Effective USPTO is key to economic growth

The importance of patents has not diminished over time. To the contrary, patents played a central role in supporting the industrial revolution in 19th-century America and were associated with key U.S. innovative breakthroughs in the 20th and early 21st century as well. Throughout these periods, litigation over the boundaries of patent rights played a central role in the sorting out of legal rights in new industries. Indeed, lawsuits went hand-in-hand with patent-enabled breakthroughs that allowed for the introduction and widespread adoption of new products that fundamentally transformed American industry (sewing machines in the 1800s; telephones, airplanes, and electrical equipment in the 1900s; and smartphones in the 2000s—just to name a few).3 Over the 1995–2015 period, patent licensing by academic and nonprofit institutions contributed $1.33 trillion to U.S. gross industry output; $591 billion to the gross domestic product; and supported 4,272,000 American jobs.4 While individual patents consistently have been the subject of legal disputes over time, patents as a whole have clearly been at the heart of successive waves of critically important American commercial innovation and continue to make enormous contributions to the American economy.

I. An Overview of Patents and Recent Court Decisions Affecting the U.S. Patent System5

The U.S. Patent and Trademark Office (PTO), an agency within the U.S. Commerce Department, examines patent applications and issues patents that it determines meet the statutory criteria for patentability.6 Also, upon request by third parties, the PTO conducts “second look” reviews of issued patents to determine if they should have been issued or not.

A patent for an invention is the grant of a property right to the inventor. A patent may contain a variety of specific “claims” that define the precise subject matter that is protected by the patent. Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions: In short, patent rights are national in scope. Once a patent is issued, it (similar to other private property rights) is enforced by its owner, not by the PTO. When a patent is granted, key information related to the patented invention is published, adding to the stock of valuable, publicly available technical information. This information is a public good: It facilitates the efforts of third parties to develop their own innovations and thereby spurs technological development and economic growth.