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'''H*[[Innovation Act]]*[[Protecting American Talent and Entrepreneurship (PATENT) Act|PATENT Act]]*[[Targeting Rogue and Opaque Letters (TROL) Act|TROL Act]]*[[Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act|STRONG Patents Act]]*[[Demand Letter Transparency Act]]*[[Innovation Protection Act]] ====Legislation Considered in Previous Congressional Sessions==== *[[Leahy Smith America Invents Act]]*[[Prize Fund for HIV/AIDS Act]]*[[Medical Innovation Prize Fund Act]]*[[The Shield Act]]*[[Patent Fee Integrity Act]] ===Drafts of Future Legislation=== *[[Innovation Promotion Act]] ==Prize System for Inventions== The current patent system allows companies to file for the right to exclude if they have a novel, non-obvious invention.RThe right to exclude creates a temporary monopoly for a certain product, which leads to higher product costs for the consumer. One example of a patent leading to exorbitantly high prices would be Daraprim, a drug produced by Turing Pharmaceuticals. Martin Shkreli, the CEO of Turing Pharmaceuticals, led the charge to increase the price of Daraprim from $13.50 to $750 per pill.9[http: //www.bbc.com/news/world-us-canada-34331761 (BBC)] Critics of the current patent system also believe it does not incentivize enough research and development for drugs that benefit society as a whole. [http://articles.economictimes.indiatimes.com/2012-05-28/news/31877151_1_drug-prices-intellectual-property-innovation (Economic Times)] Because of such abuses of patent protections, economists and legislators have advocated for a prize system (see [[Medical Innovation Prize Fund Act (2015]])''' instead of a patent system for pharmaceutical drugs. [https://www.congresswashingtonpost.govcom/billnational/114thhealth-congressscience/houseradical-bill-seeks-to-reduce-cost-of-aids-drugs-by-awarding-prizes-instead-of-patents/2012/05/9 19/gIQAEGfabU_story.html (CongressWashington Post)]*Heightened pleading requirements: must show how each limitation 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 each asserted claim in each asserted patent a prize system is found within each *Presumption of attorney fees: encourages judges the ability to make target research towards a party pay attorney fees if lawsuit or claim is deemed frivolous*Transparency of ownership: requires plaintiffs specific problem. With prize money as the incentive, research companies are more likely to disclose devote time and resources towards the identified issue. In addition, the owner of prize system lowers barriers to entry; nontraditional parties are encouraged to participate. Although the patent in question so prize system idea sounds promising for individuals requiring medication without high reservation price, the identity issue of sustained government funding for such endeavors hurts this proposal. Private investors, such as the real parties behind Bill and Melinda Gates Foundation, offer similar prize systems for pharmaceuticals discoveries. However, if private investment has proven to be effective, why does the litigation is cleargovernment need to intervene? **Will ensure Legislators have proposed bills that patent trolls cannot hide behind provide for prize systems for a web small class of shell companies to avoid accountability drugs (see [[Prize Fund for bringing frivolous litigationHIV/AIDS Act]]).*Discovery limitsPrize systems could take many different forms: limit discovery 1) Opt-in litigation until after a claim construction rulingsystems where the government pays at least the monopoly profits that the patent holder would expect to receive2) System where patents are exchanged for compensation through an auction**Aimed 3) Offer cash subsidy to consumers who value the patented product more than the marginal cost but cannot afford the patented product at reducing costa monopoly price
'''H.R.1896: Demand Letter Transparency Act of 2015''' [https://www.congress.gov/bill/114th-congress/house-bill/1896 (Congress)]*If an entity sends more than 20 demand letters to ===Problems & Considerations Surrounding the USPTO within a year, each demand letter must follow certain rules and requirements**Must include disclosure with specific details regarding the case, such as exactly what patents have been infringed upon, the related parties, etc*Permits a recipient of a demand letter to file a petition with the USPTO if it believes that disclosure or patent letter information requirements have not been met**USPTO will notify the patent owner that the patent will be voided unless a fee is paidPrize System===
