Patent News

Apr. 3, 2014

Intellectual Asset Management (IAM): US industry leviathans unite to make the case for a strong patent system, by Richard Lloyd

This article originally appeared in Intellectual Asset Management (IAM) on April 3, 2014.

A group of seven bluechip American companies with former USPTO head David Kappos as a senior adviser, have formed a new coalition, the Partnership for American Innovation, aimed at recalibrating attempts in Congress to reform the US patent system. In a strongly worded statement the Coalition asserted: “Companies like those in the PAI support a strong, balanced system and are working together to make sure the conversation is driven by facts, not rhetoric, and reason rather than emotion.”

The statement added that the coalition is committed to three principles. They are:

  • The American economy is best served by a strong patent system that protects high-quality innovation in all fields of technology
  • It is critical to our global economy that IP is respected by all participants in the system
  • The USPTO must be properly funded to efficiently and effectively process patent applications and issue only high-quality patents

The seven companies that make up the PAI – Apple, Du Pont, Ford, GE, IBM, Microsoft and Pfizer – represent a broad cross-section of corporate America and the presence of Kappos, head of the PTO from 2009 to 2013 and now a partner at law firm Cravath Swaine & Moore, adds a further layer of gravitas to the new group. It’s also notable that Apple and Microsoft, in particular, are among the most popular targets of NPE litigation.

Speaking to the IAM blog Kappos stressed that the group was not against legislation but favoured changes that do not undermine the US’s strong patent system. “We’re pro-smart reform that’s calibrated and sensible and that doesn’t amount to a rush to judgment,” he said.

Kappos also highlighted what he saw as a growing emotional backlash against the IP system in Congress and in the media which is “blaming the patent system for being out of control”. Having been approached a few months ago Kappos said he had no hesitation in signing up to the PAI.

The coalition has formed as legislation to overhaul the patent system currently sits before the Senate Judiciary Committee. After the Innovation Act sailed through the House of Representatives with bipartisan support at the end of last year, those that are opposed to far-reaching changes to the patent laws have slowly started to organise and voice their concerns. The proposed Bill was devised to curtail frivolous litigation from “patent trolls” but there are growing concerns that it will undermine the rights of all US patent holders.

Yesterday a broad group including pharma giants Astra Zeneca, Eli Lily and GSK, consumer product companies Johnson & Johnson and Procter & Gamble, and representative bodies such as the American Intellectual Property Law Association, BIO and the Innovation Alliance, wrote to Senators Leahy and Grassley, the Chairman and Ranking Member of the Senate Judiciary Committee respectively, to express their concerns at the scope of the proposed legislation. “As it stands many of the provisions assume that every patent holder is a patent troll,” the letter stated. “Drafting legislation in this way seriously weakens the ability of every patent holder to enforce a patent.” Last week the National Venture Capital Association also wrote to Leahy and Grassley to voice similar worries.