As one of the nation’s leading research institutions and an invaluable resource for scientists whose innovations better the human condition, Indiana University relies on a robust patent system to protect such work.
With such a system in place, it allows IU and other universities to license these patented works to business and industry, which in turn bring such innovations to market. To move our economy forward, our nation counts on this relationship to run smoothly. More than half of the basic research done in the United States — about 60 percent of which is federally funded — occurs at universities and nonprofit research institutions. When innovative products reach market, jobs are created, local economies are bolstered and our nation becomes more globally competitive as a technology leader.
To address problems and abuses in patent litigation, mainly caused by a small number of patent holders, Congress has proposed changing key portions of U.S. patent law through House Resolution 9, otherwise known as the Innovation Act. However, such changes – in the eyes of IU and 144 other universities – are so broad that they threaten to weaken the nation’s patent system. In turn, this would significantly hamper the flow of cutting-edge advances from the minds and labs of our brightest researchers to companies that can bring them into everyday use.
Part of the problem centers on fee-shifting proposals that would require courts to award attorneys’ fees and costs to the winner in a patent case, plus the potential waiver of fee-shifting based on vague or subjective criteria. That increases the financial risk for universities and other patent holders and the effects are two-fold: First, it would discourage parties without extensive legal resources from defending patents. Second, it would deter potential licensees and venture capitalists from investing in university patents, which would reduce the number of innovative discoveries that reach market.
H.R. 9 also proposes provisions known as “involuntary joinder.” That could force universities and inventors to pay for the damages and actions of third parties over which they had no control. In some cases, this could devastate technology transfer operations such as those carried out by the Indiana University Research and Technology Corp.
For these reasons, IU and 144 fellow institutions – most of them members of the Association of American Universities, the Association of Public and Land-Grant Universities, or both – recently sent a joint letter to the House and Senate Judiciary Committees that seeks more “targeted, measured and carefully calibrated” patent legislation.
Our nation’s universities, along with technology transfer organizations such as IURTC, are eager to work with Congress to address patent issues that pose legitimate problems. However, in its current form the Innovation Act goes “well beyond” what is actually needed to address abuses that hinder university-based innovation and the economic growth that it generates.