Study: Patent Proposal Could Be Costly
Proposed changes to the Patent and Trademark Office's post-grant review process included in a bill sponsored by Senate Judiciary Chairman Patrick Leahy would increase the patent pendency waiting period by more than 25 percent, and could add to the cost of defending patent validity by billions of dollars, according to an analysis by Case Western Reserve University economist Scott Shane. Judiciary ranking member Jeff Sessions requested that Shane examine the issue earlier this month as staffers for Leahy and Sessions continue meeting with stakeholders about the topic.
The Leahy measure, which passed his committee 15-4 in April, would adopt House-passed text from 2007 that lengthens the timeline for challenging a granted patent and strips out a "public use or sale" provision that Leahy added as a basis for challenging a patent. Specifically, Shane's research found that the length of time between patent application and issuance would increase from 32 months to 40 months and the costs of defending patent validity could rise by $2.2 billion. He also argues that the proposed changes would lead to an annual reduction of $4.4 billion in industrial R&D and would make uncertain the validity of $1.4 billion to $1.7 billion of patents issued annually.
Earlier research from Shane, which was commissioned by the Manufacturing Alliance on Patent Policy, concluded that adopting House language on how damages are calculated in patent lawsuits could lead to job loss and decreased R&D. The alliance, which also bankrolled the new report, is backed by Corning, Monsanto, DuPont and others critical of Leahy's patent reform push. A recent report by the Coalition for Patent Fairness, which supports patent overhauls and counts Cisco Systems, Apple, Dell and others as its members, found that pending legislation would create 100,000 new jobs.
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