Patent Reform

Modified on October 22, 2013

A patent is an exclusive legal right to own and market an invention or improvement for a limited period of time, in exchange for public disclosure of the invention. The U.S. Constitution grants Congress authority to award patents; specific patent laws are contained in Title 35 of the United States Code, which establishes the U.S. Patent and Trademark Office (USPTO) and sets forth the process and standards for obtaining a U.S. patent. Throughout the history of the country, patent law has been periodically amended as the needs of innovative industries in the U.S. have changed. Today patents affect not only the manufacturing and chemical industries, but agriculture, biotechnology, finance, consumer electronics, and software. Critics of the current U.S. patent system have argued that there are too many patents covering too many different subjects; that many patents are of questionable validity; and that patents are too often abused by aggressive litigants. Proponents of the current system argue that strong patent rights are essential to sustained innovation and that weakening patent rights in the U.S. will harm the industries that rely heavily on patent system.

These issues arise in discussions of patent reform
  • How to measure the costs and benefits of the patent system to companies, consumers, and the economy as a whole.
  • How the patent system and proposed changes affects small firms, individual inventors, universities, and scientific researchers.
  • Whether patent reform should target systemic improvement, or focus on those areas where the most patents are likely to be litigated. 
  • Whether granting patents in the areas of finance, software, and biotechnology has been helpful or harmful to innovation, and whether the patentability of some types of inventions should be limited.
  • Whether clearer guidelines that accommodate the advances in technology since the laws were written might improve the patent system by making it easier to identify if something qualifies as patentable.
  • If it would improve the system to change to the rules for litigating patent disputes, such as evidentiary rules or the presumption of validity.  
  • Whether remedies for patent infringement, including the rules for awarding injunctions and damages, are appropriately calibrated.
  • Whether changes in funding, management, or technology at the USPTO would improve patent throughput or quality. 
  • How proposed reforms would affect sectors where patents are seen to be helpful, like pharmaceuticals, as compared to those where patents are seen as detrimental, like software.
  • If granting too many patents results in “thickets” that stifle real-world innovation.
  • Whether firms that own patents without actually producing patented products, sometimes tagged “patent trolls,” should be treated differently in court or by Congress.
  • Whether the creation of the Federal Circuit Court of Appeals in the 1980s resulted in a pro-patent bias in court decisions or reduced the quality of decisions; and, if so, how to address this.
  • The extent to which patent law in the United States should be harmonized with patent laws of other countries.

TAP Academics researching patent reform include
Robert Barr of the Berkeley Center for Law & Technology is a former patent counsel with Cisco Systems and has testified often on patent reform.

John Duffy of George Washington University Law School holds degrees in physics and law, and writes widely about patent reform and the Federal Circuit Court of Appeals.

Scott Kieff of George Washington University Law School writes about the economic impact of patent reform.

Mark Lemley of Stanford Law School has authored many works about the patent system and patent reform at the patent office and in the courts.

“Those court decisions didn't tell us how to calculate damages. They told us how not to calculate damages.” Quoted in Reuters2/2/2011

Josh Lerner of Harvard Business School writes on a broad range of topics relating to patents, several focused on business method patents.

James Bessen of Boston University School of Law has written many works relating to empirical analyses of software patenting and litigation over such patents.

Jonathan Levin of Stanford University has written about changes to patent procedures that might improve the United States patent system.

Polk Wagner of Pennsylvania Law School writes about patent reform and courts.

These sources are a good place to start in understanding patent reform issues: Polk Wagner’s paper “Patent Portfolios” examines why large firms hold so many low-value patents. TAP scholar Emerson Tiller and coauthor John R. Allison look at the link between prior art and patent quality in their study, “The Business Method Patent Myth.” “What to do About Bad Patents” by Mark Lemley, Doug Lichtman, and Bhaven N. Sampat support procedural changes to the patent system and other reforms. Lemley and Lichtman also support more aggressive review by courts in “Rethinking Patent Law’s Presumption of Validity.” Jonathan Levin’s article “Benefits and Costs of an Opposition Process” warns that opposition would have some drawbacks, but might be beneficial.  Scott Kieff warns of problems of uncertainty associated with post-grant oppositions in “Economic Perils of U.S. Patent Reform: Flexibility's Achilles Heel” and other works. Along with coauthor Henry Smith, Kieff suggests reforms that would support certainty in “How Not to Invent a Patent Crisis.”


Recent Developments
On September 16, 2011, the Leahy-Smith America Invents Act (AIA) was signed into law, marking the biggest change in U.S. patent law since the 1952 Patents Act. The final and most important phase of AIA implementation occurred on March 16, 2013, which converted the U.S. patent system from a first-to-invent system to a first-inventor-to-file system.

In May 2013, House Judiciary Committee Chairman Bob Goodlatte (R-Va.), released a discussion draft of legislation aimed at curbing patent litigation abuse. A second draft of the patent bill was created in September 2013. It includes new transparency measures that would require companies suing for patent infringement to disclose all entities with a right to the patent; limit the kinds of documents that firms could force their opponents to produce during a trial; and, suggests changes to how patent infringement actions are conducted. Representative Goodlatte’s second discussion draft also includes some proposals to improve or correct the recently enacted America Invents Act.

Key Legislation
The Patent Abuse Reduction Act of 2013 (S. 1013), which was assigned to a congressional committee in May 2013, adds procedural requirements for patent infringement suits.

Referred to a congressional committee in February 2013, the Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013 (H.R. 845) provides, in part, for the recovery of patent litigation costs.

In 2011, the Leahy-Smith America Invents Act was passed by Congress and signed into law. It provides new patent guidelines and regulations.

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