Innovation Policy

United States Patent and Trademark Office

The United States Patent and Trademark Office is the organization within the United States government that examines and grants patents and trademarks. Established under the Department of Commerce on July 19, 1952[1] by 35 U.S.C. §1[2], the USPTO is intended to fulfill the mandate in Article I, Section 8, Clause 8 of the United States Constitution "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."[3]. Since 1790, the USPTO has issued more than 6.5 million patents[4]. The agency's main offices reside in Alexandria, Virginia, with several satellite offices around the country.

Current Issues Facing the Patent System

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." (WIPO) Generally, patent pools cover mature and complex technologies that require complementary patents to develop compatible products and services. (WIPO) Patent pools are useful when new products are based on multiple existing patents or on one invention with patents on many of its components. (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. (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. (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. (WIPO)

Risks

Patent pools have many flaws, which may explain why they have been used so infrequently. (GIPC)

Elimination of Competition Opponents criticize patent pools for the potential of anti-competitive behavior and collusion. According to the World Intellectual Property Organization, "a patent pool may be regarded as a cartel." (WIPO) Patent pools potentially create a way for companies to share competitively sensitive information, such as pricing, marketing strategies, or R&D information among its members." (WIPO)

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 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 thicket'." (DOJ)

Patent Trolls

Patent Trolls are an innovation bogeymen, with numerous research articles and legislation addressing ways to curb troll activity. Patent Trolls, also known as Patent Assertion Entities (PAEs), generate revenue through suing or threatening to sue businesses that infringe on patents. Experts dispute terms for such corporations, labeling them as either Patent Assertion Entities (PAEs) or Non-Practicing Entities (NPEs). There is no widely agreed upon definition of 'Patent Troll', because it is often used interchangeably with the terms Patent Assertion Entities and Non-Practicing Entities, whereas we make a distinction between these three terms. For our study, we define Patent Trolls as a 'person or entity that attempts to enforce patent rights against supposed infringement far beyond the patent's actual value'[5]. Their asked damages are far beyond the market value of the patent. This is a tactic used to scare small businesses in the initial demand letter, when pressing them to pay the fee to license the patent.

Hypothesis: Patent trolls will generally push for settlements and jury trials.

In all of the cases eDekka filed in 2015, each one asked for trial by jury. However, another company that is considered a big patent troll, Oberalis does not file for trial by jury.

In cases that involve educational institutions (PAEs/NPEs but not patent trolls), the educational institution doesn't ask for a jury trial. In fact, the company being sued responds to the complaint with a jury demand. Some examples of this:

• Wisconsin Alumni Research Foundation v. Apple Inc
• Trustees of Boston University v. Everlight Electronics Co
• The Regents of the University of California v. Micro Therapeutics Inc. et al
• Cambridge University Press et al v. Patton et al