Patent and Trade Secret Wishes for 2016

COMMENTARY Economic and Property Rights

Patent and Trade Secret Wishes for 2016

Jan 11, 2016 2 min read
COMMENTARY BY

Former Deputy Director, Meese Center

Alden Abbott served as Deputy Director of Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.

*Note: This piece is part of a larger article with contributions from several different policy experts.

1. Congressional Enactment of Civil Trade Secret Legislation

At the end of 2015, bipartisan bills establishing a federal civil private right of action for victims of trade secret theft were under consideration in both Houses of Congress. Given the seriousness of trade secret theft in the globalized high tech environment, congressional enactment of carefully calibrated trade legislation in 2016 would prove beneficial to the American economy. (I recently discussed this topic at greater length in IP Watchdog.)

Appropriate federal trade secret legislation should be informed by two overarching principles.

First, to promote uniformity in application and benefit from state law experience, federal legislation should to the greatest extent possible draw upon the language of the Uniform Trade Secrets Act (adopted in various forms by most states). Federal legislation should not displace state law – it should complement it in a way that strengthens the economy while benefiting from state experiences in applying their textually-similar trade secret provisions. (This approach is far from unique – federal and state trademark protection peacefully coexist.)

Second, federal legislation should provide for expedited ex parte relief, in the form of a federal court-ordered seizure of property from the party accused of misappropriation, if necessary, to prevent dissemination of the trade secret. Legislative language should ensure that appropriate relief is granted in a manner that protects the legitimate rights of all interested parties.

In sum, while no panacea, the enactment of measured, carefully-tailored federal trade secret legislation would provide a flexible new tool to victims of trade secret theft, help American businesses secure some of their most valuable assets, and at least somewhat reduce the burden of trade secret theft to the business community and the overall American economy.

2. Federal Leadership to Protect Patent Rights Overseas – and at Home

In a recent article, former Patent Commissioner Bob Stoll correctly highlighted a disturbing trend:

“China and South Korea are quietly implementing antitrust policies that may require U.S. leaders in the industry to cheaply license their portfolios to domestic competitors in those countries. These types of actions are taking place under the guise of ensuring that technology standards are properly implemented and available in the global marketplace. However, when taken together, they signal a concerning trend by protectionist-minded foreign governments to undermine American patent rights, putting American companies at risk.”

Unfortunately, the attack on the rights of standard essential patent (SEP) holders is not just limited to East Asia. Indeed, it draws aid and comfort from public statements and actions of senior U.S. Government antitrust officials (see my article here), which not only support limiting returns to SEPs, but more generally express a philosophy that is highly skeptical of patents (a philosophy that departs from the former bipartisan consensus in support of a robust patent system). That philosophy the key role strong patent rights play in promoting technological innovation and economic growth. It is my hope that, in 2016, the U.S. Government will revisit its thinking about patents in light of a growing law and economics literature that underscores the value of strong patent regimes to the economy. As one aspect of such a revision, the federal antitrust agencies should strongly endorse the position that they will not challenge the efforts of patent holders to maximize returns to their property rights, and should readopt the pro-patent position of prior administrations (the Clinton Administration, for example). Once this is done, the U.S. Government should then aggressively promote their new enlightened patent policies in major speeches, in negotiations with individual foreign governments, and in presentations to multinational bodies, such as the International Competition Network and the European Commission. Foreign patent policies would not change overnight, but U.S. Government leadership could at least get the process started.

This piece first appeared in IP Watchdog.