No consensus that broad patent ‘reform’ is necessary or helpful

Two recent op-eds published in The Hill argue that broad patent legislation—misleadingly labeled “reform”—is needed because the U.S. patent system is fundamentally broken. In the first, Timothy Lee contends that opponents “cannot with a straight face” argue that we don’t need wide-sweeping changes to our patent system. In the second, Michele Boldrin and David K. Levine maintain that there is “consensus among academic researchers” that the system is “failing.” 

Both op-eds suggest that there are no principled reasons, whether legal or economic, to object to the overhaul of the patent system included in the Innovation Act. Both op-eds are wrong. 

{mosads}Of course, the very premise that the U.S. patent system is fundamentally broken is itself suspect. A 2012 study by the U.S. Department of Commerce estimates that patent-intensive industries in 2010 accounted for 3.9 million jobs and 5.3 percent of GDP—$763 billion in value added to our national economy. Earlier this month, the U.S. Chamber of Commerce released a new study showing that the United States is the world leader in inventive activity. 

Boldrin and Levine wrongfully assert that the patent system nonetheless retards our nation’s leadership in innovation. Without providing a single citation, Boldrin and Levine paint a picture of scholarly uniformity, claiming that the “preponderant economic picture” shows “that patent litigation now imposes substantial costs[.]” In fact, the bulk of their op-ed is merely copied verbatim from a letter to Congress by “economics and legal scholars” from March of 2015. 

However, they fail to mention that just one week later another group of “economists and law professors,” including several of our colleagues, sent their own letter to Congress expressing “deep concerns with the many flawed, unreliable, or incomplete studies” that Boldrin and Levine endorse. Simply put, there is no “consensus among academic researchers” as they suggest.

The flaws in the studies relied upon by Boldrin and Levine are numerous, and many academics have cast doubts on their conclusions (for example, see here, here, here, and here). One recurring fundamental error is that they focus too much on the costs of patent litigation and not enough on the benefits of protecting patent rights and preventing infringement. Many of these studies drastically discount, or simply ignore, the clear benefits of patents. 

Indeed, a recently-released study demonstrates that owning a patent is causally linked to “help[ing] startups create jobs, grow their sales, innovate, and eventually succeed.” The authors of this study conclude that “[p]roposals for patent reform should consider these benefits of patents alongside their potential costs.” 

The fact that our patent system has been so successful should make us think twice before making even small changes, and we should be extremely wary of sweeping changes like those proposed in the Innovation Act. 

Instead, the pro-“reform” camp often mischaracterizes their efforts as limited in scope. In his op-ed, for instance, Lee argues that the legislation “narrowly targets” patent litigation, not patent rights themselves, and he accuses opponents of failing to cite specific language in the bill that would do harm. Neither claim is true. Making patent rights harder to protect in court hurts their value, reliability, and commercial function. This isn’t just a litigation issue.

We and our colleagues have explained in detail how specific provisions in the bill hurt patent rights (for example, see here and here) and how several proponents of the bill rely on junk science to make their case. Many others, including former Patent Office Director David Kappos, Rep. Marcy Kaptur (D-Ohio), and dozens of other commentators (for example, see here, here, here, here, and here) do the same. It’s unquestionably false to claim that opponents haven’t argued specifics. 

We should not make far-reaching changes to the patent system based on such a lopsided analysis. Alarmist rhetoric and questionable studies should not dictate how we structure the engine of our innovation economy. 

Pretending that opponents of the Innovation Act have nothing to say on the merits or that they are opposed by academic consensus is simply disingenuous. Moreover, many of these opponents do not resist patent legislation—they just favor truly targeted bills such as the TROL Act or the STRONG Patents Act. These bills address issues in our patent system without creating the collateral damage that has spurred small businesses, universities, venture capitalists, biopharmaceutical companies, and many others to oppose the Innovation Act. 

Unfortunately, the arguments made by Lee, Boldrin, and Levine give us nothing more than an oversimplified, one-sided look at a highly complex issue that is fundamentally important to our innovation economy.

Mossoff is director of Academic Programs and Hartline is assistant director at the Center for the Protection of Intellectual Property (CPIP) at George Mason University School of Law. CPIP is dedicated to the scholarly analysis of intellectual property rights and the technological, commercial, and creative innovation they facilitate.