The United States is facing weakened US IP rights which will impact high-tech innovation. America’s high-tech industries have benefited from a robust system of intellectual property (IP) rights. This has led the US to become a global leader in software, biotechnology and artificial intelligence. Due to a series of Supreme Court decisions starting eleven years ago, US IP rights have been weakened resulting in investors no longer interested in high-tech industries. It is important to recognize that patent eligibility isn’t just about technological advancement. Patent eligibility also fosters scientific collaboration and the dissemination of knowledge through patent publications. Before one Supreme Court decision, patent eligibility of gene-related innovations led to effective knowledge flows. This resulted in researchers licensing new technologies for additional study and development, as well as for commercialization. The Court’s ruling disrupted all of that, as life-sciences companies became hesitant to share findings out of fear that their discoveries could be copied and exploited.
That case was Association for Molecular Pathology v. Myriad Genetics. In 2013, the Court ruled that Myriad’s work to isolate human genes outside the body for therapeutic use was ineligible for patent protection. The ruling weakened biotechnology companies’ incentive to invest in gene therapies. With this ruling, life-sciences companies have become hesitant to share findings fearing their discoveries could be copied and exploited. Fortunately, a bill recently introduced in Congress – the Patent Eligibility Restoration Act would explain which technologies are and are not patent eligible. This ensures that complex diagnostic tests, gene therapies, and path-breaking software will once again be assured of protection. Experts believe the Patent Eligibility Restoration Act would strengthen the US IP rights. In addition, it would reform the US IP system, protect innovators, and shore up our ability to compete with geopolitical rivals. Here is an opinion piece we found of interest relating to how Congressional legislation could reform the U.S. patent system in order to strengthen US IP rights.
The US patent system is weakened. New Congressional legislation could fix it
In an opinion piece “The US patent system is weakened. New Congressional legislation could fix it” for IAM Media, Paul Michel, retired judge, believes the US patent system is weakened, but thinks new Congressional legislation could fix it. For 35 years, patent policy has been his focus, spending over two decades adjudicating major intellectual property disputes as a judge on the US Court of Appeals for the Federal Circuit. In the 13 years since the end of my judicial career, Michel has remained a consultant on numerous other high-profile cases.
Now he is an advocate for upgrading America’s patent system, in particular, correcting defects at the Patent Trial and Appeal Board (PTAB). The PTAB is a special tribunal that was created by the 2011 America Invents Act (AIA). The PTAB usually decides patent validity challenges through inter partes reviews (IPR). Because IPR applies lower standards for striking down patents than challenges in federal court, the PTAB invalidates patents much more frequently than the federal judiciary. Michel argues that this has destabilized the entire patent system resulting in inventors and their financial investors losing confidence in our patent system, resulting in research and development (R&D) investments and commercialization efforts to dwindle. This has resulted in weakening US IP rights. According to Michel, US venture capital firms are increasingly moving their technology investments into safer domestic sectors such as entertainment, or into the foreign industries of rivals like China. He points out that patents issued abroad are often more reliably protected than those granted in the United States. He strongly urges for US patent reform in order to strengthen US IP rights.
Many in Congress are concerned that China is beginning to surpass the United States in the race for dominance in emerging technologies, such as artificial intelligence, telecommunications, and biotech. In fact, a recent study from the Australian Policy Institute concluded that China has already reached or surpassed the United States in 37 of 44 crucial 21st-century technologies. As a result, several urgent patent reform bills have been introduced. One such bill is the Patent Eligibility Reform Act (PERA), which seeks to restore patent eligibility standards to their pre-2010 state. Between 2010 and 2014, the Supreme Court issued four decisions that fundamentally altered those standards which has created uncertainty that deterred tech investment from venture capitalists and established companies alike. These cases barred medical diagnostics and other vital inventions from patent eligibility, thus weakening US IP rights. Judges at every level of the court system have urged the Supreme Court to revise these harmful rulings. Yet despite receiving more than 60 relevant cases since 2014, it declined to revisit the US patent reform issue. Read more from IAM Media.
Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.
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