Tuesday, March 24, 2015

Robert Nelsen and Hans Bishop suggest compromise in patent reform as to fee-shifting

The idea for a compromise on "fee-shifting" from Nelson and Bishop:

Some of the most onerous provisions of the bill–paradoxically called the Innovation Act–would create a system in which startups would need to spend tens of millions of dollars on litigation expenses defending themselves from large companies, most likely going bankrupt if they lose to the “big guy”. (...)

Some in Congress are evidently unaware that by inserting a “loser pays” requirement into our legal system, they will be sacrificing our world-leading biotech industry in the process. Let us be clear: investments in the biotech industry are based entirely on patents. Without strong patents, we cannot raise money to find cures for disease.

Why would “big tech” do this? They have a genuine concern about harassment by non-operating “patent trolls” frivolously suing them. So we have a challenge for them. If their motivation is simply to reduce trolls, and not to suppress innovation, then they should have no problem agreeing to provide small, innovative companies safe harbor from the onerous provisions in this bill. Backers should embrace carving out universities and emerging growth companies defined by Title I of the Jumpstart Our Business Startups (JOBS) Act. True patent trolls who buy their patents and cause real damage are not operating companies would still be covered under the provisions of the Innovation Act.

Small innovators are truly operating companies, not trolls, so let us give these American innovators the benefit of the doubt. There is precedent for this kind of exception. The Patent Act itself creates a safe harbor to protect drugs under clinical development from infringement litigation. Why not extend that protection to all start-ups and inventors, giving them a chance to be successful? This simple fix solves the troll problem and protects startups until they are big.


link: http://www.forbes.com/sites/matthewherper/2015/03/24/new-patent-law-would-trash-disease-cures/

New Patent Law Would Trash Disease Cures


See also IPBiz post relating to comments of Richard Epstein:



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