“The Future of IP Series”

Intellectual Property
Institute

October 29, 2009

1/
IPI Seminar/
October 29, 2009
Is the Patent System Under Attack?
Pressures on the Patent System
 Backlogs at the Major Offices
 Public Outcry of Poor Quality Patents
 Competing Systems for Driving Innovation
 Backlash Against the IP System
 Developing Economies
 Global Challenges, e.g., Health, Climate Change. . .

2/
IPI Seminar/
October 29, 2009
Challenges at the EPO & USPTO
 Increasing Backlog. . . Can they get ahead of it?
 This is a Global Problem (not just EPO & USPTO)
- Can’t necessarily hire their way out of it
- Filings may decrease, but not permanently
- Decreasing allowance rates compound the problem
 Possible Solutions
- Increase the fees? - Deferred examination?
- Restrict continuations? - Work-Shifting to Users?

Full Faith & Credit 3/

Must be our Ultimate Goal IPI Seminar/

October 29, 2009
Challenges at the EPO & USPTO
Public Cry of Poor Quality Patents
 Perception vs. reality. . . What is the REAL issue?
 We can do more to help the patent offices
1. Higher quality appls (self-regulate or be regulated)
2. Disclosing the best prior art is a must, but. . .
Inequitable Conduct is still a barrier
3. More data & digitization can drive greater efficiency
4. More collaboration with the Offices (e.g., peer-to-patent)
5. Full faith & credit must be our ultimate goal

There Aren’t Any Problems

We Can’t Fix Together 4/
IPI Seminar/
October 29, 2009
Competing Systems to IP
Open Innovation. . . Connect & Develop
 Other systems provide new options
 Different solutions for different industries & situations
 Why can’t they co-exist with a robust IP system?
- Patent quality, patent trolls, damages, etc.?
- Systemic IP issues are being addressed via. . .
o The Courts, and
o Patent Law Reform
 The IP system is evolving & adapting as needed

The IP System is Still

5/

The Best Driver of Innovation IPI Seminar/

October 29, 2009
Reactions to IP “Quality” Scare
 Raising the Bar on Obviousness. . . KSR
 Challenging Patents in Court. . . Medimmune, Sandisk
 Patentable Subject Matter
• In re Nuijten - Electrical signals deemed not patentable
• In re Bilski - Managing weather risk in commodity trading
• In re Comiskey - Mandatory arbitration of legal documents
• Metabolite – Method for identifying a vitamin deficiency
 US Patent Reform
1. Damages 5. Post Grant Review
2. Inequitable Conduct 6. Applicant Quality Submission
3. Interlocutory Appeals 7. First-to File
4. Venue 8. Misc. (Best Mode, Fee Diversion,
etc.) 6/
IPI Seminar/
October 29, 2009
Is the Patent System Under Attack?
What Does the Evidence Say?
 Courts & Congress are raising the bar
 IP Rights are being questioned as never before
 Anti-IP activists are more active than ever
- Amount of anti-IP blogs has risen dramatically
- Anti-IP community has engaged the media
- Anti-IP activists are attacking new areas
 Developing countries industrial policy can make excellent
use of the anti-IP agenda and rhetoric

We Can Not Afford to Take

The Patent System for Granted 7/
IPI Seminar/
October 29, 2009
The Anti-IP Activists Are Going Green
The anti-IP activists see green technology as a new
opportunity to exploit their Anti-IP Playbook; namely. .

