Tech Transfer eNews Blog

Senate hearing suggests moderate approach to U.S. patent law reforms

By David Schwartz
Published: March 25th, 2015

Representatives of small business and universities reached a significant consensus at a recent Senate hearing to identify ways to reform the patent system without hindering innovation or harming small business owners.

Reform proposals are targeted at abusive behavior within the patent system, notably the activities of so-called patent trolls, though some businesses are concerned that the reforms would lump well-meaning companies in with the bad actors and make it difficult for them to enforce their intellectual property.

David Winwood, president-elect of the Association of Technology Managers and chief business development officer at Louisiana State University’s Pennington Biomedical Research Center, stated at the hearing that the passage of H.R. 9, known as the Innovation Act, “stifles a university’s ability to enforce patent rights.” According to Winwood, the bill marks an overzealous pursuit of patent trolls that could have the unintended consequence of putting the U.S. patent system out of reach for universities and small businesses alike.

Robert Schmidt, co-chair of the Small Business Technology Council, noted that the U.S. Federal Reserve has found that patents are the top indicator of a region’s wealth and that 37% of American engineers and scientists are employed by small businesses. Schmidt made his opinion on H.R. 9 clear when he referred to it as the “Ending the American Dream Act.”

Rachel King, founder and CEO of pharmaceutical company GlycoMimetics, points to a lesser known type of abuse that the America Invents Act has allowed through inter-partes review (IPR) and other post-grant proceedings it created. King argued that because so many patents challenged through IPR are invalidated, a hedge fund could short sell a biotech company’s stock and file an IPR to make money when the stock plunges because investors are so wary of IPR challenges. Though King did not cite an example, there are reports that this kind of abuse has been happening. “I think that should be criminal,” King said.

A major consensus was reached on the subject of the “innovation tax,” or the funneling of money away from the USPTO as a result of sequestration measures. When prompted by Senator Gary Peters (D-MI), all members of the witness panel agreed that Congress should put a law in place mandating that user fee resources remain in the patent office. “Congress, we need to act on this, no one disagrees with this,” said Peters.

However, the same level of consensus couldn’t be found on the issue of which piece of legislation reform was best for the U.S. patent system. The majority favored the STRONG Patents Act, which they said would create the kind of framework necessary for handling abusive behaviors without affecting the legitimate rights of patent owners. Still, Tim Molino of the Software Alliance argued in favor of the Innovation Act, saying it was too early to deem certain post-grant review activities stemming from that act as abusive.

Overall, it seems the Senate Small Business Committee is united in its aim to curb abusive behaviors within the patent system without doing any unintentional harm to innovators. Gene Quinn and Steve Brachmann of IP Watchdog suggest that “if there will be patent reform in this Congress, it will be more modest and at least attempt at being innovator friendly.”

Source: IP Watchdog

Posted under: Tech Transfer e-News

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