Innovation and the U.S. Patent System

Abstract

This paper identifies and discusses changes in application of United States patent laws by the Court of Appeals for the Federal Circuit (CAFC) that resulted in lowered patentability standards, increased uncertainty in the outcome of patent litigation, and excessive damages for patent infringement. The adverse impact of these changes on innovation in the United States is noted.

The paper also examines facts underlying creation of the CAFC, including the pecuniary interests of patent lawyers who practiced before the United States Patent & Trademark Office (USPTO) and whose livelihoods would be adversely impacted if the USPTO were to follow the admonition of the United States Supreme Court to strictly adhere to the 1952 patent act as interpreted by the Supreme Court. The growth in the number of patent lawyers following creation of the CAFC is noted.

The paper concludes with recommendations for reforms to the United States patent system to undo the harms caused by the CAFC.

Keywords: Patents, Innovation, Federal Circuit

JEL Classification: 034