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=Federal The following acts have their own pages:*114, Ways & Means Committee, [[Innovation Promotion Act]]. See also https://www.congress.gov/bill/113th-congress/house-bill/2605*114, H.R.9 [[Innovation Act]]. See also [[H.R. 9: Innovation Act]]*114, S.1137 [[Protecting American Talent and Entrepreneurship (PATENT) Act]]*114, H.R.2045 [[Targeting Rogue and Opaque Letters (TROL) Act]]*114, S.632 [[Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act]]*114, H.R.1896 [[Demand Letter Transparency Act]]*114, H.R.1832 [[Innovation Protection Act]]*112, H.R.1249 [[America Invents Act]]*112, S. 1138 [[Prize Fund for HIV/AIDS Act]]*113, S. 627 and 115, S. 295 [[Medical Innovation Prize Fund Act]]*113, H.R.845 [[The Shield Act]]*113, S. 2146 [[Patent Fee Integrity Act]]*114, S.1137 [[PATENT Act]]*114, S.632 [[STRONG Patents Act]]*114, [[S. 1890: Defend Trade Commission=Secrets Act of 2016]]
==Antitrust Law==
In recent years, there has been an increase in patent reform legislation due to wide range of criticisms on current patent institutions and practices demanding stricter reform. '''[[United States Patent and Trademark Office|USPTO]]'''{{#section: In April 2016, the USPTO had an unexamined patent backlog of 549,896 and 352,573 application filings for review. The unexamined patent backlog is a record of how many [[Patent TypesUnited_States_Patent_and_Trademark_Office| UPR Patents]] are waiting for review by a patent examiner, and application filings are how many patents are being sent in for review. [http://www.uspto.gov/corda/dashboards/patents/main.dashxml?CTNAVID=1005] The USPTO reports that in 2016 the average total pendency time, the time between filing a patent application and issuing or dismissing a patent, has been 26 months. [https}}{{#section://hbr.org/2015/03/why-congress-needs-to-pass-the-innovation-act-this-timeUnited_States_Patent_and_Trademark_Office| Harvard Business Review] reports that the increase in cases being referred to lower, random courts raises the cost of processing a patent application and causes the patent system to rely on juries often without requisite technical or procedural expertise. These juries are expected to decide whether high level technology or processes satisfy the requirements for protection. '''Patent Litigation''': Critics at Wired believe that the amount of patent litigation and patent infringement claimed has created a "disastrous environment for innovation." [http://www.wired.com/2012/11/ff-steven-levy-the-patent-problem/ (Wired)] Litigation and lawsuits may result in a significant decrease in product development. In 2015, Google and Apple invested more in supporting patent purchases and litigation than in R&D.[http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?_r=0 (NYT-PW)] Additionally, "junk patents" are a source of contention as HBR suggests they lead to pointless trials. The technology industry often suffers of overly broad patents, which also may lead to pointless litigation. Amazon has successfully patented buying things with one-click in the United States, and Apply has claimed ownership of rounded-edged, rectangular-shaped communication devices on which icons are arranged in a grid with a row of persistent icons at the bottom. '''Rapidly Growing Industries''': The biotechnology industry as a whole provides new ethical challenges to the patent system and introduces new competitive threats such as me-too drugs. Me-too drugs are approved after pioneering drugs to function as substitute products [http://www.who.int/intellectualproperty/topics/ip/Me-tooDrugs_Hollis1.pdf]. Limiting the scope of discoveries that can be patented in biotechnology is an ongoing issue. The DOJ's declaration that genes may not be patented in a case dealing with Myriad Genetics and the University of Utah Research Foundation resulted in sharp public criticism in 2010. [http://www.nytimes.com/2010/11/02/health/02gene.html?_r=0] The Biotech industry along with others such as e-commerce or computer software face the challenge of overcoming overlapping patents that could result in many separate patent infringements. [http://faculty.haas.berkeley.edu/shapiro/thicket.pdf]USPTO2}}
More recentlyOpponents criticize patent pools for the potential of anti-competitive behavior and collusion, primarily with regards to substitute patents. Substitute or non-essential patents cover competing technologies that can be developed in parallel without risk of infringement [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf]. Certain patent pools have been found to share competitively sensitive information such as marketing and pricing strategies and R&D findings.[http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf] The Department of Justice and Federal Trade Commission stated that patent pools may create barriers to entry for new firms since the required patents will be inaccessible [http://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf (DOJ)] In order to address the concerns raised against patent pools, the Department of Justice (DOJ) has taken steps to standardize patent pools in order to prevent violations of antitrust laws. The DOJ requires the following characteristics for a patent pool:
