U.S. Drops to 13th in Worldwide Patent Protection According to Study Released by U.S. Chamber of Commerce

McDonnell Boehnen Hulbert & Berghoff LLP

The U.S. Chamber of Commerce's Global Innovation Policy Center released its 5th annual study that ranks intellectual property systems worldwide.  In the Chamber of Commerce's latest study, the U.S. patent system has dropped to 13th in the world, well behind such diverse countries as Singapore, France, Ireland, Japan, South Korea, Spain, Sweden, Switzerland, and Italy.  See "U.S. Chamber International IP Index" ("2018 Report") at p. 35 (Category 1: Patents, Related Rights, and Limitations).  The U.S. Chamber International IP Index uses 40 discrete indicators covering policy, law, regulation, and enforcement.  The Chamber's stated goal:  to determine whether "a given economy's intellectual property system provide[s] a reliable basis for investment in the innovation and creativity lifecycle."  2018 Report at p. 1.

A review of the last several rankings by the U.S. Chamber of Commerce's studies shows that, although the U.S. had the unquestioned lead in patent protection in 2012-2014, its advantage has dropped each year thereafter, and continues its precipitous decline:

See "U.S. Chamber International IP Index," at "View Report".

The reason for this precipitous drop in 2017, and the U.S.'s continued decline in 2018, is directly tied to recent Supreme Court decisions and the perceived one-sided nature of IPRs under the AIA, particularly as implemented by the U.S. Patent and Trademark Office:

This change is primarily driven by relative weakness in patentability requirements and patent opposition (indicators 2 and 8).  For the former, the patentability of basic biotech inventions was compromised by the Supreme Court decisions in the 2013 Molecular Pathology v. Myriad Genetics and 2012 Prometheus Laboratories, Inc v. Mayo Collaborative Services cases.  The rulings raised uncertainties over the patentability of DNA molecules that mimic naturally occurring sequences as well as other patented products and technologies isolated from natural sources.  In 2017, interpretation of the recent Supreme Court decisions in Myriad, Mayo, and Alice Corp vs. CLS Bank International by lower courts and guidance from the USPTO remained inconsistent and difficult to apply.  There is considerable uncertainty for innovators and the legal community, as well as an overly cautious and restrictive approach to determining eligibility for patentable subject matter in areas such as biotech, business method, and computer-implemented inventions.  This seriously undermines the longstanding world-class innovation environment in the U.S. and threatens the nation's global competitiveness.

2018 Report at p. 8; see also pp. 8-9 (citing the "disproportionate rate of rejections" in IPRs and "a lower burden of proof" than in litigation as "inject[ing] a great deal of cost and uncertainty for patent owners compared with other post-grant opposition systems").

Although the United States remains the leader in IP protection when looked at as a whole, with a very slim lead over the U.K. (one hundredth of a point, 37.98 vs. 38.97) (2018 Report at p. 6), the U.S. has barely maintained that overall lead thanks to the continued strength of protection of copyrights, trademarks, trade secrets, and IP commercialization.

The U.S. Chamber of Commerce, founded in 1912, is reportedly the world's largest business organization representing the interests of more than 3 million businesses in varying of all sizes, sectors, and regions and represents state and local chambers and industry associations.  The Global Innovation Policy Center is a committee within the U.S. Chamber of Commerce that seeks to promote innovation and creativity globally by advocating for strong IP standards.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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