Will patent reform serve to attract the capital required to improve IP values and stimulate innovation?

Glenn D. Sacks, CPA, of Marks Paneth & Shron LLP, writes the changes in patent law being ushered in by America Invents Act will work to increase the value of patent portfolios and create a system which spawns and nourishes innovation. Here’s how he sees it working:

  1. Increased funding of USPTO should lead to better initial examinations of patent applications, leading to higher quality patents and less litigation;
  2. Validity of patents granted should be easier to defend;
  3. “First-to-file gets the patent” should lead to less litigation on ownership issues;
  4. As a result of points 1-3, patents will be easier to monetize:
    1. Net cash flows are expected to be greater, yielding greater values;
    2. Greater value and less risk will allow IP owners to put more IP into collaborations.
More IP in play is a net increase in innovation, which attracts new capital.  New capital creates new products and processes and breeds still more innovation, renewing the cycle.