===Support=== '''Efficiency''': These restrictions allow for patentees and standard setting organizations to maximize the benefits of creating patent pools. The creation of patent pools mainly benefits the owners of complementary and essential patents. Essential patents are patents required for a product or process to meet a given sector's technical standards. Cross-licensing between companies in a patent pool facilitates building upon previous technologies and increases the efficiency of innovation by organizing complementary intellectual property assets under one contract [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]. Mutually blocking patents often slow technological developments as neither party can make use of its technology without infringing on the other party's patent. By forming a patent pool, both parties can develop substitute technologies without risk of infringement. '''Cost Reduction''': Companies can also reduce the amount spent on litigation by settling disputes with the creation of patent pools. This would benefit small- and medium-sized businesses that usually cannot afford the costs of expensive litigation. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Transaction costs as well as royalties can also be lowered in a patent pool. ===Criticisms=== '''Elimination of Competition''': Opponents criticize patent pools for the potential of anti-competitive behavior and collusion, primarily with regards to substitute patents. Substitute or non-essential patents cover competing technologies that can be developed in parallel without risk of infringement [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf]. Patent pools formed between companies holding substitute patents eliminate competition in that particular technological sector. The [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf|World Intellectual Property Organization] refers to patent pools exhibiting this behavior as cartels. Certain patent pools have been found to share competetitively sensitive information such as marketing and pricing strategies and R&D findings.[http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf] For example, R&D information and developments could be shared in grant-back provisions, where companies share new or downstream technologies and innovations with members of the pool without additional fees. '''Licensing Practices''': If a patent pool restricts its members from licensing its patents independently, it lowers the incentive to produce alternatives and inflates the costs of goods or technology for consumers. The Department of Justice and Federal Trade Commission stated that patent pools may create barriers to entry for new firms since the required patents will be inaccessible [http://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf (DOJ)] Additionally, downstream products or firms may unknowingly use technology protected by a patent pool. An article published by the [http://www.nber.org/chapters/c10778.pdf|NBER] claims that these companies may then be burdened by cumulative taxes and a time holdup in production. '''Pricing''': Given agreements between patent holders to reduce royalties, there may be collusion to fix higher prices for consumers. Technology may become inaccessible to a large number of consumers, hurting the overall public good.
Patent Trolls are an innovation bogeymen. Numerous research articles and legislation have been focused on ways to curb troll activity, making patent trolls one of the most publicly denounced issues in the patent system. Experts dispute terms for such corporations, labeling them as either Patent Assertion Entities (PAEs) or Non-Practicing Entities (NPEs). PAEs are defined by the FTC as companies that earn revenue by purchasing patents and accusing companies using those patented technologies of infringement.[https://www.ftc.gov/policy/studies/patent-assertion-entities-pae-study] NPEs are firms that rely on Patent Licensing activities for revenue. [http://www.unifiedpatents.com/news/2016/5/30/2015-patent-dispute-report] Patent litigation involving NPEs in 2015 accounted for approximately 67% of cases reviewed by District Courts. The high-tech sector is highly vulnerable to NPE lawsuits as 88% of high-tech patent litigation in 2015 was related to NPEs.<ref name="unified" /> Patent Trolls generate revenue through suing or threatening to sue businesses that infringe on patents. Typically, the damages asked for by Patent Trolls are far beyond the market value of the patent in order to scare small businesses in the initial demand letter, when pressing them to pay the fee to license the patent.
