The US Patent System Knocked Out of Top Ten

US Patent and Trademark Office

by Intellectual Property Attorney Bill Honaker, the IP Guy

The annual U.S. Chamber International IP Index is fresh off the presses. The United States ranked 12th, behind Singapore, France, Germany, Ireland, Japan, Netherlands, South Korea, Spain, Sweden, Switzerland, and the UK. The scores were close, Singapore the leader scored a 7.75, the others above the US a 7.5.  The US came in at 7.25.

The lower scores are a result of patentability standards and patent opposition procedures in the United States.

While the U.S. remains at the top of the 2018 Index rankings, innovators and creators face a challenging environment for protecting their IP under current U.S. law. . . U.S. patentability standards and patent opposition procedures continue to create uncertainty for rightsholders.

But is the US Patent system really that bad?

A review of the underlying criteria used in the Index, suggests it isn’t as bad as the headlines will lead one to believe. The low scores for the US patent system seem to relate to two specific technologies, and recent changes to the patent system and recent Supreme Court decisions directly affecting those technologies.

Why did the US drop off?

In the patent category, the US scored poorly on patentability standards and patent opposition procedures, but were perfect on everything else. The patent category was one of 8 different categories and it has only 8 criteria. (The Index measured 8 different categories with 40 different criteria, patents being one of the criteria.)

Category 1: Patents, Related Rights, and Limitations

1 Patent term of protection 1.0
2 Patentability requirements 0.75
3 Patentability of computer-implemented inventions (CIIs) 1.0
4 Pharmaceutical-related patent enforcement and resolution mechanism 1.0
5 Legislative criteria and active use of compulsory licensing of patented products and technologies 1.0
6 Patent term restoration for pharmaceutical products 1.0
7 Membership in Patent Prosecution Highways (PPHs) 1.0
8 Patent opposition 0.5

It seems that the patent category was biased toward pharmaceutical and computer related technologies. These technologies are referenced in the report as driving economies of countries and they appear in 3 of the 8 criteria. The low scores for patentability standards and patent oppositions are biased towards these two invention types. Arguably, making the total number of criteria for these technologies 5 of 8. Also, the reasons given for the lower ratings are directly related to pharmaceutical and computer related technologies.

As the report indicates, the U.S. has dropped its ranking in successive editions of the Index. This change is primarily driven by relative weakness in patentability requirements and patent opposition (indicators 2 and 8). For the former, the patentability of basic biotech inventions was compromised by the Supreme Court decisions. . . In 2017, interpretation of the recent Supreme Court decisions in Myriad, Mayo, and Alice . . . by lower courts and guidance from the USPTO remained inconsistent and difficult to apply. There is considerable uncertainty for innovators and the legal community, as well as an overly cautious and restrictive approach to determining eligibility for patentable subject matter in areas such as biotech, business method, and computer-implemented inventions. This seriously undermines the longstanding world-class innovation environment in the U.S. and threatens the nation’s global competitiveness.

Conclusion

There is no question that the US Patent system is going through unprecedented change. Recent US Supreme Court decisions address what can be patented. Congress through the America Invents Act added the ability to challenge an issued patent in an inter parties proceeding (IPR). An IPR is less costly and quicker than a trial. With both of these, accused infringers were able to successfully challenge many issued patents through the patent office rather than the Courts.

Many argue that these changes have strengthened our patent system by making it easier to challenge patents and defend against patent trolls. As someone who has devoted his career to representing innovators, a strong patent system is critical, but an efficient way to challenge patents is also important. Although applying the Supreme Court’s decisions have created questions and the IPR proceedings have some issues, they are being worked out by the courts and the USPTO.

Overall, the system is strong and one of the best in the world, even the best . . . if you ask me.

 

Bill Honaker, The IP Guy

About the Author:

Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.

To get answers to your questions click here to schedule a time to talk, email Bill@IPGuy.com, or give him a call at 248-318-7015.

 

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