WASHINGTON, DC – The Innovation Alliance, a coalition of companies seeking to enhance America’s innovation environment by improving the quality of patents and protecting the integrity of the U.S. patent system, today applauded the release of a new study that details the negative impact on the U.S. economy that would result from enactment of patent legislation similar to that considered in the last Congress.

The new study: “Problems to be Expected from Expanded Administrative Challenges to U.S. Patents,” is authored by Scott Shane, Ph.D., Professor of Economics at Case Western Reserve University.  It was commissioned by the Manufacturing Alliance on Patent Policy.

Dr. Shane’s analysis concludes that expanding the ability for administrative challenges by adopting a “litigation-like mechanism for third party-initiated post grant review and expand the existing inter partes reexamination process,” would likely have several adverse effects, including:

1.    Increasing the length of patent pendency
2.    Creating uncertainty about patent validity
3.    Decreasing the disclosure of knowledge necessary for innovation
4.    Increasing the costs of achieving patent validation
5.    Reducing investment in R&D
6.    Hindering efforts of U.S. universities to transfer their inventions to the private sector
7.    Increasing strategic patenting behavior by large, established firms

Moreover, the proposed legislation will not have many of the beneficial effects the
proponents of the “Patent Reform Act” claim it will have. In particular, the proposed legislation:

1. Will not improve patent quality
2. Will not reduce the cost of patent litigation
3. Will not speed the determination of patent validity.

“While anecdotal evidence has driven much of the patent ‘reform’ debate, the factual case outlining problems with the current ‘Patent Reform Act’ continues to grow,” said Brian Pomper, executive director of the Innovation Alliance.  “Significant problems with both the Senate and House versions of the patent legislation remain unresolved.  We hope Congress will give full consideration to the facts on post-grant review as presented by Dr. Shane, and that a true consensus bill can be achieved.”

For a copy of the study, visit www.innovationalliance.org.