On Oct. 19, UC Law SF Professor Robin Feldman testified before Congress in support of greater patent transparency. “To put it simply, shell games and hide-and-seek rarely make for an efficiently functioning market,” Feldman told the panel.
The current patent system lacks the transparency needed to ensure that it is fair, open, and efficient, Feldman said in testimony submitted to the Senate Judiciary Committee’s Subcommittee on Intellectual Property. Even good-faith actors, including small businesses, struggle to determine who owns patents and what those patents cover. “Small business just can’t afford to spend a fortune playing detective, and the system shouldn’t require them to do so,” Feldman said. As patents are government-conferred grants, transparency is particularly important to ensure that patents are used appropriately.
Feldman, the founder and director of UC Law SF’ Center for Innovation (C4i), frequently provides expert testimony and guidance to legislators. She is a prolific scholar who has published four books and more than 70 scholarly articles on patents, intellectual property, and related legal issues. She also has major articles forthcoming in the Harvard Journal on Legislation, the Columbia Science and Technology Law Journal, and other publications. Her work was cited recently in a letter from Acting FDA Commissioner Janet Woodcock to the Patent and Trademark Office (PTO).
Sen. Patrick Leahy (D-Vt.), who chairs the subcommittee, recently introduced the Pride in Patent Ownership Act. His legislation would require patent owners to disclose their identity whenever a patent changes hands. “We are working to ensure a fair innovation system for small businesses, non-profits, and independent entrepreneurs who have a right to know, without expensive litigation, who has the exclusive patent rights over a particular invention,” Leahy said in a statement. That bill was cosponsored by Sen. Thom Tillis (R-N.C.), the subcommittee’s ranking member.
Under the current patent system, patent aggregators (a.k.a. “patent trolls”) can amass patent rights for the sole purpose of suing companies that develop products. Because it can be difficult to determine who owns which patent, it can be difficult to seek a license or challenge the validity of a patent. Some patent aggregators own tens of thousands of patents and distribute their holdings across hundreds of secret subsidiaries that exist in webs of complex networks.
This lack of disclosure has another subtle but critical social impact. “Women, in general, and women of color, in particular, are seriously underrepresented in the patent system,” Feldman wrote. “Without complete data, we have no idea of the extent to which the government’s system of handing out valuable patent rights may be bypassing important segments of the population.”
Many companies place their patents in foreign subsidiaries to avoid U.S. taxes. “As the U.S. patent system currently stands, we have no way of knowing the extent to which foreign interests may control our intellectual capital,” Feldman stated in her written testimony. Leahy said there was widespread bipartisan interest in finding a solution to the matter of offshore patent ownership.
The subcommittee also heard testimony from Allon Stabinksy (Intel), Abigail Rives (Engine), and David J. Kappos (Cravath, Swaine & Moore LLP., former PTO director). Stabinsky is UC Law SF ’98.