Posts in Legislation

While widespread patent reform seems unlikely during the remainder of the 114th Congress, targeted patent reform is another matter entirely. Indeed, the Senate Committee on Small Business & Entrepreneurship recently held a hearing largely attacking the America Invents Act (AIA) and the current reform bills and in a bi-partisan manner. And this week we may see a bi-partisan push in the Senate for a bill that focuses only on venue reform, which will be co-sponsored by Senator Jeff Flake (R-AZ) and Senator Cory Gardner (R-CO). The bill, available in draft form, is titled the Venue Equity and Non-Uniformity Elimination Act of 2016.

We’re in the business of transforming early stage, publicly funded research into useful products. The odds against success are long as commercialization requires years of hard work, a lot of money and some luck. We’d like to think that this effort is universally appreciated. Many in this profession ignore the public policy debates swirling around, thinking that no one will believe our critics or that someone else will defeat them. That’s a serious mistake.

Committee chairman Senator David Vitter (R-LA) began the hearing by speaking about the importance of a strong patent system to small businesses all over America, as well as the importance of those small businesses to the U.S. economy. Vitter remarked that small businesses have provided two-thirds of all net new jobs since the 1970s and they also produce 16.5 times more patents per employee than larger enterprises. Recent legislation causing major changes in the country’s patent system, including the Leahy-Smith America Invents Act (AIA), have made it more difficult to enforce patent rights. “It’s essential to remember that many legitimate owners of intellectual property do not manufacture anything but nonetheless have legitimate claims of patent infringement against other parties,” Vitter said. He was also wary of the “staggering rate” of decline in patent value during recent years, stating that during the past four years patent values have dropped by as much as 80 percent.

What we can, and should, address are institutional challenges. Regrettably, our institutional approach to patents has only further challenged small business and diminished innovation. Those challenges come from changes to our patent law in the America Invents Act (AIA), and precedent that has compromised the exclusive nature of the patent right (eBay v. MercExchange), and rewritten the law of patent eligible subject matter (Alice, Mayo and Myriad). Perhaps most significantly, pending legislation (S. 1137 and H.R. 9), if enacted, will further curtail the patentee’s ability to enjoy the rights granted and to seek just reward for infringement. On top of all this is profound uncertainty as the US Patent and Trademark Office (PTO) struggles to keep up with these changes.

Small businesses and independent inventors are critical to revolutionary advancement of American technology. They file over 20% of the applications at the USPTO, and their patents are more likely to encompass breakthrough inventions, rather than incremental change. While Congress has considered a range of legislative reforms, the other branches of government have also been moving forward with challenges confronting the patent system. It is important for America that we get this right. Thoughtful legislation can further improve the patent system and lead to more job creation and economic growth as long as we remember that it is the patent system fuels America’s innovative spirit.

For Cruz his depth of sincere appreciation and awareness of the role patents and private property rights comes from his meager roots, from his work as an attorney in private practice for commercial clients, and working for the people of Texas as their Solicitor General and on cases involving eminent domain and intellectual property. If the 2016 Presidential race were simply a one issue contest Cruz would certainly enjoy a substantial advantage. But since the 2016 race is defined by personality then it is worth noting how much Cruz has in common with Abraham Lincoln, thanks to patents. Among other things, just as Ted Cruz used patent litigation to fund his Senate campaign, Lincoln funded his Congressional and Presidential campaigns on patent lawsuits.

Several questions every patent attorney should be asking before responding to an Alice rejection are: (1) How many Alice rejections has the examiner issued? (2) What does he or she consider to be the sticking points of the decision? (3) How many applications that received an Alice rejection were eventually allowed? Once an attorney has the answers to these questions in hand, the path to success in responding to an Alice rejection is considerably clearer.

AUTM collects quantitative data and facts about the benefits of university tech transfer, but the qualitative evidence is actually the most important. With the Better World Report, which just hit 500 stories, AUTM provides evidence that university tech transfer makes a better world. Just look at those stories in the Better World Report; they’re heartwarming. It is amazing that some of the critics tend to overlook or completely discount the very real stories of success. I don’t know what the critics are after— I guess the success of university tech transfer doesn’t fit the narrative that they wish to impose on everybody.