==Prize System for Inventions==
Because of such abuses of patent protections, economists and legislators have advocated for a prize system (see [[Medical Innovation Prize Fund Act]]) instead of a patent system for pharmaceutical drugs. [https://www.washingtonpost.com/national/health-science/radical-bill-seeks-to-reduce-cost-of-aids-drugs-by-awarding-prizes-instead-of-patents/2012/05/19/gIQAEGfabU_story.html (Washington Post)] Under this system, companies that invent a new drug will receive a lump sum prize. The rights to the drug will then be placed in the public domain, creating generic drugs. The biggest benefit of a prize system is the ability to target research towards a specific problem. With prize money as the incentive, research companies are more likely to devote time and resources towards the identified issue. In addition, the prize system lowers barriers to entry; nontraditional parties are encouraged to participate.
Although the prize system idea sounds promising for individuals requiring medication without high reservation price, the issue of sustained government funding for such endeavors hurts this proposal. Private investors, such as the Bill and Melinda Gates Foundation, offer similar prize systems for pharmaceuticals discoveries. However, if private investment has proven to be effective, why does the government need to intervene?
Legislators have proposed bills that provide for prize systems for a small class of drugs (see [[Prize Fund for HIV/AIDS Act]]).
Prize systems could take many different forms:
# Opt-in systems where the government pays at least the monopoly profits that the patent holder would expect to receive
# System where patents are exchanged for compensation through an auction
# Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at a monopoly price
===Problems & Considerations Surrounding the Prize System===
No one knows the economic effects of prize systems; there is lack of empirical evidence supporting the benefits of a prize system over a patent system. There are several factors that need to be considered in creating a prize system [http://www.bu.edu/law/journals-archive/scitech/volume131/documents/wei_web.pdf (BU)]:
'''Valuation Problems'''
What is the criteria for awarding a prize and how much prize money is each innovative drug worth? This is one of the biggest problems in establishing a prize system. Prize payments that are too low won’t provide enough incentive, while payments that are too high may incur resource duplication costs. The prize payment amount also has to be individually tailored to the benefit of the drug. People suggest the value of the payment be dependent on the ‘social value’ of a drug, but how is that social value determined? Will a distinction be made between medically necessary drug inventions and lifestyle improvement drugs (e.g. acne medication)?
'''Timing of Prize Payments'''{{#section:The Truth Behind Patent Trolls|trolls}}The timing of the prize payment has to be timed well; if awarded too early other companies may not be incentivized to produce a drug that would’ve been higher quality than the drug that won the prize. After the prize is awardedCurrently, incentive to commercialize the drug is reduced since there is no systematic data that proves the existence of patent system. One potential solution is to defer prize payment until there has been a certain degree of commercializationtrolls and that quantifies their financial effects on companies.
'''Administrative Problems'''=[[America Invents Act]]=The MIPF creates a board of trustees that has the responsibility of awarding prize payments. Though the board of 13 members is designed to be unbiased, it is unlikely that they will not be subject to political and external pressures, leading to a distorted allocation of resources. {{#section:Leahy_Smith_America_Invents_Act|aia}}
A negative aspect of the patent system is the controversy and dispute that follows patent distribution of benefits. We can expect that there will also be challengers regarding the recipient of prize payments, thus the prize system has to specify how to resolve disputes, and also develop a thorough screening mechanism to confirm the reported benefits of the invented drug. <section begin=Patent_Reform />Proposed Patent Reform=
==Proposed Legislation==Below is a table containing brief overviews of the bills pertaining to innovation that have been passed or introduced by the 114th Congress.
