The Manufacturers Alliance on Patent Policy (MAPP), which last month published a study that showed that Patent Reform Legislation on Damages May Hurt Patents and the Economy, wrote a letter to President Obama yesterday urging him to oppose patent reform legislation such as that introduced in the 110th Congress.
MAPP is a group of 130 manufacturing companies that includes Dow Corning, DuPont, Monsanto, PepsiCo, and Texas Instruments. While the companies represent diverse product lines, the group does not include pharmaceutical companies.
In the letter to President Obama, MAPP argues that patent reform legislation that passed the House of Representatives in 2007 would be harmful to competitiveness, investment, and employment in the manufacturing sector by weakening patent protection.
The letter seeks to rebut a number of perceived justifications for patent reform. First, MAPP argues that there has not been an explosion in patent litigation. In 1993, 1.45% of granted patents were litigated, while in 2007 lawsuits were filed on 1.48% of granted patents. There has also not been a substantial increase in damage awards. Adjusted for inflation, the median patent damage award was $3.9 million from 1995-2000 and $3.8 million from 2001-2007.
The letter notes that there has been an increase in the number of patent applications filed in recent years. MAPP argues that this is a good thing as it demonstrates increased innovation. Reform is needed at the PTO to help them deal with the growing number of applications, rather than a weakening of patent protection for issued patents.
Next, MAPP focuses on the top priority in the legislation for patent reformers proposed in the 110th Congress: reduction of damages for patent infringement. Patent reformers have been portraying infringers as innocent victims who get stuck with huge damage awards. In reality, damages are only awarded when a court has found a patent valid and unlawfully used by the infringer. MAPP also challenges the premise that damage awards are excessive, arguing instead that they are exactly as they should be, for the purpose of deterring infringement and reimbursing patent holders for loss of property. Excessive awards are handled by existing law.
The letter notes that the courts have been very busy making changes to patent law that limit the power of patents. The effects of many of these changes are not yet known. Making further changes to limit patents would tilt the balance too far in favor of infringers at this time.
Next, MAPP addresses another another justification for patent reform: poor patent quality. MAPP argues that this is no justification for reforming the post-grant patent system; instead, reform is needed at the PTO. The PTO problems include granting bad patents and a pendency that is too long. Many other entities have made proposals for improving the PTO. MAPP urges Congress to work with these groups to implement their suggestions.
As I noted yesterday, it seems that it will be difficult to reach a consensus on patent reform among the various constiuencies. It may simply come down to which group has the best lobbyists and the loudest voice.
