Mar. 16, 2021

Bloomberg Law: Covid-19 Vaccine Highlights the Need for Balanced Patent Policy by David Kappos and Jonathan Barnett

For more than a decade, almost every branch of the federal government has taken steps to restrain what has been perceived to be an “explosion” of patent issuance and litigation. The results have been palpable.

A patent owner that brings suit against an infringer must now often fund multi-venue proceedings in federal district court, the Patent Trial and Appeals Board (PTAB) and, in some cases, the International Trade Commission. Expansive judicial understandings of the “abstract idea” and “law of nature” exclusions mean that patents covering software-enabled or medical diagnostic inventions operate under a cloud of potential invalidity.

Even if successful in defending validity and showing infringement, increasingly large percentages of patent owners are likely to fall into judicially created categories for which injunctive relief is practically unavailable.

This shift toward a weak-IP trajectory has rested on widespread views that:

• patent litigation is widely brought on nuisance grounds by “patent trolls”,
• the U.S. Patent and Trademark Office (USPTO) regularly issues patents for trivial inventions, and
• the proliferation of patents generates litigation and transaction costs that often result in innovation roadblocks.

While these views were supportable to some extent a generation or more ago, they have since come to lack evidence and policymakers who continued acting to restrict patents failed to consider the adverse effects on innovation and investment that have now emerged in patent-dependent technology markets.

A once axiomatic guiding light has been forgotten: The costs attributable to a robust patent system must always be balanced against the gains arising from the role that patents play in attracting investment in R&D and the commercialization efforts that convert R&D into new, innovative products and services.

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