'''SNo 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.1137: Protecting American Talent and Entrepreneurship (PATENT) Act (2015)''' There are several factors that need to be considered in creating a prize system [httpshttp://www.congressbu.govedu/billlaw/114thjournals-congressarchive/scitech/volume131/senate-billdocuments/1137 wei_web.pdf (CongressBU)]*Pleading and early disclosure: must identify each claim of each patent allegedly infringed and which products or processes are infringing*Discovery limits: requires a court to stay expensive discovery pending resolution of preliminary motions*Fees and recovery: provides that reasonable attorney fees will be awarded if the court finds that the non-prevailing party was not objectively reasonable*Disclosure of patent ownership: requires patent holders to disclose to the PTO whenever there is an assignment of interest in the patent that results in a change of ultimate parent entity*Small business provisions: directs PTO to develop educational resources for businesses targeted by patent suits and to create a list of pending patent cases on its website
'''H.R.1249: Leahy Smith America Invents Act (2011)''' [http://www.uspto.gov/aia_implementation/bills-112hr1249enr.pdf]*A derivation proceeding negative aspect of the patent system is established to replace the interference proceeding currently employed by controversy and dispute that follows patent distribution of benefits. We can expect that there will also be challengers regarding the USPTO**The purpose is to determine whether a claimed invention in an earlier filed application was derived from recipient of prize payments, thus the later filed application*Transitions from First to Invent patent prize system has to system where priority is given specify how to first inventor to file resolve disputes, and also develop a patent application*Patent Office itself can rule on egregious claims, throwing them out before defendants are forced thorough screening mechanism to go through confirm the pain and expense reported benefits of a full trial [http://www.wiredthe invented drug.com/2012/11/ff-steven-levy-the-patent-problem/]
'''HPatent pools are agreements between "two or more patent owners to license one or more of their patents to one another or to third parties." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.Rpdf (WIPO)] Generally, patent pools cover mature and complex technologies that require complementary patents to develop compatible products and services.845[http: The Shield //www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (Saving High-Tech Innovators From Egregious Legal DisputesWIPO) Act''' ] Patent pools are useful when new products are based on multiple existing patents or on one invention with patents on many of its components. [httpshttp://www.govtracktheglobalipcenter.uscom/congresssites/billsdefault/113files/hr845reports/documents/Prizes__Patent_Pools.pdf (GIPC)]*Introduced in 2013, but was not enacted*Requires an unsuccessful plaintiff in an infringement suit to pay the defendant’s legal fees *Effort to dissuade frivolous patent lawsuits
===Drafts Companies can also reduce the amount spent on litigation by settling disputes with the creation of Future Legislation===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)]
'''[[Innovation Promotion Act]]'''===Risks===
==Prize System for Inventions==Patent pools have many flaws, which may explain why they have been used so infrequently. [http://www.theglobalipcenter.com/sites/default/files/reports/documents/Prizes__Patent_Pools.pdf (GIPC)]
The current '''Elimination of Competition''' Opponents criticize patent system allows companies to file pools for the right to exclude if they have a novel, nonpotential of anti-obvious inventioncompetitive behavior and collusion. The right According to exclude creates the World Intellectual Property Organization, "a temporary monopoly for patent pool may be regarded as a certain product, which leads to higher product costs for the consumercartel." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report. One example of pdf (WIPO)] Patent pools potentially create a patent leading way for companies to exorbitantly high prices would be Daraprimshare competitively sensitive information, a drug produced by Turing Pharmaceuticals. Martin Shkrelisuch as pricing, the CEO of Turing Pharmaceuticalsmarketing strategies, led the charge to increase the price of Daraprim from $13.50 to $750 per pillor R&D information among its members. " [http://www.bbcwipo.comint/export/sites/newswww/worldip-us-canada-34331761competition/en/studies/patent_pools_report.pdf (WIPO)]
Because of such abuses of '''Licensing Practices''' If a patent protectionspool restricts its members from licensing its patents independently, economists it lowers the incentive to produce alternatives and legislators have advocated inflates the costs of goods or technology for a prize system instead consumers. The Department of Justice and Federal Trade Commission state that restrictions on licensing may create "a barrier to entry if existing relationships make it harder for 'new firms to come in and overcome the patent system for pharmaceutical drugsthicket'." [httpshttp://www.washingtonpostjustice.comgov/nationalsites/health-sciencedefault/radical-bill-seeks-to-reduce-cost-of-aids-drugs-by-awarding-prizes-instead-of-patentsfiles/atr/legacy/20122007/0507/1911/gIQAEGfabU_story222655.htmlpdf (DOJ)] 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.
