Intellectual Property

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The Future of IP Series
Intellectual Property Institute October 29,
2009
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Is the Patent System Under Attack?
Pressures on the Patent System

• Backlogs at the Major Offices
• Public Outcry of Poor Quality Patents
• Competing Systems for Driving Innovation
• Backlash Against the IP System
• Developing Economies
• Global Challenges, e.g., Health, Climate Change.
  . .

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Challenges at the EPO USPTO

• Increasing Backlog. . . Can they get ahead of it?
• This is a Global Problem (not just EPO USPTO)
• - Cant necessarily hire their way out of it
• Filings may decrease, but not permanently
• Decreasing allowance rates compound the problem
• Possible Solutions
• Increase the fees? - Deferred examination?
• Restrict continuations? - Work-Shifting to
  Users?

Full Faith Credit Must be our Ultimate Goal
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Challenges at the EPO USPTO
Public Cry of Poor Quality Patents

• Perception vs. reality. . . What is the REAL
  issue?
• We can do more to help the patent offices
• Higher quality appls (self-regulate or be
  regulated)
• Disclosing the best prior art is a must, but. .
  .
• Inequitable Conduct is still a barrier
• More data digitization can drive greater
  efficiency
• More collaboration with the Offices (e.g.,
  peer-to-patent)
• Full faith credit must be our ultimate goal

There Arent Any Problems We Cant Fix Together
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Competing Systems to IP
Open Innovation. . . Connect Develop

• Other systems provide new options
• Different solutions for different industries
  situations
• Why cant they co-exist with a robust IP system?
• Patent quality, patent trolls, damages, etc.?
• Systemic IP issues are being addressed via. . .
• The Courts, and
• Patent Law Reform
• The IP system is evolving adapting as needed

The IP System is Still The Best Driver of
Innovation
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Reactions to IP Quality Scare

• Raising the Bar on Obviousness. . . KSR
• Challenging Patents in Court. . . Medimmune,
  Sandisk
• Patentable Subject Matter
• In re Nuijten - Electrical signals deemed not
  patentable
• In re Bilski - Managing weather risk in
  commodity trading
• In re Comiskey - Mandatory arbitration of
  legal documents
• Metabolite Method for identifying a vitamin
  deficiency
• US Patent Reform
• 1. Damages 5. Post Grant Review
• 2. Inequitable Conduct 6. Applicant
  Quality Submission
• 3. Interlocutory Appeals 7. First-to File
• 4. Venue 8. Misc. (Best Mode, Fee
  Diversion, etc.)

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Is the Patent System Under Attack?
What Does the Evidence Say?

• Courts Congress are raising the bar
• IP Rights are being questioned as never before
• Anti-IP activists are more active than ever
• Amount of anti-IP blogs has risen dramatically
• Anti-IP community has engaged the media
• Anti-IP activists are attacking new areas
• Developing countries industrial policy can make
  excellentuse of the anti-IP agenda and rhetoric

We Can Not Afford to Take The Patent System for
Granted
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The Anti-IP Activists Are Going Green
The anti-IP activists see green technology as a
new opportunity to exploit their Anti-IP
Playbook namely. .
1.
2.
3.
Demand free access to IP
Point to Intellectual Property as a Barrier
Position the problem in the context of a global
Challenge
AIDS, famine, climate change, etc.
Drugs, seeds, fuel cells
Make good on human rights commitments
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UNFCCC Agreement Challenge
The Agreement
Parties shall take all practical steps to
promote, facilitate and finance, as appropriate,
the transfer of, or access to, environmentally
sound technologies and know-how to other Parties,
particularly developing country Partiesthe
developed country Parties shall support the
development and enhancement of endogenous
capacities and technologies of developing country
Parties
The Challenge

• Developing countries seek to compel
  non-commercial transfer of clean tech. in return
  for their post-Kyoto commitments (Copenhagen,
  2009)
• Experts estimate s trillions investment needed
  to achieve low carbon future this requires
  significant innovation driven by both private
  Gov. investment
• A post-Kyoto framework must involve commitments
  from all countries without shutting down
  innovation and growth

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G77 Green Tech Transfer Proposal
The G77 developing countries are aggressively
fighting for compulsory licensing of green
technologies in exchange for climate change
commitments.
Technology Transfer Mechanism
Ownership
Privately Owned available on an affordable basis includingcompulsory licensing of patented technologies
(Govt Private) transfer government proportion on a reduced or no-cost basis
Govt Owned transfer at reduced or no-cost basis
From G-77 and China Proposal
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What is the Role of Innovation
Do We Need More Clean Innovation?
One study finds that if we were limited to
technologies available in 2005, the present value
cost of achieving stabilization at 550 ppm CO2
would be over 20 trillion greater than with
expected developments in energy efficiency,
hydrogen energy technologies, advanced
bio-energy, and wind and solar technologies
(Edmonds 2007). Other studies have found that
accelerated technology development offers the
potential to dramatically reduce the costs of
stabilization, with advanced technology scenarios
reducing the cumulative costs of stabilization by
50 or more, yielding economic benefits of
hundreds of billions to trillions of dollars
globally.
Innovation is a Critical To Curing Climate Change
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Estimated 100-Year PotentialCost Reductions
Comparative analysis of estimated cumulative
costs over the 21st century of GHG mitigation,
with and without advanced technology, across a
range of hypothesized GHG emissions constraints.
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What Can We Do About it

• Recognize the threat is real growing
• The Anti-IP community has mobilized
• Developing countries have joined forces with them
• The desire to get a deal on climate change
  could trump the need to preserve strong IP
  protection

RECOGNIZE THE THREAT
ACKNOWLEDGE THE IMPACT
The potential impact from compulsory licensing of
green technology will be sweeping broad based

• Amplify our voice by building a strong,
  cross-industry coalition (ACTI IDEA) to
  deliver OUR message
• Proving Strong IPR RD Investment Innovation
• Innovation Cost effective solutions Tech
  Diffusion

MOBILIZE AGAINST THE ANTI-IP
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US Legislative Activity
IP Amendment in Foreign Affairs Bill

• To protect American jobs, spur economic growth
  and promote a Green Economy, it shall be the
  policy of the United States that, with respect to
  the United Nations Framework Convention on
  Climate Change, the President, the Secretary of
  State and the Permanent Representative of the
  United States to the United Nations shall prevent
  any weakening of, and ensure robust compliance
  with and enforcement of existing international
  legal requirements as of the date of enactment of
  this Act for the protection of intellectual proper
  ty rights related to environmental technology,
  including wind, solar, biomass, geothermal,
  hydro, landfill gas, natural gas, marine, trash
  combustion, fuel cell, hydrogen, micro-turbine,
  nuclear, clean coal, electric battery,
  alternative fuel, alternative refueling
  infrastructure, advanced vehicle, electric grid,
  or energy efficiency-related technologies.

Larsen/Kirk Amendment Passed 432-0!!
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How is GE Reacting?

1. We agree with a high standard of patentability
2. GEs focus was already on Quality!!
3. High quality IP is in ALL our best interest
4. Filings may actually go down as a result
5. Re-examinations are on the rise
6. GE is seeking to collaborate with Patent Offices
7. Willingness to fight has gone way up
8. GE is DEFENDING the IP system globally
9. If WE dont support the system, WHO WILL?