During Reinhart’s year as President much changed at AUTM. There was a concerted effort to transition to a a strategic board of directors that would result in more dynamic member engagement, AUTM hired a full-time Executive Director, the organization spent a great deal of time developing more effective relationships with industry, AUTM bolstered it’s relationships with key university organizations, and AUTM began more earnestly working on international initiatives. While more progress was made in some areas than in others, progress has been achieved across the board. All-in-all, Reinhart’s tenure at the helm of AUTM was quite successful and he has helped set the organization up for the challenges that lie ahead.

It is pure nonsense to say that opponents of patent reform never offer specifics, cite or discuss textual language of the bills. Utter fiction and complete fantasy. Frankly, Lee’s claims are as comical and insulting as they seem to be uninformed. Only the most disingenuous partisan could suggest that opponents of patent reform do not offer specific explanations citing to textual language of the bills. Indeed, quite the opposite is true. Opponents of patent reform make far more detailed and nuanced arguments. These intellectual, detailed, nuanced arguments have lead those fighting patent reform to lose the linguistic battle time and time again. So not only is what Lee saying false, but it is 180 degrees opposite from reality. So spurious are Lee’s claims that at first glance the article comes across as a piece of patent satire published by The Onion.

Some states have decided that they can’t wait for a federal response on the collection of online sales tax, prompting them to enact their own measures. In Utah, where less than one percent of taxpayers actually pay the use tax they owe the state for Internet retail transactions, some state lawmakers have collaborated on crafting a bill that would give the state more power in collecting sales tax from online retailers, with or without a physical presence within the state. In South Carolina, January 1st of this year brought about the end of a tax break offered to Amazon for building a distribution center in that state. The collection of sales tax from Amazon sales to South Carolina consumers is expected to bring in about $13.8 million in additional tax revenue through 2016, according to projected revenues released by South Carolina’s tax department. The distribution centers built by Amazon serve as the physical in-state nexus which requires it to collect sales tax from South Carolina consumers.

The new year was hardly underway before Representative Lloyd Doggett (D-TX) and 50 of his House colleagues sent a letter to Health and Human Services Secretary Sylvia Burwell and NIH Director Francis Collins urging them to “march in” under the Bayh-Dole Act to control prices for drugs developed under the law. While the high cost of drugs is a legitimate concern, attempts to address the problem through technology transfer statutes would only guarantee that we will have fewer new drugs, not that they will be cheaper. The march-in provision is intended for instances when a licensee is not making good faith efforts to bring an invention to market or when national emergencies require that more product is needed than a licensee is capable of making, not to fix drug prices.

The Patent Act itself clearly and unambiguously states that patents are property. See 35 U.S.C. 261. Unfortunately, this property right of Constitutional significance has increasingly come under attack over the last decade. Without either substantial legislative fixes, or a new Administration that orders a new Director of the USPTO to rewrite post grant regulations, no single case could undue the significant damage that has been done to the U.S. patent system by the creation of the PTAB and post grant proceedings. That being said, Cuozzo does offer an excellent opportunity to say enough is enough and fight to protect a Constitutionally critical property right our most respected Founding Fathers thought to be absolutely critical.

For hoarders, once an item comes into their possession, such individuals develop an unreasonable emotional attachment to it. As these possessions, many of which are viewed by others as worthless, continue to accumulate, they become both a health and safety hazard to the hoarders and those about them until some concerned party, typically a family member or a governmental authority, intervenes. Much the same problem is found in some managers of patent portfolios.

As interesting as the Senate may become when patent reform resurfaces, the dynamic in the House will be fascinating for many reasons. Since patent reform stalled there is a new Speaker of the House, Paul Ryan (R-WI). Speaker Ryan has said he plans to return the House to regular order and allow business to trickle up from members to the full House rather than have legislation forced down from leadership on Members. It is widely known that Goodlatte and Issa continue to want more patent reform and are seeking opportunities to push forward to a vote in the House. Will Speaker Ryan allow the Innovation Act to come to a vote in the House?