To earn a patent, an inventor must disclose the details of their invention to the public, but there is no requirement to reveal the owner of a patent after it issues.
Many intellectual property experts say that lack of transparency complicates licensing deals, runs up the cost of litigation, and hands competitive advantage to foreign rivals, so Sens. Patrick Leahy (D-VT) and Thom Tillis (R-NC) have introduced legislation that would remove the veil. Their bill, the Pride in Patent Ownership Act, was the subject of a Senate Judiciary subcommittee hearing last week on “the value of knowing who owns a patent.”
The Leahy-Tillis bill would instruct the Patent and Trademark Office to “maintain a register of interests” in patents and patent applications and make it available to the public in a database searchable by patent number, assignee, assignor, and date of assignment, among other fields.
Patent owners that fail to provide this information within 90 days of filing would be restricted from recovering punitive damages for the infringement of their patents until they comply.
The bill also requires the written disclosure of any government entity, domestic or foreign, that finances patent application or maintenance fees or pays a lawyer to do so.
Abigail Rives, intellectual property counsel at technology-policy non-profit Engine, testified that creating such a registry would reduce transaction costs and wasteful legal spending, discourage abuse, and give start-ups information to defend themselves against frivolous suits while promoting “evidence-based, data-driven innovation policy.”
Robin Feldman, a professor at UC Berkeley’s Hastings College of the Law, testified that patent troll shell companies take advantage of the lack of patent transparency to make it difficult for defendants in infringement lawsuits to know what they are up against. Feldman argued that having additional information about patent ownership would be especially helpful to small businesses.
“This information allows innovators to avoid infringement, negotiate permission, and maximize innovation efficiency,” Feldman said.
Former Patent Office director David Kappos, a long-time proponent of increasing transparency around patent ownership, welcomed the Leahy-Tillis bill while suggesting several ways it could be improved. Kappos warned that the 90-day recordation penalty could end up benefiting infringers. He suggested that lawmakers consider adding positive incentives, an opportunity for owners to explain errors, and a longer timeline.