American Innovators for Patent Reform

American Innovators for Patent Reform (AIPR), a non-profit organization based in New York City, is a coalition of inventors, patent owners, researchers, engineers, entrepreneurs, corporate executives, patent agents and attorneys, and others involved in creating or protecting innovation and advocating for stronger patent protection^[1] in the ongoing debate on patent reform.

AIPR is opposed to the Innovation Act (H.R. 9) that was recently introduced in Congress. American Innovators for Patent Reform believes that the Innovation Act has nothing to do with "innovation," and that it is an attempt by "Big Tech" to make it riskier and more expensive for inventors, small and start-up businesses, and universities to assert their intellectual property rights.

AIPR supports full funding for the Patent Office, a 21st Century multi-tier patent system, reduced patent pendency, stronger U.S. Patents, and more vigorous patent enforcement.

Amendments and changes to patent law

Since the United States Congress passed the first Patent Act of 1790, additional amendments were passed in 1793, 1836, 1839, 1870, 1897, 1903, 1928 and 1939. A complete revision of the Patent Act took place in 1952 and is the current law of patents, although it has been amended several times, with substantive legislation in 1999 the most recent.^[2]

The Intellectual Property and Communications Omnibus Reform Act of 1999^[3] expanded patent and copyright protections to cover activity on the internet and protections for new forms of media, against cybersquatting, domain name protection for personal names and a new compulsory license for Satellite Carriers. The Ominbus Reform Act also included additional protections for U.S. patent holders, including the American Inventors Protection Act, First Inventor Defense Act, Patent Term Guarantee Act, Domestic Publication of Foreign Filed and Patent Applications Act. The Patent Reform Act of 2005, introduced into the 109th Congress, and the Patent Reform Act of 2007, introduced into the 110th Congress, were substantial rewritings of the entire Patent Act of 1952 but both failed to pass and be signed into law.

Controversy over current U.S. Patent Law and the PTO

The patent system in the U. S. had not been substantially updated by the United States Congress in 50 years, and it has also been more than 30 years since the Patent Office (PTO) updated its rules for examining patent applications and this has created a backlog of patent applications that total approximately 750,000 to one million. In addition, approximately $750 million in user fees from 1991 to 2003 was diverted from the PTO to other United States agencies as authorized by the Commerce-Justice-State Appropriations bill. As innovations and inventions have grown increasingly complex and are being created at an even more rapid pace. The patent approval process in the United States today has become inefficient and a major obstacle to the creation of a robust environment that fosters innovation and invention, important components of the American economic engine.^[4][5]

Backlog

A backlog of approximately 1 million patent applications currently exists; it takes 33 months for patent applications to be approved or rejected; for sectors like communications in which new technologies develop rapidly approval/rejection can be up to 44 months. Long delays in the patent approval/rejection process create uncertainly and stifle the availability of investment capital and the resulting innovation and creation of new products and technologies since there is risk of infringement on a patent the Patent Office eventually issues for an older invention.^[4]

Patent quality

Patent examiners at the PTO work under antiquated rules and with outdated information technology systems that handicap the entire patent review process. In addition the US patent examiner attrition rate is significantly higher than that of other patent offices. As a result of an inefficient and overwhelmed review process and administrative and budgetary problems there is a widely perceived decline in the quality of the patents approved by the PTO. Adding to the problem of patent-quality approval are overreaching patent applicants who seek to take advantage by claiming a larger array of uses for their invention than actually proven. That in turn triggers more challenges, including expensive and time-consuming court cases, which inject even more uncertainty into the patent landscape.^[6]

The Patent Reform Act of 2009

The Patent Reform Act of 2009 (S. 515)^[7][8] was introduced on March 3, 2009, in the 111th United States Congress by Senators Orrin Hatch^[9] and Patrick Leahy. On March 3, 2009 Representative John Conyers introduced a House version of the legislation, H.R. 1260 [9], and on March 17 Senator Jon Kyl introduced another bill, S. 610.^[10] The proposed legislation closely resembles previous attempts at patent law reform in the United States, including the Patent Reform Act of 2005^[11] and Patent Reform Act of 2007.^[12] Among others, proposed changes in the 2009 Senate Bill include:

