Sacramento Bee: Opinion: Federal ‘Innovation Act’ will undermine California’s economy

By Sara Radcliffe, Op-Ed Special to The Sacramento Bee
July 30, 2015

In recent years, the University of California has benefited from an annual infusion of nearly $100 million.

That money didn’t come from state coffers or private donors. It came from royalties and fees generated by the 11,500 inventions developed by UC researchers in recent years.

Sara Radcliffe, CLSA President & CEO
Sara Radcliffe, CLSA President & CEO

Unfortunately, this income stream is now in jeopardy. Congress will soon consider the misleadingly named “Innovation Act,” which would make it significantly harder for innovators to protect their creations from intellectual property theft. This bill is misguided – and it would have economically disastrous effects. California’s elected officials must oppose this legislation in order to protect our state’s world-leading inventors.

Patents prevent others from copying an inventor’s idea and creating a competing product. In so doing, patents provide inventors with the assurance their hard work can pay off.

Businesses and inventors are already struggling to protect their intellectual property from copycats. A 2011 federal law established a patent review board, outside the courts, to oversee disputes about the validity of a patent. Because of its pro-challenger standards, the board has developed a reputation as a patent “death squad” for its tendency to invalidate patents.

The Innovation Act would weaken patent protections even further by making it tougher for inventors to sue intellectual property thieves. Many in Congress think making it harder to file a patent lawsuit will combat “patent trolls” – people who patent vague ideas to extort licensing and settlement fees from companies that use the same idea in their products. Though well intentioned, the act would prevent legitimate patent holders from defending their designs against actual patent violators.

The law would require all patent suits to include “enhanced pleadings” – that’s legalese for boatloads of additional paperwork. This administrative burden will prove prohibitively expensive for innovators, particularly those operating on limited capital, like small businesses and nonprofits.

Other parts of this legislation would weaken the technology transfer process that turns university research into real-world products and new companies.

It’s no surprise, then, that 143 universities, including the California Institute of Technology and University of Southern California, have condemned the Innovation Act in a letter to Congress. They warn that the Innovation Act “would discourage universities and other patent holders … from legitimately defending their patents.”

Such corrosion of intellectual property protections would be particularly devastating to the state’s numerous small and start-up biopharmaceutical and medical device companies. Life sciences research is an extremely high-risk, high-cost and lengthy endeavor. Weakening patent protections would make investors less likely to take a gamble and invest in new research, leading to fewer new jobs and slowed economic growth – especially in California.

San Francisco, San Diego and Los Angeles are three of the nation’s biggest life sciences clusters. More than 270,000 Golden State residents work for biomedical companies. And the industry boosts California’s annual economic output by generating more than $101 billion in total revenues.

Several of California’s leaders in Washington, including Reps. Mimi Walters, R-Laguna Niguel, and Scott Peters, D-La Jolla, recognize this. That’s why they’ve spoken up to support additional patent owner protections in the bill.

Without these improvements, California’s congressional representatives should oppose the Innovation Act. Failure to do so will weaken the biomedical research and investment that drives economic growth and job creation across our state.

Sara Radcliffe is president & CEO of the California Life Sciences Association.

Read the op-ed at The Sacramento Bee.