Saturday, March 07, 2015

US academic organizations back Coons patent reform bill over Goodlatte bill

In a post titled

US universities back new bill to curb patent trolls
, ChemistryWorld (of the Royal Society) points out that
US academic societies are backing the Coons patent reform bill, not the Goodlatte bill.

Groups backing the Coons bill include the Association of American Universities, the US Association of Public and Land-Grant Universities, and the US Biotechnology Industry Organization.

Text includes: Last month, more than 140 universities warned congressional leaders that Goodlatte’s bill would interrupt the flow of discoveries from academia to industry by making it harder and more costly for universities to defend their patent rights.

Within the "140" letter, the universities made clear what troubles them about the Goodlatte bill:

Two such proposals –mandatory fee-shifting and involuntary joinder–
are especially troubling to the university community
because they would make the legitimate defense of patent rights
excessively risky and thus weaken the university technology transfer process,
which is an essential part of our country’s innovation and entrepreneurial ecosystem.


The fee-shifting proposals would require
courts to award attorneys’ fees and costs to the
winning party in patent cases,
with a possible waiver of fee-shifting
based on vague, subjective criteria.
The prospect of substantially increased financial risk
would discourage universities and other
patent holders lacking extensive litigation resources
from legitimately defending their patents.

IPBiz notes that Boston University (the location of Bessen and Meurer) is among the 140 signatories to the letter. MIT, CalTech, and the University of Chicago also signed. Stanford is not a signatory. Yale signed, but Harvard did not.

IPBiz notes that this rather clear opposition to the Goodlatte bill is NOT in harmony with the letter of 51 university professors, discussed for example at IAM in the post A letter to Congress on patent reform from 51 IP academics is powerful, but omits many key points . In the IAM post, Joff Wild raises issues with the "empirical evidence" underlying the letter of the 51 university professors, which evidence arises mainly from work of Bessen and Meurer:

Again, a number of serious doubts have been expressed about the research undertaken by Bessen and Meurer, while we have pointed out possible problems with the work of Feldman and Tucker. I could be wrong here, and I apologise if I am, but as far as I am aware there was no extensive, in-depth, pre-publication peer review of all the research referenced by the academics in the letter; neither have a cross-section of third parties been afforded the opportunity to take a close look at relevant data points or at how surveys were put together. Surely, research only becomes credible evidence once it has been subjected to detailed scrutiny and its authors have satisfactorily answered criticisms made of them by others working in the field. For something else that the letter fails to mention is that a number of IP academics would profoundly disagree with the conclusions the signatories have reached.

The "51 letter" is more about trumpeting certain academic research and less about "why" fee-shifting is a good idea for patent reform:

We write to respond to lobbyists and others who claim there is little empirical evidence available to assess the performance of the American patent system. In fact, a large and increasing body of evidence indicates that the net effect of patent litigation is to raise the cost of innovation and inhibit technological progress, subverting the very purpose of the patent system.


The preponderant economic picture these studies present is that patent litigation now imposes substantial costs, particularly on small and innovative firms, and that these costs have tended overall to reduce R&D, venture capital investment, and firm startups.


Startups and venture-backed firms, especially, report significant operational impacts from PAE lawsuits in survey-based studies. An econometric analysis finds that the more R&D a firm performs, the more likely it is to be hit with a patent lawsuit, all else equal. Another study associates lawsuits from PAEs with a decline of billions of dollars of venture capital investment; another found that extensive lawsuits caused small firms to sharply reduce R&D spending; and yet another 2 found that costly lawsuits caused publicly listed defendant firms to substantially curtail R&D spending.

The "51 letter" is from the perspective of patent - infringement defendants, but the "140 letter" is from the perspective
of patentees trying to enforce patent rights. The "fee shifting" issue relates to the presumption of "who pays" at the end of a patent litigation. The Goodlatte bill says presumptively the loser pays; the Coons bill leaves things the way they are: each side pays one's own costs except for exceptional cases, where shifting occurs.

Neither letter mentioned that most patentees ultimately lose in court, so the impact of fee shifting would be to dampen
patentee enthusiasm for litigation, as the 140 letter suggests.

link to Royal Society post:


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