*{| class="wikitable"|-! Bill! Prognosis! Sponsor!Full Title!Date Introduced!Status|-|[[Innovation S. 1890: Defend Trade Secrets Actof 2016]][https://www.govtrack.us/congress/bills/114/s1890]*|Enacted|Orrin Hatch (R-Utah)|A bill to amend chapter 90 of title 18, United States Code, to provide Federal jurisdiction for the theft of trade secrets, and for other purposes.|JUL 29, 2015|Enacted — Signed by the President on May 11, 2016|-|[[H.R. 9: Innovation Act]] [Protecting American Talent and Entrepreneurship https://www.govtrack.us/congress/bills/114/hr9]|36% | Bob Goodlatte (PATENTR-Virginia) | To amend title 35, United States Code, and the Leahy-Smith America Invents Actto make improvements and technical corrections, and for other purposes.|Feb 5, 2015|Reported by Committee on Jun 11, 2015|-|[[S. 1137: PATENT Act]][https://www.govtrack.us/congress/bills/114/s1137]|36% | Charles “Chuck” Grassley (D-Iowa)|A bill to amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections, and for other purposes.|Apr 29, 2015|Reported by Committee on Jun 4, 2015*|-|[[H.R. 2045: Targeting Rogue and Opaque Letters Act of 2015]] [https://www.govtrack.us/congress/bills/114/hr2045]|24% | Michael Burgess (TROLR-Texas) |To provide that certain bad faith communications in connection with the assertion of a United States patent are unfair or deceptive acts or practices, and for other purposes.|Apr 28, 2015|Reported by Committee on Apr 29, 2015|-|[[H.R. 1832: Innovation Protection Act]] [https://www.govtrack.us/congress/bills/114/hr1832]|5%| John Conyers Jr. (D-Michigan)|To provide for the permanent funding of the United States Patent and Trademark Office, and for other purposes.|Apr 16, 2015|Referred to Committee on Apr 16, 2015|TROL -|[[S. 632: STRONG Patents Actof 2015]][https://www.govtrack.us/congress/bills/114/s632]|4%| Chris Coons (D-Delaware)|A bill to strengthen the position of the United States as the world's leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country's economy.|Mar 3, 2015|Referred to Committee on Mar 3, 2015*|-|[[S. 926: Grace Period Restoration Act of 2015]] [Support Technology https://www.govtrack.us/congress/bills/114/s926]|4%| Tammy Baldwin (D-Wisconsin)|A bill to amend the patent law to promote basic research, to stimulate publication of scientific documents, to encourage collaboration in scientific endeavors, to improve the transfer of technology to the private sector, and Research for Our Nation’s Growth (STRONG) Patents Actother purposes.|Apr 14, 2015|Referred to Committee on Apr 14, 2015|-|STRONG [[H.R. 2370: End Anonymous Patents Act]][https://www.govtrack.us/congress/bills/114/hr2370]|0%| Theodore Deutch (D-Florida)*|To amend title 35, United States Code, to require disclosure of ownership and transfers of ownership of patents, and for other purposes.|May 15, 2015|Referred to Committee on May 15, 2015|-|[[H.R. 1896: Demand Letter Transparency Actof 2015]]*[[Innovation Protection Act]https://www.govtrack.us/congress/bills/114/hr1896]|0%| Jared Polis (D-Colorado)|To amend chapter 26 of title 35, United States Code, to require the disclosure of information related to patent ownership, and for other purposes.|Apr 20, 2015|Referred to Committee on Apr 20, 2015|}
no edit summary
=United States Patent and Trademark OfficeActs with pages={{#section:United_States_Patent_and_Trademark_Office|USPTO}}
