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The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition

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Citation Edit


Federal Trade Commission, The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition (Mar. 2011) (full-text).

Overview Edit

This report recommends improvements to two areas of U.S. patent law: policies affecting how well a patent gives notice to the public of what technology is protected and remedies for patent infringement.

The report recognizes that patents play a critical role in encouraging innovation. At the same time, it observes that some strategies by patent holders risk distorting competition and deterring innovation. This is especially true for activity driven by poor patent notice, and by remedies that do not align the compensation received by patent holders for infringement with the economic value of their patented inventions.

Patent notice Edit

To address these issues, the report first recommends improving policies relevant to the patent notice function through actions by the courts and the Patent and Trademark Office. Clear notice of what a patent covers promotes innovation by encouraging collaboration, technology transfer, and design around. But poor notice undermines these benefits if potential licensees cannot find relevant patents, or if companies hesitate to invest in technology because the scope of others’ patents are unclear. Poor patent notice also can distort competition by forcing firms to design products and make investments with incomplete knowledge of the cost and availability of different technologies. The report suggests mechanisms to improve the public’s ability to identify relevant patents, to understand the scope of patent claims, and to predict the breadth of claims that are likely to emerge from patent applications.

The FTC’s recommendations to improve patent notice include:

Patent remedies Edit

The report also explains that patent remedies that align compensation of patent holders with the economic value of their patented inventions are important for both innovation and competition. Patent damages that under-compensate patentees for infringement can deter innovation. But overcompensation can lead to higher prices and encourage speculation in patent rights, which also deters innovation.

The report makes recommendations to courts that would ground damages calculations and injunction analysis in economic principles that recognize competition among patented technologies.

The FTC’s recommendations to courts to improve patent remedies law include:

See also Edit

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