PATENT REFORM: ESSENTIAL TO ECONOMIC GROWTH

Economic Advantages of S.23

• Innovation is the primary source of economic growth and the heart of America’s competitive advantage in the global economy. As President Obama has said, we need to unleash American innovation and out-innovate the rest of the world if we are going to reboot the American economy and create good jobs.

• An efficient patent system is critical to our ability to incentivize innovation, create new businesses and new jobs, and enable new services and products to come to market. Strong patent rights are especially vital to small and new businesses, which create 2 out of 3 American jobs, as successful inventors need to secure patent rights to access capital, hire employees, and build their companies. Put simply, patents are critical to creating new jobs, new industries, and new economic opportunities for Americans

• The patent reform bill moving forward (S. 23) is therefore vital to executing the Administration’s growth-by-innovation strategy and its passage is necessary to spurring economic growth and job creation. The USPTO is an incubator of economic growth and the patent reform bill will help create a more efficient and cost-effective patent system. It will do so by:

o Enabling the USPTO to set its fees so that it can recover the full, actual cost of the services it provides to inventors at no cost to taxpayers and without adding to the deficit. In the business, this is referred to as a good return on investment. And a fully funded USPTO will support America’s innovators – who are in so many ways the lifeblood of our economy —to move their ideas to market faster.

o Establishing greater certainty about property rights in the innovation marketplace by providing greater legal certainty about the validity and value of patent rights. This is achieved by: (a) adopting the first inventor to file standard and (b) creating an in-house post-grant review process for challenging patents that is a faster and much cheaper alternative to costly and drawn-out litigation.

o Reducing the likelihood of excessive infringement damages awarded in cases of minor infringement which essentially serve as a very large tax on innovation and an impediment business development. This is achieved by adopting the “gatekeeper” approach for judges to provide better guidance to juries about the appropriate scope of damages awarded in minor infringement cases.

o Establishing faster and more cost-effective alternatives to litigation by revamping the existing inter-partes review system that will adjudicate claims within 12 months at a fraction of the cost of litigation – and by making greater use of third party submissions in establishing prior art.

• Adopting the First Inventor to File system is a simpler, more secure & cost-effective standard that removes the false sense of security propagated by the mentality that under the current “first to invent” system a delay in filing with not affect them. The proposed system still requires (contrary to the fear of some) that you prove that you were in fact the inventor – so this is not, as some have characterized it, a matter of racing to the patent office.

• Under the FITF system, an individual and small entity inventor will be under notice that quick filing is necessary and the inventor secure greater clarity and claim his or her rights by filing in a timely way. The economic imperative that American businesses reach outside our borders to new markets requires that we ensure equitable patenting standards for US companies, regardless of size and industry, who want to do business abroad.