italy and behind countries such as South Korea and Spain.

According to the Chamber’s report, the U.S. has dropped in its ranking primarily due the excessive cost and uncertainty for U.S. innovators created by the America Invents Act’s inter partes review process, as well as recent Supreme Court decisions that have created confusion over what can and cannot be patented. The Chamber notes that these decisions ‘seriously undermine the longstanding world-class innovation environment in the U.S. and threaten the nation’s global competitiveness.’

This disturbing ranking follows warning signs in similar measures, including the recently-released Bloomberg Innovation Index, which showed the U.S. falling out of the top 10 most innovative countries for the first time. The U.S. must reassert its position as an international leader in innovation with smart fixes like the bipartisan STRONGER Patents Act, which would strengthen patent protections. We must not stand by as the U.S. continues to struggle and slip behind global competitors. We must act to ensure our patent system continues to serve as an engine for U.S. innovation and job creation.

 

UPDATED @ 1:32pm ET to include the statement of David Hirschmann.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 17 Comments comments.

  1. angry dude February 8, 2018 11:29 am

    Like I said years ago: The doc said ‘to the morgue’ — to the morgue it is!
    And no one here would believe me

  2. Bemused February 8, 2018 1:03 pm

    AD@1: We believed you the first time you posted that phrase on here and the 935th time you posted it. Surprise/shock/awe us. Post something helpful for a change. Post something that will reflect your warrior ethos and that you can do more than just bitch and moan. Post something that will show the douche-bags that are taking away our property rights and destroying the greatest innovation system in this history of the world that we will never stop fighting them. Go ahead. I dare you.

  3. Bemused February 8, 2018 1:11 pm

    Thanks, Gene for posting this article. Sadly, the continued drop for the U.S. in world patent rankings wasn’t surprising or unanticipated.

    On a real positive note, however, the U.S. this year is now slightly ahead of Hungary….(sarcasm off).

  4. Anon February 8, 2018 1:21 pm

    It certainly is not a matter of anyone “believing you,” angry dude.

    It very much is a matter that your “to the morgue” is a loser’s defeatist attitude that would only exacerbate the problem and fold to the desired effects of the Efficient Infringer desired Ends.

    Stop thinking of yourself as a “prophet.”

    Help, or get the F out of the way.

  5. Paul Morinville February 8, 2018 3:20 pm

    Bemused, On a serious note… I am really happy we are now ahead of Hungary. This was too embarrassing to even say on the Hill. At least now I can compare the US system to Italy. If I could just figure out what has been invented in Italy in the last 50 years to show the comparison.

  6. Anon February 8, 2018 4:33 pm

    Paul,

    Within the past twenty years a firm I was associated with had a sole US license to Italian IP in the sphere of machine tools.

  7. Ray Millien February 9, 2018 4:58 am

    Despite the worsening patent infrastructure, the good news is the US is still fourth in the world in terms of innovation (according to WIPO 2017 rankings here: http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017.pdf).

  8. Benny February 9, 2018 8:34 am

    ” U.S. patent ranking decreased for the sixth consecutive year ”
    Last year’s report gave the US a ranking of 7. This years reports gives the rank 7.25. That doesn’t square with the statement above.
    You do realize, of course, that the only reason US is ranked 12th and not 11th is because “I”(taly) comes before “U.S” in the alphabet, right?

  9. Respect Patents February 9, 2018 10:54 am

    Wake up USPTO and Congress. Are we going to allow us to slip to further like we do in global healthcare rankings? The patent system is much easier to fix than healthcare. It can all be done in 2018.

  10. PYT February 9, 2018 12:10 pm

    Not for nothing, but Ferrari’s powertrain engineers are some of the best in the world. Although I don’t know whether they’ve patented any of that technology.

  11. PTO-Indentured February 9, 2018 2:45 pm

    Gene: Thank you for promptly posting the U.S. Chamber of Commerce’s updated tracking of the USPTO’s continuing nose-dive under AIA/PTAB and the latter’s incalcuable losses inflicted on US patent value and innovation.

