From the Alliance

Sep. 23, 2013

100+ Innovative American Businesses and Organizations Send Letter to Congress Opposing Expansion of America Invents Act’s “Covered Business Method Patent” Program

More than 100 businesses and organizations representing a wide range of America’s most innovative industries – including technology, communications, manufacturing, consumer products, energy, financial services, medical devices, software, pharmaceuticals and biotechnology – sent a letter to Congressional leaders this week expressing their opposition to recent legislative proposals that would expand the America Invents Act’s “covered business method patent” (CBM) program. The letter warns that such an expansion would harm American innovation, economic growth and job creation by “unnecessarily undermining the rights of patent holders.”

“The US patent system for more than 200 years has succeeded spectacularly in promoting ‘the progress of science and useful arts,’ as the Founders intended, in part because it has always provided the same incentives for all types of inventions. To expand and make permanent the CBM program would be to turn ill-advisedly and irrevocably in a new direction — discriminating against an entire class of technology innovation,” according to the letter.

The letter was delivered to Senate Judiciary Chairman Patrick Leahy (D-Vt.) and Ranking Member Chuck Grassley (R-Iowa), and House Judiciary Chairman Bob Goodlatte (R-Va.) and Ranking Member John Conyers, Jr., (D-Mich.).

Signees of the letter included: 3M, Adobe Systems, Boston Scientific, BSA – The Software Alliance, Caterpillar Inc., Cleveland Medical Devices Inc., Dolby Laboratories, The Dow Chemical Company, DuPont, Eli Lilly & Company, General Electric, IBM, Innovation Alliance, Inventors Network of the Capital Area, Johnson & Johnson, Microsoft, National Association of Manufacturers (NAM), Procter & Gamble, Qualcomm, Tessera, U.S. Business and Industry Council, and Xerox Corporation, among others.

Under Section 18 of the America Invents Act (AIA), transitional post-grant review proceedings for CBM patents allow the U.S. Patent and Trademark Office (USPTO) to take a second look at a patent after that patent’s grant or reissuance, in order to determine its validity. A CBM patent is a business method patent that relates to a “financial product or service.” Unlike regular post-grant review proceedings, which require that a proceeding must be requested no later than nine months from a patent’s grant date or reissuance date, a request for a CBM patent proceeding can be made at any time until Sept. 16, 2020 – the date the transitional program is scheduled to sunset.

During congressional consideration of the AIA, proponents of Section 18 argued that it was a necessary and temporary measure to review a very narrow class of financial-services-related patents. However, recently-introduced legislation proposes to make the transitional proceedings of Section 18 permanent and expand the definition of “covered business method patent” to include data processing patents used in any “enterprise, product, or service.” This means that any party sued for or charged with infringement can always challenge an extremely broad range of patents at the USPTO. The request for a proceeding need not be related to financial products or services and can be submitted any time over the life of the patent.

“This would have far-reaching implications, because data processing is integral to everything from cutting-edge cancer therapies to safety systems that allow cars to respond to road conditions in real time to prevent crashes. Subjecting data processing patents to the CBM program would thus create uncertainty and risk that discourage investment in any number of fields where we should be trying to spur continued innovation,” according to the letter.

“As innovators, educators, developers and US employers, we hope Congress will set aside the ideas related to expanding the CBM program as it looks to further improve our patent system,” the letter concluded.

The Innovation Alliance represents innovators, patent owners and stakeholders from a diverse range of industries that believe in the critical importance of maintaining a strong patent system that supports innovative enterprises of all sizes. Innovation Alliance members can be found in large and small communities across the country, helping to fuel the innovation pipeline and drive the 21st century economy.

Read the full letter here.


Contact: Jaime Horn, 202-827-7859