Patent News

Jun. 10, 2014

Forbes Opinion: The Patent System Is A Boon — Not A Drain — To The American Economy, by David Kappos

This post originally appeared in Forbes on June 10, 2014.

There is a near daily publication of opinion pieces taking aim at our country’s patent system. Many share these authors’ concerns with frivolous patent cases that waste valuable resources and cause some to question the legitimacy of the patent system. But rhetoric on the subject of patent litigation threatens to overshadow the facts, urging rash actions that risk upsetting the delicate balance of IP. The demonization of IP has gotten far out of hand, and these editorials unfortunately contribute to the unhelpful trend.

Frivolous litigation generally is a problem that’s worthy of attention, but we must keep its impact in perspective and recall that this phenomenon is not unique to patent cases. Critics of IP point to an increase in patent lawsuits — which grew from 1,200 in 1991 to over 5,000 in 2012 — as justifying wholesale changes to the patent system. The argument is convenient in its simplicity, but in the race for an anti-IP conclusion its proponents miss the actual cause underlying the numerical increase: legal reform. The rapid increase in the number of patent lawsuits filed was a side effect of the passage in 2011 of the America Invents Act which created a new requirement that patent holders file separate suits against each defendant where they previously filed one case against multiple defendants. This created the impression of a litigation explosion. But a recent study analyzing 2,521 patent infringement cases in 2010 and 5,195 in 2012 reveals that nearly all of the increase resulted from the changes effected by the AIA. Ironically, the very same parties who called for these changes are now decrying the increase in lawsuits that are a byproduct of the reforms they themselves demanded.