By addressing patent system, next Congress will do Wisconsin a favor
The nation’s “sex, lies, and videotapes” election year has left many voters shaking their heads over a process that has produced more heat than light.
It has also obscured real economic questions that deserve more than a prime-time shouting match.
Will Obamacare be scrapped or recast? Will interest rates climb and endanger the recovery? What is the future of free trade if both major candidates oppose the Trans Pacific Partnership? Those questions and more have largely gone unanswered as Election Day nears.
Another topic that’s barely a blip on the political radar screen is the future of the U.S. patent system, long a wellspring of American innovation but increasingly under pressure after more than 225 years of success stories.
To be fair, the average voter may not be clamoring to hear what Donald Trump or Hillary Clinton think about patent reform because it’s a wonky topic … even for wonks. They should care, however, about the United States maintaining a competitive edge in a world where patent infringements, nuisance legal actions, and stolen intellectual property is a threat at home and abroad.
That’s particularly true in Wisconsin, which has a larger stake in a healthy patent system than many states.
Safeguards provided by the U.S. patent system have helped inventors produce and protect about 9 million patents since 1790. Keeping that innovation engine oiled and fueled should be an economic priority for federal and state policymakers alike.
When Congress reconvenes in January, it is likely to reconsider legislation some say is designed to reform the patent system — and that others insist will harm it. Those bills are an extension of the 2011 debate over the America Invents Act, which put the U.S. system on similar footing with “first to file” patent systems in other nations but failed to fix chronic underfunding of the nation’s Patent and Trademark Office.
There will also be debate over patent “trolls,” slang for entities that own patents they aren’t using to further innovation or to manufacture a product but to run what amounts to a legal extortion game.
Holding patents that are usually vague, trolls send “demand letters” to companies accusing them of patent infringement. Some companies pay a fee to make such claims go away; others choose to fight. Either choice costs money and time.
Patent reform bills in both the House and Senate target trolls, but some believe those bills are too broad and may actually punish universities that produce vast amounts of intellectual property.
Sometimes, big companies infringe on academic patents. A court ruled that was the case with Apple for using a UW–Madison innovation, patented through the Wisconsin Alumni Research Foundation, to speed the processing time of several versions of the iPhone and iPad. Because WARF has sufficiently deep pockets to engage in a legal fight with a company such as Apple, it was awarded $234 million by a jury.
“Unfortunately, over the past decade, we’ve seen a significant amount of changes … that have really combined to weaken patent rights in this country,” said Laurie Self, a vice president of Qualcomm, in a recent visit to Wisconsin. Self is a leader in the Innovation Alliance, which is casting a wary eye on some proposed fixes.
Some bills in Congress would “fundamentally reduce incentives to invest in R&D” or make it harder for organizations such as WARF to pursue legitimate cases of patent infringement, Self said.
Companies produce more patents than universities, but the output of intellectual property by Wisconsin colleges and universities is significant.
WARF acquired 161 new patents last year, according to the National Academy of Inventors and the Intellectual Property Owners Association. That’s more than any other Big Ten university, Harvard, or Johns Hopkins. Only a handful of universities, including MIT and Stanford, produced more patents than UW–Madison.
The framework provided by U.S. patent law means organizations such as WARF can support research and development on R&D campuses, recycling a portion of revenues from licensing agreements to keep the pipeline of ideas filled.
It was reported Thursday that WARF has returned $85 million in revenues to the UW–Madison this fiscal year alone. Over time, it has provided $2.3 billion in cumulative direct grants to the university, more than $400 million in patenting, licensing, and commercialization support, and $300 million to faculty inventors.
A growing number of patents are being won by the UW–Milwaukee Research Foundation and the WiSys Technology Foundation, which handles disclosures from other campuses in Wisconsin.
Because patents can lead to economic activity and even company startups, Wisconsin has a major stake in the health of the patent system. It wasn’t a campaign topic, but it will become a source of debate once Congress sits down for business next year.
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