→About
==About==
<onlyinclude>[[Patent Reform|Patent reform]] has recently emerged as an important issue in the [[Small Business |small business]] space.The current patent system in the United States is facing a fair amount criticism on multiple fronts. Skeptics have argued that the current system is broken as it allows the presence of entities called 'patent trolls'. Trolls manipulate small businesses and extort money through patent litigation. Metrics regarding the prevalence of patent trolls are unclear. Several important pieces of legislation have been proposed to combat these reported patent trolls, as well as a "Prize System for Invention", which rewards innovative companies with monetary prizes instead of patents.</onlyinclude>
==Problems with Current Patent System==
*Many patents are approved because [[United States Patent and Trademark Office]] examiners don’t have time or resources to search all the relevant references**The current patent backlog, as of January 2016, is 561,585. [http://www.uspto.gov/dashboards/patents/main.dashxml (USPTO)]**Total Pendency, time between patent filing and patent action, is 26.1 months, as of January 2016. [http://www.uspto.gov/corda/dashboards/patents/main.dashxml?CTNAVID=1004 (USPTO)]***Total Pendency goal time is 20 months by FY2019. [http://www.uspto.gov/corda/dashboards/patents/main.dashxml?CTNAVID=1004 (USPTO)]
* “The past three decades of wanton patent-granting have created a disastrous environment for innovation. Today it’s practically impossible to build anything without violating a patent of some kind—and risking a multimillion-dollar lawsuit for your troubles.” [http://www.wired.com/2012/11/ff-steven-levy-the-patent-problem/ (Wired)]
*Technology industry has too many overly broad patents, leading to incredibly silly patent litigation cases
===Legislation===
'''H.R.2045: Targeting Rogue and Opaque Letters (TROL) Act (2015)Valuation Problems''' [https://wwwWhat 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.congressPrize payments that are too low won’t provide enough incentive, while payments that are too high may incur resource duplication costs.gov/bill/114th-congress/house-bill/2045 (Congress)]*Requires demand letters The prize payment amount also has to be individually tailored to include specific details about the person with benefit of the drug. People suggest the rights value of the patent, parent companiespayment be dependent on the ‘social value’ of a drug, contact information, and information on but how the recipient is infringing the patent*Establishes that sending demand letters that misrepresent patent rights is an unfair or deceptive act or practice under the FTC Act social value determined? Will a distinction be made between medically necessary drug inventions and allows the FTC and State Attorneys General to fine violatorslifestyle improvement drugs (e.g. acne medication)?
'''S.632: Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act (2015)Timing of Prize Payments''' [https://wwwThe 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 awarded, incentive to commercialize the drug is reduced since there is no patent system.congressOne potential solution is to defer prize payment until there has been a certain degree of commercialization.gov/bill/114th-congress/senate-bill/632 (Congress)]
'''Administrative Problems'''
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.
===Failed Legislation=Patent Pools==
===Benefits===
Ideally, companies are able to reduce costs during product development by using patent pools to share intellectual property assets. Patent pools would be able to increase efficiency and positively affect competition and innovation. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] In a situation in which two companies own different IP assets that are not enough to create specific products, these companies would be blocking each other's patents and preventing the introduction of an innovative product or service to the market. Patent pools deals with these inefficiencies by organizing complementary IP assets under one contract. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]
