Letter to Obama from U.S. Manufacturers Questions Rationales For Patent Reform

Earlier today, the Manufacturing Alliance on Patent Policy, representing more than 130 US manufacturing companies, sent a joint letter to President Obama voicing concerns over patent reform legislation. More specifically, the letter states that, if 2009's patent reform efforts are a repeat of 2007-08, the legislation would "harm the competitiveness, investment and employment of [the manufacturing] sector." Furthermore, the letter pointedly notes that "the prosperity of a few companies within two industries should not come at the expense of a larger group of stakeholders."

A few highlights:

• "[T]here is no explosion in patent litigation. In 1993, lawsuits were 1.45% of patents granted. In 2007, lawsuits were 1.48% of patents granted. The number fluctuates from year to year, but it has never indicated a system out of control. (Source: USPTO Annual Reports, Federal Judicial Statistics)"

• "[T]here is no explosion in patent damage awards. Adjusting for inflation, the median annual patent damages award has actually dropped slightly over the last 13 years. In constant dollars, the median was $3.9 million from 1995 through 2000, and $3.8 million from 2001 through 2007. (Source: 2008 Patent Litigation Study, PriceWaterhouseCoopers.)"

• "We view increased patent applications as a good thing, representing increased innovation that is crucial for American prosperity. It would be a terrible mistake to allow the increase in patent applications to become an excuse to undermine patent protections. Rather, Congress should take advantage of Americans’ growing desire to invent by ensuring that the U.S. Patent and Trademark Office ("USPTO") has the resources and management to handle the increased number of applications in a thorough and timely manner."

• "We encourage policy makers to reject the call for drastic changes to the law of patent damages. Reducing penalties for intellectual property theft will only encourage more of the same, which will deal a severe blow to the motivation of American inventors to create more and greater innovations in the future."

Read the entire letter here (link)

See also a related study, "The Likely Adverse Effects of an Apportionment-Centric System of Patent Damages" (link)