Our patent system is a public resource. Over two hundred years ago, America crafted a bargain offering inventors a limited exclusive right in exchange for disclosure of a meritorious invention. The objective was, and is today, to simultaneously encourage innovation and increase the public store of knowledge. Both public and private interest is served by robust reliance on that system. Thus, we must carefully restrict ourselves to changes to that system that are consistent with that bargain, and that encourage inventors to take advantage of its benefits.
Inventors and investors demand a system that affords predictable and durable intellectual property rights in a timely manner. If the system that we implement for granting patent rights does not meet those criteria, inventors will not make use of the system, the public store of knowledge will suffer, and investment in innovative and entrepreneurial domestic enterprises will diminish. Perhaps more importantly, if those rights are not found here, the procurement of intellectual property rights and associated investment and commercialization will move to foreign lands. The result will be lower domestic economic output, fewer jobs, and a decline in American innovation.
We are already seeing this unfold. In 2015, the European Patent Office (EPO) saw an increase in patent filings of 4.8 percent overall, and of 16.4 percent in applications from US companies. The EPO acknowledged that “the strong growth in [EPO patent] applications from the United States is also due to the effects of a change in US patent law.” In contrast, over the same period, the USPTO saw a decline in patent filings.
There can be no doubt that the increase in EPO filings, and the simultaneous decrease in USPTO filings, is due to the referenced implementation of the AIA, and a corresponding erosion in trust in the U.S. patent system. It is also due to concerns arising out of institutional challenges (e.g., USPTO resources and funding), as well as uncertainty in light of judicial changes to our patent law. Specific concerns relate to the durability of a granted US patent (e.g., susceptibility to post-grant attack); the shrinking, and uncertain, scope of patent eligible subject matter; uncertainty as to exclusivity (injunctive relief); and the market value of the property right in view of legislative efforts to restrict enforcement options.
These data, and at least one independent survey, show that innovators and IP experts alike believe that European patents are obtained more rapidly and reliably, and receive higher quality examination. Europe is also becoming a more appealing venue for patent enforcement, a trend that will gain momentum with the impending establishment of the European Unified Patent Court. If Europe is becoming a more appealing venue for patent protection, then we must conclude that European patents are perceived as more reliable and enforceable, and thus, having greater market value.
Collectively, these changes are taking a toll on American innovation. They are diminishing investment in, and thus the viability of, business formation in America. This will work to the profound detriment of the U.S. economy, and it puts at risk our traditional role as the most innovative people on the planet. We must be diligent and dedicated in our efforts to reverse this trend.
 European Patent Office, Annual Report 2015 (https://www.epo.org/about-us/annual-reports-statistics/annual-report/2015.html)
 European Patent Office, “Demand for European patents continues to grow”, March 3, 2016 (http://www.epo.org/news-issues/news/2016/20160303.html)
 US Patent and Trademark Office, Performance and Accountability Report 2015, p. 184 (showing a decline in utility patent application filings from 579,873 in FY2014 to 578,321 in FY 2015; as well as in US patents issued, from 329,612 in FY2014 to 322,448 in FY2015).
 eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006).
 In a 2015 survey of patent professionals by Intellectual Asset Management (IAM) magazine, the EPO ranked first for patent quality among the world’s largest patent offices, followed by the Japan Patent Office, and then the USPTO in third place (http://documents.epo.org/projects/babylon/eponet.nsf/0/4783c6465d9a2b5fc1257e5900242b3f/$FILE/IAM72_benchmarking_q_p_en.pdf).
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