    I imagine this came as no surprise to you and most, if not all, pro-patentists. Yet appreciate that it adds substantively to the body of concrete evidence in how the AIA and its proponents (including those of vested, if not dubious, interests in swaying PTO rule-making) — in the fastest manner on record — blew a #1 U.S. patent system standing entirely out of even a TOP-10 ranking (now tied at 12th ranked).

    The Chamber’s announcement caused me to reflect a bit on how the process of this demise in U.S. patent value ‘got framed/characterized’ along the way — since AIA’s inception. For example, consider the prominence gained by the term ‘post-grant’ review — a concise / tidy little phrase.

    Ironic: AIA/PTAB/IPR have proven to be murderous only to a ‘post-grant’ class of U.S. patents.
    Phew… What if instead, they’d been proven serial killers of 9 out of 10 U.S. ‘issued’ patents? Imagine the damage THAT defenselessness would add to a still plummeting value of U.S. patents! (sarcasm off)

    To any reader new to patenting here: there is only one kind of patent: it’s a post-grant / issued patent. There is no such thing as a ‘pre-grant’ / pre-issued patent. What purposely gets attacked (and even serially attacked) under AIA — is, and can only be, an ‘issued patent’. Not deemed 9 times out of 10 “lesser”, deemed 9 times out of 10 invalidated. A PTO on-going practice, all but admitting, — for years — 9 out of 10 patents aren’t just questioned and fine-tunable — they are so poor and numerous when issued by the PTO 90% must be invalidated.

    Suggestion: Let’s Start Calling a Spade, a “Spade”

    In that a ‘post-grant’ patent brought under review, is nothing more than a PTO “issued-patent” attacked under an arsenal of AIA rule-made weapons, making “issued patents” much easier to defeat, let’s call the review, serially killing off 9 out 10 patents, what it is: a PTO-issued/PTO-weakened patent, review.

  12. angry dude February 9, 2018 9:38 pm

    Respect Patents@9

    Patent system can be easily fixed indeed
    The only problem is that the “fix” will inevitably lead to stock market crash of the most valuable big tech companies in US… cause their market valuations are grossly over inflated because of all of the stolen IP they use in their products…
    Ant gonna happen

  13. Respect Patents February 9, 2018 9:53 pm

    IPR has become a weapon of mass destruction. The US economy luckily is very diverse. Industries outside of software companies making more important things than social media, message, or photo apps will push the pendulum to swing. Hopefully it will swing like a wrecking ball against those tech leaders that caused this. Nature’s justice.

  14. Night Writer February 10, 2018 10:41 pm

    I do prosecution all over the world. I’d say that chart represents about what I experience.

    I will say, though, that the US examiners are really pretty good. The best are second to none.

  15. angry dude February 12, 2018 2:30 am

    Respect Patents @13
    “Hopefully it will swing like a wrecking ball against those tech leaders that caused this. Nature’s justice.”

    Arrogant SV tech “elite” needs to be punished
    punished big time
    And I will gladly do it if they (US government) allow me
    but they won’t…

  16. Lost In Norway February 12, 2018 7:05 am

    I don’t demand that the US be top of the charts every year. But getting beat by Sweden and Spain? I deal with those people (often, unfortunately) all the time and it is a disgrace that they are doing better than us.

    Thanks USPTO and SCOTUS. Your short sightedness and treating rights as a game really hurt.

  17. John L Guymon April 17, 2018 11:03 pm

    There are reasons for the decline – I can show you many ways at which the USPTO is still up to the same old same old….. SAWS didn’t stop; the ‘one’ blade was just removed. There are many others… they started 2013 & 2014.

    To make the United States patent system good again is going to take a little effort.

    Anyone care to share details? Anyone out there who truly wants to get to the bottom of all the SAWS dust and see the new teeth on the new blades and dare stop them?

    I will. I am. Care to join me? Email me and let me know. Thanks.

    JohnLewisGuymonJr@yahoo.com or

    Admin@Intelledoc.Com