SOURCE: Licensing Executives Society

September 27, 2007 09:30 ET

Patent Reform Legislation Proposes Sweeping Changes to U.S. Patent Laws

Licensing Executives Society Raises Important Questions About the Impact on Innovation

WASHINGTON, DC--(Marketwire - September 27, 2007) - Patent reform legislation is rapidly moving through Congress, and intellectual property (IP) licensing professionals are already predicting what effect it will have on patents and licensing.

A recent snapshot survey of IP professionals conducted by the Licensing Executives Society (LES) indicates that while the U.S. patent system has fostered an innovation economy for more than 200 years, the scope of these changes raises questions about how well the patent system can sustain innovation in the 21st century.

Among the most significant changes proposed in the legislation are (1) limitations concerning damages calculations for patent infringement, (2) a limited post-grant opposition period for cancellation of recently issued patents, and (3) moving the United States from a "first to invent" rule to a "first to file" standard, harmonizing the United States policy with other regional patent systems around the world.

About 52 percent of IP professionals who responded to the survey say that limitations concerning damages calculations will inhibit innovation by reducing the penalties for infringement, while about 8 percent indicated that the limitations would promote innovation by reducing the costs of potential damages. About 40 percent indicated that the damages calculations will fairly apportion the economic value of the patented technology.

"Patent law is an extremely complicated area even though the concept of protecting innovation is a simple one and our membership is highly divided on these issues," says LES President Allen Baum, a patent attorney with Hutchison Law Group, based in Raleigh, North Carolina. "As the U.S. Senate considers this legislation, we want to make sure that the law allows IP licensing to continue its important role of commercializing inventions into products that people use every day."

The new law would also create a limited post-grant review period when individuals or organizations could challenge the validity of newly issued patents.

Fifty percent of IP professionals said this would hinder innovation by encouraging challenges of recently issue patents and increased expense. However, 41 percent said this would encourage innovation because it would improve the quality of patents.

LES plans to engage its 6,000 members across the United States and Canada to help inform Congress about the critical role that the patent system plays in U.S. economic development and competitiveness.

"This has been a year of unprecedented change in the patent and licensing arena, because the U.S. Supreme Court has issued several rulings affecting the strength of patents and the U.S. Patent and Trademark Office is also implementing new rules starting in November," Baum said. "Our mission is simply to ensure that American businesses and consumers continue to benefit from the licensing of inventions that improve lives and keep our economy strong."

Contact Information

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    Al Rickard
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    Editors: Interviews with Allen Baum are available.