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|TitleHas title=Regulatory Challenges for Innovation Policy (Blog Post)|AuthorHas author=Avesh Krishna|DeliverableHas content status=Blog PostTabled|AudienceHas graphics status=General PublicNone|PriorityHas processing notes=|Due Date=NA|Stage=DRAFT |Keywords=Patent, Reform, Acts, Patent-Troll|Primary Billing=AccMcNair01Avesh to fix and find peer editor

An ecosystem supportive The Founding Fathers had the foresight to include patents among the functions of the federal government in the constitution (Article I, Section 8). George Washington urged Congress to implement protections for innovation in his first State of the Union address resulting the third act of the first Congress: the Patent Act of 1790. The Framers’ recognition of the crucial importance of innovation to economic growth has served as the solid foundation of the free enterprise system.  This strong system of intellectual property protection needs to be updated to fulfill the Framers’ intentions. The balancing act of protecting intellectual property and preventing exploitation of those protections has proved difficult to accomplish. At either extreme, the value of patents and, in tandem, incentive to innovate, is diminished. Due to lobbying from special interest groups and large corporations, the current patent system shortsightedly addresses scapegoats rather than solving chronic issues. Patent enforcement must be competitive but also protective simultaneously support innovation and regulatedprotect intellectual property. Too much trade protection reduced competition thus hurting innovation while too many regulations hurt regulation hinders innovation by prolonging the time needed to move an idea into the market. However, a lack No protection of protection and regulations reduce intellectual property reduces the incentive to innovate by enabling copycat ideas and making it difficult to profit off on innovationhinders economic growth. ConcurrentlyPoorly designed, a poorly executed regulatory and protection system, such as making it trivial to patent ideas, can lead intrusive government regulation leads to valid innovation being blocked by frivolous legal challenges. There is little doubt as  The 2011 America Invents Act (AIA) was geared to what happens assuage concerns about patent trolls -- entities that raise revenue by enforcing patents they acquire without implementing them -- while benefiting large corporations at the extremes expense of these spectrums of protection small businesses and individual inventors. Small companies and individual inventors were forced to file earlier and competitionare unable to patent ideas if they are brought to market before patenting. Additionally, but the equilibrium necessary for a thriving innovative ecosystem has yet smaller entities that lack capital may be unable to be found. Where the United States lies on this spectrum is being continually readjusted patent ideas or enforce their patents against large corporations due to pending legislation higher costs under the provisions in the AIA. Large corporations and court caseslobbyists have hoodwinked policy makers, as well as ramifications from prior legal actions. While convincing them NPEs are the most prominent reform in recent years has been largest threat to the America Invents Actpatent system. In reality, they are but a variety of court cases working their way up the legal system may create fundamental changes in how the United States protects and regulates innovationminor threat, even for large corporations. Pending legislation, chiefly the Innovation Act and PATENT (Promoting American Talent and Entrepreneurship) Act, seek continues this unnecessary focus on fighting trolls, while doing little to ameliorate resolve other issues regarding the patent system. Both the Innovation Act, introduced by Rep. Goodlatte of Virginia, and the current PATENT act, introduced by Sen. Grassley of Iowa, fail to distinguish between Patent Assertion Entities (trolls) and NPEs, of which PAE’s are a subset. While many PAE’s are bad actors who only enforce patents to financial gain without innovating themselves, NPEs include small businesses and individual inventors who want to protect and license their intellectual property regulatory environment. The main issue these bills seek Rather than reducing the threat that PAEs pose to resolve is that of “patent trolls” or in other termssmall businesses, non-practicing entities. Proponents of these bills contend that reducing legal threats posed by NPEs will expedite innovation while opponents claim the bills broadly define non-practicing entities and such definitions unfairly benefit large established corporations while harming small onesbusinesses. NaturallyWhile this legislation may move forward in the next Congress, large tech companies support such bills while small inventors and non-practicing entities oppose these measures. Effective reform neither bill has made progress since moving out of the US patent system requires balancing the interests of all actors involved. All these parties are active innovators but excessive or insufficient regulation discourages innovation and the willingness to invest in research and developmentcommittee.

Since 2016 is an election year and patent policy is not a particularly sexy issue, we can expect little action Congress has failed to fulfill its constitutional mandate to reform protect intellectual property. In the patent system from Congress. Patent policy is not a pressing issue for most voters. With that saidresulting vacuum, many of the major reforms to patent policy has come from court decisions and the . The next major decision we can expect expected will regard likely involve the constitutionality of inter partes review, or (IPR, ) that was introduced with the American Invents Act of 2011. Inter partes review is a process enabling IPR enables third parties to challenge the validity of patents based on prior art evidence to an internal patent office board. The casePrior art is vaguely defined but can encompass any and all knowledge, products, MCM Portfolio LLC vs Hewlett-Packardprevious patents, is pending petition from or publications that demonstrate use of the claims in the Supreme Court and can be expected to be heard sometime challenged patent before the end of 2017that patent was filed. IPR has led to an increase of challenges to the validity of patents and opponents . Opponents of IPR claim it harms small companies businesses and individual inventors by decreasing intellectual property rights. IPR has made it cheaper and easier to challenge patent claimswithout increasing the number of patents being invalidated. MCM Portfolio LLC vs Hewlett-Packard, but is pending petition from the Supreme Court and can be expected to be heard sometime before the end of 2017. This case calls into question whether IPR violates Article III of the constitution and if it violates the 7th amendment. The Article III issue arises since IPR is conducted before the existence Patent Trial and Appeal Board, an administrative division of the USPTO, rather than before federal judges in court. Following from this, the 7th Amendment, which guarantees a right to trial by jury, is claimed to be violated during the IPR has not increased process as there is no trial nor jury. We can expect a steady trickle of cases attacking provisions of the American Invents Act though the number success of patents being invalidatedsuch cases cannot yet be predicted. To fulfill their constitutional obligation to protect intellectual property, Congress must act to reform the patent system. Inaction will harm small business and lead to jurists deciding matters that the Framers intended to leave to the legislature.