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'''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 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 paid==Prize System for Inventions==
'''SThe current patent system allows companies to file for the right to exclude if they have a novel, non-obvious invention. The 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.1137: Protecting American Talent and Entrepreneurship (PATENT) Act (2015)''' [httpshttp://www.congressbbc.govcom/billnews/114thworld-congress/senateus-canada-bill/1137 34331761 (CongressBBC)]*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 is established to replace Critics of the interference proceeding currently employed by the USPTO**The purpose is to determine whether a claimed invention in an earlier filed application was derived from the later filed application*Transitions from First to Invent current patent system to system where priority is given to first inventor to file a patent application*Patent Office itself can rule on egregious claims, throwing them out before defendants are forced to go through the pain also believe it does not incentivize enough research and expense of development for drugs that benefit society as a full trial whole. [http://wwwarticles.wiredeconomictimes.indiatimes.com/2012-05-28/11news/ff31877151_1_drug-stevenprices-levyintellectual-theproperty-patent-problem/innovation (Economic Times)]
===Failed Legislation===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.
'''HAlthough 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.R.845: The Shield (Saving High-Tech Innovators From Egregious Legal Disputes) Act''' [https://www.govtrackPrivate investors, such as the Bill and Melinda Gates Foundation, offer similar prize systems for pharmaceuticals discoveries.us/congress/bills/113/hr845]*Introduced in 2013However, but was not enacted*Requires an unsuccessful plaintiff in an infringement suit if private investment has proven to pay be effective, why does the defendant’s legal fees *Effort government need to dissuade frivolous patent lawsuitsintervene?
[[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
*[[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]]
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:1) Opt-in systems 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 auction3) 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 ===Drafts 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'''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 awarded, incentive to commercialize the drug is reduced since there is no patent system. One potential solution is to defer prize payment until there has been a certain degree of commercialization. '''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. 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. ==Patent Pools== Patent 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.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)] Patent pools are useful when new products are based on multiple existing patents or on one invention with patents on many of Future Legislationits components. [http://www.theglobalipcenter.com/sites/default/files/reports/documents/Prizes__Patent_Pools.pdf (GIPC)] ===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)] 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)]
