Patent Law Practice Center

House Bill Would Exempt PTO from Sequestration

On Friday, June 28, 2013, three members of the House of Representatives from Northern California submitted a bill called the Patents and Trademarks Encourage New Technology (PATENT) Jobs Act. The purpose of the legislation is to exempt the United States Patent and Trademark Office from sequestration budget cuts and to allow the USPTO full access to the collected user fees.

The text of the bill is not long. The main provisions contained in Section 1 of the bill under the title “Termination of Sequestration in Fiscal Year 2013 for the Patent and Trademark Office,” says:

“Notwithstanding the presidential order issued on March 1, 2013, under section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901a), on and after the date of the enactment of this Act, the budgetary resources sequestered under such order with respect to the United States Patent and Trademark Office shall be available for obligation for the same purpose and in the same manner as if such order had not been issued. The other section of the bill, Section 2, would exempt the USPTO from sequestration budget cuts for fiscal years 2014 through 2021.”

(Pictured: Rep. Zoe Lofgren)

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The Cost of NPE Litigation

Written by James Bessen, Boston University School of Law, and Research on Innovation, and Michael J. Meurer, Boston University School of Law.

The America Invents Act requires the GAO to “conduct a study of the consequences of litigation by non-practicing entities… and assess [t]he economic impact of such litigation on the economy of the United States ….” Although we found it hard to get very excited about the smorgasbord of patent reforms bundled together in the AIA, this provision made us smile, and feel a little bit hopeful. Perhaps this signals a growing taste on the part of Congress for evidence over anecdote as the basis for patent policy-making. We’ve recently conducted two empirical studies of NPE patent litigation which we hope will prove useful to the GAO and other policy-makers.

One study, The Direct Costs from NPE Disputes, estimates the costs of NPE assertions based on a survey of defendant firms. We find that the aggregate accrued payments for outside counsel, licenses, and other direct payments to resolve patent disputes are large and growing rapidly; they totaled $29 billion in 2011, up from $6.5 billion in 2005.

The other study, The Private and Social Costs of Patent Trolls, estimates the cost of NPE litigation based on stock market reaction to the filing of lawsuits. We find that the filing of NPE patent lawsuits is associated with an $80 billion average annual loss of share value for defendant firms over the years 2006-2010. The higher costs in the second study are not surprising because rational investors take account of the direct costs enumerated above and also indirect costs such as business disruptions arising because researchers’ and managers’ attention is diverted from productive activity to litigation related issues, delays in product development and new product introductions caused by litigation concerns, and costs arising from litigation worries that spill over to suppliers and customers.

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Patent Reform Update: Senate Eyes September Enactment For Patent Reform

Scott McKeown, Partner at Oblon Spivak and Practice Center Contributor, sent in this article discussing the status of the pending patent reform legislation.

Debt Ceiling Raised, Job Bills On Deck

With debt ceiling armageddon now averted in the 11th hour (depending upon your perspective), Congress has turned its attention to election season addressing the economy. As previously discussed, the patent reform legislation has long been touted as a “no cost economic stimulus” that will create jobs.

While there are differences with H.R. 1249 and S.23, most notably concerns over fee diversion, the Senate has indicated a willingness to accept the House bill.

Today, Senate Majority Leader Harry Reid (D-Nev.) has identified patent reform as the first jobs bill to be taken up in the Fall term. To ensure quick enactment Senator Reid has indicated he will file cloture today (to remove the “hold”) so that the Senate can take up the bill immediately when the Senate convenes in September. (more…)

Exclusive Interview With Senator Birch Bayh

The following was sent in by Gene Quinn, of IPWatchdog and Practice Center Contributor.

On October 12, 2010, I had the honor of interviewing retired United States Senator Birch Bayh at his office at Venable LLP.  Senator Bayh was the primary architect of the landmark Bayh-Dole Act, which gave Universities the ability to own the patent rights to the inventions made.  The 30th Anniversary of passage in Congress is rapidly approaching, which provided the backdrop for our discussion.

Those familiar with Bayh-Dole and government funded research in generaly know that the United States has for years funded research at Universities.  Prior to the enactment of Bayh-Dole, however,  it was virtually impossible for private enterprises to license the rights to patents obtained through federally funded research. Thus, society was funding the research and the innovations were simply being withheld from the public due to the existence of too much red tape. Bayh-Dole changed everything, and has been described as the “the most inspired piece of legislation to be enacted in America” since the end of World War II. (more…)