US patent law change to protect innovators

The Federal Trade Commission is recommending changes to US patent law which it hopes will make it more likely that companies will innovate in high tech product development.

A new report proposes changes in the way the market is notified of technology that is protected and proposes new remedies for patent infringement.

“The recommended changes would benefit consumers by encouraging investments in innovation and promoting competition among patented technologies,” said FTC Commissioner Edith Ramirez.

“This new report provides valuable insights on how courts can reform the patent system to best serve consumers, and it complements the Commission’s 2003 report on improving patent quality,” said FTC Chairman Jon Leibowitz.

Significantly, the report recognizes that “some strategies by patent holders risk distorting competition and deterring innovation”.

One of the causes, concluded the report, is that “remedies do not align the compensation received by patent holders for infringement with the economic value of their patented inventions”.

To address these issues, the report first recommends improving policies relevant to the patent notice function through actions by the courts and the Patent and Trademark Office.

The report says that “patent remedies that align compensation of patent holders with the economic value of their patented inventions are important for both innovation and competition”.

The FTC is recommending change, but also a balanced patent policy.

“Patent damages that under-compensate patentees for infringement can deter innovation. But overcompensation can lead to higher prices and encourage speculation in patent rights, which also deters innovation,” said the FTC report.

The report, The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition .

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