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Thursday, November 14, 2013

Tailoring the Patent System for Specific Industries

John R. Thomas
Visiting Scholar

Congressional interest in the patent system has been demonstrated by the enactment of the Leahy- Smith America Invents Act (AIA) in the 112
th Congress. Most of the provisions of the AIA apply to any type of patented invention, whether it consists of a chemical compound, mechanical device, electrical circuit, or other technology. However, other AIA provisions are specific to particular types of inventions, including business methods, tax strategies, and human organisms. The AIA reflects the principle that, for the most part, patentable inventions are generally subject to the same statutory provisions. However, a number of exceptions exist to this concept of technological neutrality.

This blended architecture has for many years prompted inquiry into whether the patent system operates best as a uniform system that applies neutrally to all inventions, or whether it could or should be tailored to meet the specific needs of different industries. Technologies and industrial sectors arguably differ in ways salient to the patent system. Among these distinctions are the costs and risks of research and development, the availability of trade secret protection as an effective alternative to patenting, the number of patents that cover a particular product, and the patterns of patent acquisition and enforcement of firms within that sector. The patent system involves a number of parameters that could potentially be adjusted to meet the needs of individual sectors, including the speed with which applications are reviewed, the scope of exclusive rights afforded by a patent, and the term of the patent.

While some observers suggest the desirability of sector-specific patent principles, others believe them to be infeasible and unwise. They observe that legislative efforts to define particular industries may prove difficult, that attorneys may sometimes be able to draft patents artfully so as to fall within a favored category, and that U.S. industry is dynamic and resistive to a static statutory definition. In addition, U.S. membership within the World Trade Organization (WTO) may limit the ability to tailor the patent system to account for different industries and inventions, to the extent that compliance with WTO standards is desired. The WTO-administered Agreement on Trade-Related Aspects of Intellectual Property, or TRIPS Agreement, in part requires WTO member states to make patent rights available without discrimination as to the field of technology. The TRIPS Agreement admits some exceptions exist to this principle of technological neutrality, however.

Should Congress believe current circumstances to be appropriate, then no action need be taken. To the degree WTO compliance is desired, Congress could also legislate along the lines permitted by the TRIPS Agreement. Notably, although the TRIPS Agreement generally disallows discrimination with respect to technological fields, it permits distinctions on other grounds. Congress could also make use of regulatory exclusivities and other complementary intellectual property rights that the TRIPS Agreement regulates less heavily.

Date of Report: October 29, 2013
Number of Pages: 16
Order Number: R43264
Price: $29.95

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