Carl: Bill to target patent trolls will slow research
Michigan State University just broke ground on a cutting-edge medical research center. Set to open in 2017, the center’s 44 research teams will partner with private biopharmaceutical companies to study and develop treatments for diseases ranging from Alzheimer’s to cancer.
Unfortunately, a new proposal from Congress could shake the foundation of this program. Ironically named the “Innovation Act,” the bill would stifle innovation and cripple Michigan’s economy by weakening the patents that enable medical research. To protect such research, Michigan representatives must reject this bill.
Congress initially proposed the Innovation Act as a way to fight “patent trolls.” These trolls abuse the patent system by obtaining patents for overly broad ideas. With their patents in tow, the trolls seek out companies that make products utilizing that same general idea. They then sue those companies for “patent infringement.” Many companies find it cheaper to pay off trolls rather than fight them in court.
Congress previously tried to stop patent trolls by establishing the Patent Trial and Appeal Board (PTAB), a patent review panel that hears petitions from companies that feel a rival’s patent is too broad and therefore invalid. The board is supposed to avert the need for costly patent lawsuits.
However, the board uses weaker review standards than ordinary courts. That makes it far easier for patent challengers to overturn a patent. In fact, PTAB has ruled in favor of challengers even when district courts already validated the challenged patent. PTAB’s pro-challenger bias discourages investments in research and development, since companies know that even legitimate patents are now fair game for PTAB.
Congress ought to fix PTAB by requiring it to use the same rigorous review standards as a patent court. Instead, lawmakers’ latest attempt to target trolls will only further discourage businesses from research and development.
The Innovation Act erects barriers to filing patent infringement lawsuits, in an effort to stop patent trolls from harassing businesses with frivolous suits. But the law’s proposals don’t just target trolls — they also burden legitimate patent holders.
The bill requires inventors to file excessive amounts of paperwork to defend their patent against actual infringers. For instance, innovators must identify all the previous complaints against the patent — and note how they received this information.
Such intentionally burdensome paperwork will delay court proceedings and prevent Michigan businesses from stopping patent infringers who unfairly market knock-off products.
Delays and increased legal costs effectively make it harder to defend a patent. That will dampen innovation across Michigan, particularly in the biopharmaceutical sector. It takes over 10 years and $2.6 billion to develop a new drug, according to a Tufts University study. Inventors won’t risk such a huge investment if they’re not confident they can protect their drug patents from infringement. If firms cut back on medical research, it will delay the development of new treatments that could save or improve the lives of millions of patients.
These cutbacks would also harm Michigan’s economy. Over 23,000 Michigan patients currently participate in the state’s 1,400 active clinical trials. Such drug company-funded research contributes almost $500 million to the economy. Michigan’s biopharmaceutical industry boosts the state’s total economic output by $20 billion. And the sector supports more than 74,000 jobs.
Congress’ poorly designed attempt to curb patent trolling could devastate private industry. That’s why the American Conservative Union, one of the nation’s oldest and most influential conservative groups, is urging lawmakers to vote against the Innovation Act. The group even plans to use the coming Innovation Act vote as part of the “report card” it issues to each congressperson. Such report cards are a useful tool for Michigan voters to judge whether their elected leaders are truly standing up for local businesses.
Michigan’s lawmakers must support local innovators, biopharmaceutical workers and patients by rejecting the Innovation Act.
Amy Carl is chair of the Saginaw County Republican Party.