• Change from First to Invent to First to File: Unlike other countries, particularly in Europe, the U. S. patent system has historically issued patents on a "First-to-Invent" basis. The proposed legislation would require the U.S. patent system to change to the “First to File” system.^[7]
• Change to limit damages: The legislation proposes to provide defendants with additional provisions to defend against patent infringement lawsuits and limit damages, including requiring infringement lawsuits be filed only in states where defendant has a physical place of business that constitutes a "substantial portion" of its operations; expands use and expediency of appeals; creates stricter criteria for "willful infringement", including the introduction of more extensive evidence; proposes stricter criteria for "reasonable royalty" and when measuring damages requires the court to conduct a strict analysis that will reflect the economic value of the patent’s “specific contribution over the prior art”; allows a "good faith" defense, if defendant believed a patent was invalid, unenforceable or not infringed when violating the patent.^[7]
• Change to Revisions to Reexamination Procedures: Ensures any party can challenge a patent's validity within 12 months of issuance. If a party - most likely the owner of a pre-existing patent - contests the patent within that time frame, the USPTO must execute discovery procedures and arrive at a decision prior to the end of that 12 months. If the USPTO finds in favor of the new patent holder, the petitioner is stopped from seeking reexamination or asserting invalidity as a defense in subsequent litigation.^[7]
• Change to Additional Post Grant Review: Within 12 months of issuance, a third party can file a cancellation petition based on any ground of invalidity (rather than simply prior art). The post grant reviews would also be conducted by the administrative patent judges.^[7]
• Change to Pre-Issuance Submissions: Permits third parties to submit timely pre-issuance information (i.e., prior art patents or publications, evidence of a prior offer for sale, etc.) relevant to the examination of the application, including a concise statement of the relevance of the submission.^[7]

Support for the Patent Form Act of 2009

A number of companies (Apple, Cisco Systems, Google, Microsoft, Oracle, Palm, SAP, among others) and several coalitions (Coalition for Patent Fairness, Business Software Alliance and The Software and Information Industry Association) support the Patent Reform Act of 2009. The proposed patent reform legislation currently before Congress is supported primarily by large software and technology companies.^[13] Supporters of the proposed legislation claim reform will help counter the increasing number of frivolous lawsuits and mitigate damages companies and individuals are forced to pay.^[14] Reform would also simplify the patent application process and bring U.S. patent law in line with patent laws of other countries, most of which operate on the "first-to-file" system.^[15]

Opposition to the Patent Reform Act of 2009

Opposition to the Patent Reform Act of 2009 comes from an array of diverse groups and industries that represent Aerospace and Defense, Agricultural companies, Biotech, Chemical and Pharmaceutical firms, Diversified Financials, Diversified Technology, Energy, Food Production, Forest & Paper Products, Health Care, Household and Personal Products, Industrial Equipment, Labor Unions, Medical Equipment and Devices, Network & Communications, Payroll Services, Research Universities, Semiconductors & Electronic Components, Small Inventors and Transportation Equipment and Venture Capitalists. Most opposition comes from the view that the proposed legislation will undermine property rights of inventors, stifle innovation and threaten American competitiveness.^[16]

Coalition Groups Against the Patent Reform Act of 2009

• The AFL-CIO
• The American Bar Association's Section of Intellectual Property Law American Innovators for Patent Reform
• Institute of Electrical and Electronics Engineers
• The Innovation Alliance
• The National Small Business Association
• The National Venture Capital Association
• Patent Office Professional Association
• The Professional Inventors Alliance
• The TPL Group
• The Union of U.S. Patent Examiners

Companies Against the Patent Reform Act of 2009

• 3M
• Caterpillar
• Eli Lilly
• General Electric
• Johnson & Johnson
• Procter & Gamble
• Texas Instruments

AIPR Opposition to The Patent Reform Act of 2009

AIPR was founded on the following viewpoints regarding patent reform:

• Patents are personal property that must be accorded the same respect and protection as any other form of property.
• The US patent system has been recognized as being responsible for the economic success of our country. As such, it must remain the driving force of innovation in the US. It is the American innovators who will pave the way for economic recovery and economic growth, who will create new industries and new jobs, and who will assure long-term leadership for the US in an increasingly competitive global economy.
• A patent is a social contract between an inventor and society, whereby the inventor is granted a limited exclusionary right, i.e., a public franchise, in exchange for disclosing his or her invention to the public. A patent is a quid-pro-quo for invention disclosure, not for its practice. Whether a patent is owned by an individual, a large corporation, a university or a small business, the geniuses behind these innovations, the source of tomorrow’s technologies, are the true heroes and they must be given a voice in any debate on patent reform.
• A strong patent provides protection for the investments required to develop and commercialize the invention.

AIPR's position on Patent Reform

American Innovators for Patent Reform opposes the Patent Reform Act of 2009 currently pending before Congress. Specifically, AIPR opposes:

1. Apportionment of damages, which is still in the House version of the bill
2. Post-Grant Opposition
3. Redefinition of Prior Art and change from the American First-to-Invent system to a First-to-File patent regime
4. Limitations on venue

AIPR proposes an alternative reform to strengthen and modernize the US patent system and to provide U.S. patentees with more robust patent rights internationally. Some of these proposals include:

1. Legislation to improve funding and operations of the U.S. Patent and Trademark Office (USPTO), including putting a statutory end to user fee diversion.
2. Aligning the basic principles of patent laws with copyright laws
3. Legislation clarifying that the equitable factors in applying the exclusive power of a patent have been considered by, and included in, the framers’ express grant of the constitutional right of all patent owners to “exclude others.” This legislation should provide all valid patent owners with an unconditional right to obtain a permanent injunction, irrespective of the owner’s business or identity.
4. Legislation to clarify what is patentable subject matter in a manner that promotes innovation.

Legislation that will require the U.S. government to seek trade agreements that remove the built-in trade barriers of foreign patent laws by securing for American inventors rights similar to those available in the U.S. for foreign inventors. This includes adoption of the 1-year “grace period” for invention disclosure and providing reduced fees for small patenting entities in foreign patent offices.

Board of directors

• Alexander Poltorak, founder and chairman, chairman and CEO of General Patent Corporation
• Lawrence J. Udell, vice president, executive director at Intellectual Property International
• Pat Choate, director of the Manufacturing Policy Project
• Jeff Ballabon, founding Partner, B2B Stratetic
• Joseph Harbaugh, Professor and Dean Emeritus, Nova Southeastern University Law Center
• Alec Schibanoff, Executive Director of AIPR and Vice President of Marketing for the GPC Group of Companies

References

1. ↑ AIPR website, “Patent Reform by American Innovators,”
2. ↑ Shubha Ghosh, E-Notes.com, “Patent Acts”
3. ↑ “Intellectual Property and Communications Omnibus Reform Act of 1999”
4. 1 2 “Patent Reform 101: Problems With the Current System,” Center for American Progress
5. ↑ Summary of U.S. Chamber of Commerce Recommendations to the Incoming Obama Administration Regarding the USPTO
6. ↑ “Patent Reform 101: An Inefficient System Slows the Innovation Economy”
7. 1 2 3 4 5 6 “Patent Reform 101: An Inefficient System Slows the Innovation Economy,”
8. ↑ .Release: “Senators Hatch, Leahy Introduce Patent Reform Act of 2009”
9. ↑ Text of “S. 515: Patent Reform Act of 2009"
10. ↑ Text of “H.R. 1260: Patent Reform Act of 2009"
11. ↑ Text of “S. 610: Patent Reform Act of 2009"
12. ↑ Text of “Patent Reform Act of 2005,”
13. ↑ Text of “Patent Reform Act of 2007,”
14. ↑ Roy Mark, eWeek, “Patent Reform Hits Congress,” March 3, 2009.
15. ↑ Diane Bartz, Reuters, "U.S. battle over patent reform headed for compromise?" March 10, 2009.
16. ↑ Patently-O-Blog, “Patent Reform: First to File,” Apr 09, 2009

• Kevin L. Kearns, AmericanEconomicAlert.org, “Opposition Mounts to Patent Reform Act of 2009,” March 18, 2009.

External links