{| {{table}}| align=Current Issues Facing "center" style="background:#f0f0f0;"|'''Bill'''| align="center" style="background:#f0f0f0;"|'''Congress'''| align="center" style="background:#f0f0f0;"|'''Sponsor'''| align="center" style="background:#f0f0f0;"|'''Committee'''| align="center" style="background:#f0f0f0;"|'''Reports'''| align="center" style="background:#f0f0f0;"|'''Last Action'''|-| [[Innovation Promotion Act|H.R.2605 - Manufacturing Innovation in America Act of 2013]]||113th Congress (2013-2014)||Rep. Schwartz, Allyson Y. [D-PA-13] (Introduced 06/28/2013)||House - Ways and Means||||06/28/2013 Referred to the House Committee on Ways and Means.|-| [[H.R. 9: Innovation Act|H.R.9 - Innovation Act]]||114th Congress (2015-2016)||Rep. Goodlatte, Bob [R-VA-6] (Introduced 02/05/2015)||House - Judiciary||H. Rept. 114-235||02/25/2016 Committee on Small Business and Entrepreneurship. Hearings held.|-| [[Protecting American Talent and Entrepreneurship (PATENT) Act|S.1137 - PATENT Act]]||114th Congress (2015-2016)||Sen. Grassley, Chuck [R-IA] (Introduced 04/29/2015)||Senate - Judiciary||||02/25/2016 Committee on Small Business and Entrepreneurship. Hearings held.|-| [[Targeting Rogue and Opaque Letters (TROL) Act|H.R.2045 - Targeting Rogue and Opaque Letters Act of 2015]]||114th Congress (2015-2016)||Rep. Burgess, Michael C. [R-TX-26] (Introduced 04/28/2015)||House - Energy and Commerce||H. Rept. 114-877||12/16/2016 Placed on the Union Calendar, Calendar No. 688.|-| [[Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act|S.632 - STRONG Patents Act of 2015]]||114th Congress (2015-2016)||Sen. Coons, Christopher A. [D-DE] (Introduced 03/03/2015)||Senate - Judiciary||||02/25/2016 Committee on Small Business and Entrepreneurship. Hearings held.|-| [[Demand Letter Transparency Act|H.R.1896 - Demand Letter Transparency Act of 2015]]||114th Congress (2015-2016)||Rep. Polis, Jared [D-CO-2] (Introduced 04/20/2015)||House - Judiciary||||05/15/2015 Referred to the Subcommittee on Courts, Intellectual Property, and the Internet.|-| [[Innovation Protection Act|H.R.1832 - Innovation Protection Act]]||114th Congress (2015-2016)||Rep. Conyers, John, Jr. [D-MI-13] (Introduced 04/16/2015)||House - Judiciary||||05/15/2015 Referred to the Subcommittee on Courts, Intellectual Property, and the Internet.|-| [[America Invents Act|H.R.1249 - Leahy-Smith America Invents Act]]||112th Congress (2011-2012)||Rep. Smith, Lamar [R-TX-21] (Introduced 03/30/2011)||House - Judiciary; Budget||H. Rept. 112-98||09/16/2011 Became Public Law No: 112-29. (TXT | PDF)|-| [[Prize Fund for HIV/AIDS Act|S.1138 - Prize Fund for HIV/AIDS Act]]||112th Congress (2011-2012)||Sen. Sanders, Bernard [I-VT] (Introduced 05/26/2011)||Senate - Health, Education, Labor, and Pensions||||05/15/2012 Committee on Health, Education, Labor, and Pensions Subcommittee on Primary Health and Aging. Hearings held. With printed Hearing: S.Hrg. 112-570.|-| [[Medical Innovation Prize Fund Act|S.495 - Medical Innovation Prize Fund Act]]||115th Congress (2017-2018) | Get alerts||Sen. Sanders, Bernard [I-VT] (Introduced 03/02/2017)||Senate - Health, Education, Labor, and Pensions||||03/02/2017 Read twice and referred to the Committee on Health, Education, Labor, and Pensions.|-| [[The Shield Act|H.R.845 - Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013]]||113th Congress (2013-2014)||Rep. DeFazio, Peter A. [D-OR-4] (Introduced 02/27/2013)||House - Judiciary||||04/08/2013 Referred to the Subcommittee on Courts, Intellectual Property, And The Internet.|-| [[Patent System=Fee Integrity Act|S.2146 - Patent Fee Integrity Act]]||113th Congress (2013-2014)||Sen. Feinstein, Dianne [D-CA] (Introduced 03/13/2014)||Senate - Judiciary||||03/13/2014 Read twice and referred to the Committee on the Judiciary.