WASHINGTON, DC – The Innovation Alliance, a coalition of companies seeking to enhance America’s innovation environment by improving the quality of patents and protecting the integrity of the U.S. patent system, today applauded the release of a new study that details the negative impact on the U.S. economy that would result from enactment of patent legislation similar to that considered in the last Congress.

The new study: “The Likely Adverse Effects of an Apportionment-Centric System of Patent Damages” is authored by Scott Shane, Ph.D., Professor of Economics at Case Western Reserve University. It was commissioned by the Manufacturing Alliance on Patent Policy. Dr. Shane’s analysis concludes that the adoption of an apportion-based approach to damages for patent infringement would reduce patent value substantially, shrink the value of public companies, decrease investment in R&D, impose downward pressure on manufacturing jobs and compensation, and favor certain industries over others. Specifically, the study detailed several adverse effects, including:

1. Between 51,000 and 298,000 U.S. manufacturing jobs put at risk.
2. Reduction in U.S. patent value of between $34.4 billion and $85.3 billion.
3. Reduction in value of U.S. public companies of between $38.4 billion and $225.4 billion.
4. Reduction in R&D of between $33.9 billion and $66 billion per year.
5. Industries employing fewer people favored over those employing more people.

Despite the significant impact a change in the current patent awards system would have on thousands of U.S. employers and millions of U.S. workers, it is believed that this is the first time the apportionment of damages issue has been studied and the impacts quantified.

“Given the state of our economy, it would be unwise to unnecessarily experiment with our patent system – putting jobs and investment in R&D at risk,” said Taraneh Maghamé, Vice President, M&A and Government Relations, Tessera, Inc.