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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

Associations Recommend USPTO Drop Proposed “Attributable Owner” Rule

April 25, 2014—Six higher education associations, including the AAMC, April 24  asked the U.S. Patent and Trademark Office (USPTO) to withdraw a proposed rule that would change the USPTO’s rules of practice to require identification of “attributable owners,” or those organizations that ultimately control title to a patent or enforce patent rights under licenses.

Examples of attributable owners might include a parent corporation acquiring a high-tech start-up, or a firm with an exclusive license empowered to litigate infringement.  The USPTO published the Notice of Proposed Rulemaking (NPRM) in the Jan. 24 Federal Register.

The higher education associations are concerned that licensees of university patents often require confidentiality in their agreements, primarily as protection from competitors.  The letter notes that the rule, which could require public disclosure of such licensees, could have a “chilling effect” on tech transfer.  To the extent that the rule might apply retroactively – for example, if a prior awarded patent becomes involved in a reexamination proceeding – academic institutions could be placed in the position of violating prior legal agreements with their licensees.

In its notice, USPTO stated that the proposed rule was part of an administration-wide initiative to improve transparency in government operations.  The agency also noted its intent to curb frivolous or abusive litigation.  In this regard, the rule represents a further effort to curb the activities of “patent trolls,” such as organizations whose business model is to acquire patents and then to litigate or threaten to litigate alleged infringers of those patents, thereby garnering revenues from legal settlements or damage awards. 

Such firms, or firms that emulate aspects of such behavior, often work through shell companies or subsidiaries to protect their own assets during litigation, hence the USPTO’s interest in identifying attributable owners. 

In their comments, the associations question the rule’s potential effectiveness in curbing troll behavior, while noting the likely compliance burden posed for legitimate inventors and innovators. 

Regarding transparency, universities already provide much patent information to federal agency websites.  “The NPRM appears premature,” the associations wrote, “given that legislation is now pending in the Congress. If enacted, that legislation may affect patent ownership disclosure requirements.”  They conclude: “It would be more prudent for [US]PTO to wait for the results of the current legislative process before engaging in rulemaking in this area.”

In addition to the AAMC, the commenting associations include the Council on Governmental Relations, American Council on Education, Association of American Universities, Association of Public and Land-grant Universities, and the Association of University Technology Managers.

Contact:

Stephen Heinig
Director, Science Policy
Telephone: 202-828-0488
Email: sheinig@aamc.org

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org