|-| [[PATENT Act|S.1137 - PATENT Act]]||114th Congress (2015-2016)||Sen. Grassley, Chuck [R-IA] (Introduced 04/29/2015)||Senate - Judiciary||||02/25/2016 Committee on Small Business and Entrepreneurship. Hearings held.|-| [[STRONG Patents Act|S.632 - STRONG Patents Act of 2015]]||114th Congress (2015-2016)||Sen. Coons, Christopher A. [D-DE] (Introduced 03/03/2015)||Senate - Judiciary||||02/25/2016 Committee on Small Business and Entrepreneurship. Hearings held.|-| [[S. 1890: Defend Trade Secrets Act of 2016|S.1890 - Defend Trade Secrets Act of 2016]]||114th Congress (2015-2016)||Sen. Hatch, Orrin G. [R-UT] (Introduced 07/29/2015)||Senate - Judiciary | House - Judiciary||S. Rept. 114-220; H. Rept. 114-529||05/11/2016 Became Public Law No: 114-153. (TXT | PDF)|-| |}
==Criticisms=United States Patent and Trademark Office=
==Patent Pools==
Patent pools are agreements between patent owners to share, or cross-license, their own patents with one another.[http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Generally, patent pools cover mature and complex technologies that require complementary patents to develop compatible products and services. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]. Complementary patents are patents that are must be used together for the development of a specific new product, and therefore, necessitate shared licensing [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)].
# Essential patents included only.
# Pricing in downstream production cannot be affected by or discussed by members of the patent pool. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf].
==Patent Trolls==
<section begin=Patent_Reform />
'''[[Innovation Act]]''':{{#section:Innovation_Act| summary}}
'''[[Protecting American Talent and Entrepreneurship (PATENT) Act]]''':{{#section:Protecting_American_Talent_and_Entrepreneurship_(PATENT)_Act| PatentAct}}
<section end=Patent_Reform />
=Patent Reform==Bills Relevant to Innovation===
==Future LegislationMarket of Ideas ==*[[Innovation Promotion Act]] ==Previously Considered Patent Reform=<section begin= *[[Leahy Smith America Invents Act]]*[[Prize Fund for HIVMarket_of_Ideas /AIDS Act]]*[[Medical Innovation Prize Fund Act]]*[[The Shield Act]]>*[[Patent Fee Integrity ActMarket of Ideas Research Notes]] <section end=Patent_Reform />
=References=
<references>
<ref name="unifiedGovTrack">[httphttps://www.unifiedpatentsgovtrack.us/congress/bills/114/hr9#] 'H.R. 9: Innovation Act', govtrack.us. </ref><ref name="innovationactsummary"> [https://judiciary.house.comgov/wp-content/newsuploads/2016/502/782015_InnovationAct3.pdf] 'The Innovation Act', ''Judiciary Committee: Chairman Bob Goodlatte'', (Washington, D.C.). </ref><ref name="PAsummary"> [https://www.judiciary.senate.gov/imo/30media/2015doc/Patents,%2004-patent29-dispute15,%20PATENT%20Act%20-report%20One%20Pager.pdf] 'The Protecting American Talent and Entrepreneurship Act (PATENT) Act: Short Summary', "Senate Committee on the Judiciary" (Washington, D.C). </ref><ref name="patentactgovtrack"> [https://www.govtrack.us/congress/bills/114/s1137] '2015 Patent Dispute ReportS.1137: PATENT Act', 'govtrack.us'Unified Patents. </ref><ref name="USPTO report"> [http://www.uspto.gov/sites/default/files/documents/USPTOFY15PAR.pdf] 'United States Patent and Trademark Office Performance and Accountability Report: Fiscal Year 2015', "United States Patent and Trademark Office",(San JoseAlexandria, CAVirginia). </ref>[[Category: Internal]][[Category:Innovation Policy]]