1. 2. 3.
Position “the Point to
problem” in the Intellectual Demand free
context of a global Property as a access to IP
Challenge “Barrier”

AIDS, famine, Drugs, seeds, Make good on human

climate change, etc. fuel cells rights commitments
8/
IPI Seminar/
October 29, 2009
UNFCCC Agreement & Challenge
The Agreement
Parties “shall take all practical steps to promote, facilitate and finance, as
appropriate, the transfer of, or access to, environmentally sound technologies
and know-how to other Parties, particularly developing country Parties…the
developed country Parties shall support the development and enhancement of
endogenous capacities and technologies of developing country Parties…”

The Challenge
 Developing countries seek to compel non-commercial transfer of clean tech.
in return for their post-Kyoto commitments (Copenhagen, 2009)
 Experts estimate $’s trillions investment needed to achieve low carbon future
– this requires significant innovation driven by both private & Gov. investment
 A post-Kyoto framework must involve commitments from all countries
without shutting down innovation and growth

9/
IPI Seminar/
October 29, 2009
G77 Green Tech Transfer Proposal
The G77 developing countries are aggressively fighting for
compulsory licensing of green technologies in exchange for
climate change commitments.

Ownership Technology Transfer Mechanism

Privately “available on an affordable basis including…
Owned compulsory licensing of patented technologies”
(Gov’t + “transfer government proportion on a reduced
Private) or no-cost basis”
Gov’t Owned “transfer at reduced or no-cost basis”
From G-77 and China Proposal
10 /
IPI Seminar/
October 29, 2009
What is the Role of Innovation
Do We Need More Clean Innovation?
One study finds that if we were limited to technologies available in 2005, the
present value cost of achieving stabilization at 550 ppm CO2 would be over
$20 trillion greater than with expected developments in energy efficiency,
hydrogen energy technologies, advanced bio-energy, and wind and solar
technologies (Edmonds 2007).

Other studies have found that accelerated technology development offers the
potential to dramatically reduce the costs of stabilization, with advanced
technology scenarios reducing the cumulative costs of stabilization by 50%
or more, yielding economic benefits of hundreds of billions to trillions of
dollars globally.

Innovation is a Critical
To Curing Climate Change 11 /
IPI Seminar/
October 29, 2009
Estimated 100-Year Potential
Cost Reductions
Comparative analysis of estimated cumulative costs over the 21st century of
GHG mitigation, with and without advanced technology, across a range of
hypothesized GHG emissions constraints.

12 /
IPI Seminar/
October 29, 2009
What Can We Do About it
Recognize the threat is real & growing
• The Anti-IP community has mobilized
RECOGNIZE
• Developing countries have joined forces with them
THE THREAT
• The desire to “get a deal” on climate change could trump
the need to preserve strong IP protection

The potential impact from compulsory licensing

ACKNOWLEDG
E THE IMPACT of green technology will be sweeping & broad
based

Amplify our voice by building a

MOBILIZE strong, cross-industry coalition (ACTI & IDEA)
AGAINST THE to deliver OUR message
ANTI-IP • Proving Strong IPR = R&D Investment = Innovation
• Innovation = Cost effective solutions & Tech Diffusion
13 /
IPI Seminar/
October 29, 2009
US Legislative Activity
IP Amendment in Foreign Affairs Bill
“To protect American jobs, spur economic growth and promote a “Green
Economy,” it shall be the policy of the United States that, with respect to the United
Nations Framework Convention on Climate Change, the President, the Secretary of
State and the Permanent Representative of the United States to the United
Nations shall prevent any weakening of, and ensure robust compliance with
and enforcement of existing international legal requirements as of the date of
enactment of this Act for the protection of intellectual property rights related
to environmental technology, including wind, solar, biomass, geothermal, hydro,
landfill gas, natural gas, marine, trash combustion, fuel cell, hydrogen, micro-
turbine, nuclear, clean coal, electric battery, alternative fuel, alternative refueling
infrastructure, advanced vehicle, electric grid, or energy efficiency-related
technologies.”

Larsen/Kirk Amendment 14 /

Passed 432-0!! IPI Seminar/

October 29, 2009
How is GE Reacting?
1. We agree with a high standard of patentability
2. GE’s focus was already on Quality!!
3. High quality IP is in ALL our best interest
4. Filings may actually go down as a result
5. Re-examinations are on the rise
6. GE is seeking to collaborate with Patent Offices
7. Willingness to fight has gone way up
8. GE is DEFENDING the IP system globally
9. If WE don’t support the system, WHO WILL?
15 /
IPI Seminar/
October 29, 2009