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Strengthening the Patent System to Promote Innovation, Competition and Growth
The Coalition for Patent Fairness believes that strong patent protection is a pillar of America's unparalleled
economic success and competitiveness in the global marketplace. But comprehensive patent reform legislation
is urgently needed to modernize and strengthen the U.S. patent system � a system that over the past 20 years
has failed to maintain high patent quality and the speedy resolution of disputes. Modernization is essential to
maximize innovation, stimulate competition, spur U.S. job growth, improve consumer welfare and increase U.S.
global competitiveness.
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Why is patent reform urgently needed?
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Modernizing our patent system is needed to maximize innovation, global competitiveness
and growth.
- Companies, both large and small, are being forced to shift their resources toward legal costs
and away from new innovations and creating jobs.
- Engineers are spending too much time thinking about patent law issues rather than focusing
on good science, new products and imaginative solutions.
In today's system, consumers are harmed by hidden "innovation taxes."
- Elements of our patent law create uncertainty and undue risk for innovating companies,
deterring them from developing new products and entering new markets.
- Consumers are shouldering mounting costs created by risks and uncertainty.
The patent system must be modernized to keep pace with the 21st century global economy.
- Today's complex technologies and global economy present new
challenges that the patent system must evolve to address.
- As the number of patent applications skyrockets, the overburdened patent office issues a large
number of patents that do not undergo a high-quality examination but are then used in litigation.
For example, RIM, maker of the Blackberry, settled a case for $612 million based on patents that
PTO examiners later ruled invalid.
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A broad and growing group of institutions and experts on innovation support patent reform.
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- Federal Trade Commission - "A questionable patent
can raise costs and prevent competition and innovation that would
otherwise benefit consumers."
2003 FTC Report
- National Academy of Sciences - The patent system shows
"areas of strain, inefficiency, excessive cost on the one
hand and inadequate resources on the other hand that need to be
addressed now."
2004 NAS Report
- The U.S. Supreme Court has taken a large number of patent
cases in the past two terms. Each of the court's decisions has
been consistent with proponents of patent reform who have urged
the court to rebalance patent law to safeguard patent owners while
ensuring patent rights are not abused. Justices have described
one current standard on patents as "gobbledygook" and
"worse than meaningless."
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The editorial boards from a broad range of prominent publications have called for patent reform
legislation, including The Wall Street Journal, New York Times and Los Angeles Times.
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Legal scholars and economists are calling for comprehensive patent reform.
- The current patent system is "a distraction from innovation
rather than a source of incentive." From Innovation and its
Discontents by Professor Adam Jaffe (Brandeis University) and
Professor Josh Lerner (Harvard University).
- "The burdens of the U.S. system stand in sharp contrast
with the more balanced systems of major competitors." From
Reforming U.S. Patent Policy by Professor Keith
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Comprehensive and balanced patent reform should:
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Balance apportionment
of damages. The standard for calculating damages should be based
on the fair share of the patent's contribution to the value of a product,
and not on the value of a whole product that has many other components.
Establish fair standards for punitive damages. Awarding punitive,
triple damages for "willful" patent infringement should
be reserved for cases of egregious conduct, as required by the U.S.
Supreme Court for virtually all other punitive damages.
Restrict forum shopping. Cases should be brought in courts
with some reasonable connection to the case without "gaming the
system" to find the court with the highest success rate. Limit
international liability for domestic infringement. Current interpretations
of patent law create a double-standard that puts companies conducting
research and development in the U.S. at a disadvantage vis-a-vis their
foreign competitors. The system should level the playing field and
encourage U.S. research and development spending by limiting damages
awarded in U.S. courts to claims of infringement within the U.S.
Improve patent quality. The system should promote quality patents by providing a meaningful second
chance for the experts at the PTO to review potentially problematic patents in a timely manner, and
should promote sharing of information with the PTO to improve the process and increase innovation.
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To download this fact sheet, click here.
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