Fall 2013 Issue of Horizons

LIFE SCIENCES

Life Sciences Patent Issues and Funding Updates by Steve Hays, CPA

I n June 2013, the White House task force on high-tech patent issues issued an initiative designed to facilitate continued innovation and help ensure the continued development and delivery of high-quality patents in the U.S. The initiatives are a response to Patent Assertion Entities (PAEs) which are companies designed to assemble a portfolio of patents and then license them or litigate them. PAEs are also referred to as “patent trolls” because a good portion of these entities focus solely on litigating or threatening litigation against firms that may be utilizing a technology covered by a patent in the patent troll’s portfolio.

While PAEs can provide economically desirable outcomes (e.g., expanding markets for technology and facilitating technology transfer and diffusion through legitimate licensing activities), it is argued that patent trolls have a negative impact on innovation and research and development. The White House initiatives are designed to realign incentives and risks in order to spur and protect research and development efforts of innovative entities within the economy. The proposals are encompassed in seven recommendations for Congress to pursue through legislation and five actions implemented through the Executive Branch.

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