On Monday, August 5, 2013, the the Association of University Technology Managers (AUTM), a nonprofit association of academic technology transfer professionals, released the highlights of the AUTM U.S. Licensing Activity Survey: FY2012. The AUTM survey shares quantitative information about licensing activities at U.S. universities, hospitals and research institutions.The full report is scheduled for release at the end of the year.
The highlights of the survey reveal that University licensing and startup activity continued to see a robust increase during fiscal year 2012.
Institutions responding to the survey reported $36.8 billion in net product sales from licensed technologies in fiscal year 2012. In addition, startup companies formed by 70 institutions employed 15,741 full-time employees. This was the second year in which AUTM asked questions specifically targeted at ascertaining the economic impact of academic technology transfer.
Nothing fires up a legislative debate like an unexpected White House intervention, and if the Obama administration’s patent-policy announcements this month were aimed at generating headlines and Capitol Hill conversations, they succeeded. See White House Task Force on High Tech Patent Issues.
But if the intent was to steer the debate toward a balanced approach that would curb frivolous litigation without imperiling an intellectual-property protection system so key to nurturing innovation and job protection in this country, the effort appears to have failed.
Please don’t get me wrong. There are plenty of good reasons for the White House to get involved.
There are nearly half a dozen patent-related bills or proposals under consideration in the House and Senate, and the debate is sorely in need of facts and serious study. Much of the proposed legislation would make wholesale changes to the patent system, ignoring two centuries of clear evidence that strong patent protection promotes innovation, economic growth and a higher standard of living for Americans.
On June 4, 2013, President Obama announced a set of 12 initiatives – 7 proposed legislative actions and 5 executive orders – intended to address perceived problems from Patent Assertion Entities (PAEs). The announcement quoted aspersions Obama had cast at PAEs earlier in the year: PAEs “don’t actually produce anything themselves;” instead their purpose is “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”
Obama’s action plan was heavily influenced by a report, “Patent Assertion and U.S. Innovation,” which was released by the President’s Council of Economic Advisers, the National Economic Council, and the Office of Science & Technology Policy. The full text of the report can be readhere.
It is surprising that a report that was prepared by such an august and high-level set of entities could be so blatantly biased and one-sided. The body of the report slams PAEs and points to everything that’s bad about them. It creates an artificial distinction by referring to “good” patent middlemen as “patent intermediaries,” although there is no indication in the report of what are the characteristics of a good “patent intermediary” versus an evil PAE.
Yesterday the U.S. International Trade Commission (ITC) issued a final determination in one of the many ongoing proceedings between Apple and Samsung. These companies are battling each other in a variety of forums across the globe, which all together form the worldwide patent war over smartphones and tablets between the two tech giants. In this case the ITC found a violation of section 337 and issued a limited exclusion order prohibiting Apple from importing wireless communication devices, portable music and data processing devices, and tablet computers that infringe claims 75-76 and 82-84 of U.S. Patent No. 7,706,348. The ITC also issued a cease and desist order against Apple prohibiting the sale and distribution within the United States of articles that infringe claims 75-76 and 82-84 of the ’348 patent. No violation of U.S. Patent Nos. 7,486,644, 7,450,114, and 6,771,980 was found.
Which Apple products are implicated? The ITC determined that Samsung proved that AT&T models of the iPhone 4, iPhone 3GS, iPhone 3, iPad 3G, and iPad 2 3G infringe the asserted claims of the ’348 patent.
The ITC determination is now final, and the investigation is terminated. Apple has the opportunity to appeal the ITC final determination to the United States Court of Appeals for the Federal Circuit. But there is also another avenue for Apple, which could essentially nullify the ITC determination. Pursuant to 19 U.S.C. 1337(j), the President has 60 days to review the ITC determination. If the President disapproves of the ruling for policy reasons he has the authority to nullify the determination. The statute specifically explains that upon disapproval of the President an ITC determination “shall have no force or effect.”
There is no doubt that the Obama position will be loved by Google and other Silicon Valley technology giants that despise the patent system. Given the revolving door between the Obama Administration and Google, the long-term close relationship between President Obama and Google (see here, here and here), and the fact that patent issues don’t resonate with John Q. Public, it seems likely that the President stepping in now to allow him to tout that he is engaged with issues of importance in the minds of tech giants who will be asked for large checks later this week.
But what executive action could the President really take that would make a difference?
Today the White House announced major steps to improve incentives for future innovation in high tech patents, a key driver of economic growth and good paying American jobs. The White House issued five executive actions and seven legislative recommendations designed to protect innovators from frivolous litigation and ensure the highest-quality patents in our system. Additionally, the National Economic Council and the Council of Economic Advisers released a report, Patent Assertion and U.S. Innovation, detailing the challenges posed and necessity for bold legislative action.
In 2011, the President signed the Leahy-Smith America Invents Act (AIA), a landmark piece of legislation designed to help make our patent system more efficient and reliable. As technology evolves more rapidly than ever, we must ensure our patent system keeps pace. As President Obama said in February, “our efforts at patent reform only went about halfway to where we need to go. What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.”
The AIA put in place new mechanisms for post-grant review of patents and other reforms to boost patent quality. Meanwhile, court decisions clarifying the scope of patentability and guidelines implementing these decisions diminish the opportunity to game the patent and litigation systems. Nevertheless, innovators continue to face challenges from Patent Assertion Entities (PAEs), companies that, in the President’s words “don’t actually produce anything themselves,” and instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” These entities are commonly known as “patent trolls.” Likewise, the so-called “Smartphone Patent Wars” have ballooned in recent years and today, several major companies spend more on patent litigation and defensive acquisition than on research and development.
The White House website explains that it is the right of the people to petition the government, a right that is guaranteed by the First Amendment of the United States Constitution. Of course, the idea of petitioning the President is not something that is new, but the ability to use the Internet to create an online petition that may be considered and responded to by the Federal Government is indeed quite new. Not surprisingly, the Obama Administration, known for savvy use of the Internet both in governance and campaigning, pioneered this unique approach to making government reachable by the masses.
With this in mind, last week, a petition was created to petition the White House to take down the website Jerk.com. To date the petition has unfortunately not received many votes. Earlier today I was the 28th e-signer of the petition. My guess is that this is due to lack of publicity more so than anything else. Once people learn of the petition my guess is that the signatures will accumulate quickly, but will there be enough time to reach the 100,000 signature threshold by February 22, 2013?
The first order of business, however, is to get the required 150 signatures so that the petition will be searchable on WhiteHouse.gov. To view and/or sign the petition visit We the People.
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