The true crisis in our patent system is the dire state of Section 101 jurisprudence, the area of law determining what is and what is not eligible for patent protection. For nearly 150 years, Section 101 of the U.S. Patent Act was interpreted to allow inventions to be patented across broad categories and subject matters. These patents incentivized American R&D and innovation and led to countless technological and medical breakthroughs.
Over the last 12 years, the U.S. patent system largely has become a compulsory licensing system, and increasingly so. This obviously has ramifications for all patent owners. And during this time period, Congress also passed the America Invents Act, which created what’s known as the Patent Trial and Appeal Board (PTAB), which has made it more easy to invalidate patents in the United States. As it turns out, 90% of patents that actually get to a final decision at the PTAB are found to have a mistake.
China’s intellectual property office received a record number of 1.54 million patent applications in 2018, making it the biggest filer and accounting for 46.4 per cent of total patent filings globally as the country pushes ahead with a self-reliance drive in core technology.
The first problem with the arguments presented is the idea that patents are a form of government subsidy. The panelists from Engine and Niskanen repeatedly referred to patents as nothing more than a subsidy. Patents aren’t subsidies. Subsidies are grants the government gives to private companies, while patents more closely resemble contracts. They’re not gifts from the government but exchanges in which both parties provide value.
Inventors like Thomas Edison and Nikola Tesla obtained patents to protect their many inventions, which in turn grew the U.S. economy. Today their inventions would easily be dismissed by courts as not even eligible for patenting. The lightbulb and alternating current generators would be characterized as either abstract, a law of nature or a building block of technology. Modern critics would minimize the magnitude of their inventions by saying that these great inventors simply had a good idea and told the world to apply it.
The Stronger Patents Act helps move the patent system back toward inventors by clarifying the rules around an open-ended administrative patent court that Congress created in 2011. Since the creation of the new administrative court, the administrative boondoggle has been used by infringers, crony interests, and Big Tech to help stifle innovation and harm inventors.
Far more inventions could qualify for patents in the US if a reform bill making its way through the Senate becomes law. The changes would not only increase the disconnect between European and American rules on what can be patented. They also have the potential to stifle innovation and create greater uncertainty for companies that want to protect their intellectual property globally, experts warn.
Since our country’s founding, the U.S. patent system has been one of the unsung heroes of America’s success story. Patents are based on a simple concept: that American inventors, entrepreneurs and companies whose hard work and expertise lead to a new invention deserve to reap the benefits of their work for a limited time.
The U.S. is losing its advantage to China and other countries when it comes to innovations related to artificial intelligence, blockchain and other key technology, according to an analysis of patent filings over the past decade. While American inventors still command the largest portion of the nation’s patents, the percentage is dropping in the high-tech fields, according to a yearlong study conducted by the law firm Kilpatrick Townsend & Stockton LLP and researchers at GreyB Services Pte.
There is broad support in the United States for faster economic growth--a goal that ultimately depends on boosting labor productivity. In the long run, that requires more innovation, a big component of which comes from private research and development (R&D). But what, if anything, can countries do to increase domestic innovation?