Tuesday, January 17, 2012

Professors Petherbridge and Rantanen argue that the America Invents Act could be counterproductive

By Professors Lee Petherbridge & David Schwartz

Professor Lee Petherbridge is involved in a debate on PENNumbra, a University of Pennsylvania Law School project (originating with their law review) that hosts debates between scholars on current controversies. He and Professor Jason Rantanen of the University of Iowa College of Law have asserted that despite its stated goal to stimulate innovation and job creation, the America Invents Act (recent patent reform legislation) may well do just the opposite. In response, Professor Kesan (Illinois) examines other sections of the Act, arguing that they provide more reason to be optimistic.
In the piece, the professors argue that:

"All rules are distortive. In perhaps no instance is this idea more true than when it comes to the patent system. In a very fundamental sense, the system is nothing more than a set of rules imposed for the very purpose of affecting the behavior of economic actors. Like so many other rules, it has a laudable purpose: the desire to efficiently stimulate invention and innovation.

The purpose of the newly enacted Leahy-Smith America Invents Act (AIA) is to rearrange the rules of the patent system and thus to create a new and different set of benefit and cost possibilities for economic actors. Pub. L. No. 112-29, 125 Stat. 284 (2011) (to be codified in scattered sections of 35 U.S.C.). Unfortunately, the changes in benefits and costs worked by the AIA seem tailored to do two things: (1) discourage the patent-driven incentive to innovate, and (2) protect market power. This suggests the AIA may have a negative effect on American competitiveness and job creation, a disappointing outcome given that Congress's express purpose in enacting the law is to promote technological development and protect the rights of small businesses and inventors."

Read the complete debate on PENNumbra.

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