`
`Exhibit
`A
`
`
`
`
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`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 2 of 12 PageID 198
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`
`
`
`Patent Reform
`
`Unleashing Innovation,
`Promoting Economic Growth &
`Producing High-Paying Jobs
`
`
`
`A White Paper from the U.S. Department of Commerce
`
`April 13, 2010
`
`
`
`By: Arti Rai, Administrator, Office of External Affairs, USPTO
`Stuart Graham, Chief Economist, USPTO
`Mark Doms, Chief Economist, Department of Commerce
`
`
`
`
`
`
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 3 of 12 PageID 199
`
`
`Patent Reform:
`Unleashing Innovation, Promoting Economic Growth, and
`Producing High-Paying Jobs
`
`Executive Summary
`
`
`Stimulating economic growth and creating high-paying jobs are key priorities for the Obama
`Administration. This paper provides data demonstrating that technological innovation is a key
`driver of a pro-growth, job-creating agenda. It further demonstrates that patent reform legislation,
`by accelerating the pace of growth and of job creation, will be a powerful and deficit-neutral
`mechanism for expanding America’s ability to innovate.
`
`
`
` •
`
` Technological innovation is linked to three-quarters of the Nation’s post-WW II growth
`rate. Two innovation-linked factors – capital investment and increased efficiency – represent
`2.5 percentage points of the 3.4% average annual growth rate achieved since the 1940’s.
`
` •
`
`
`
`Innovation produces high-paying jobs. Average compensation per employee in innovation-
`intensive sectors increased 50% between 1990 and 2007 – nearly two and one-half times the
`national average.
`
` •
`
` Highly innovative firms rely heavily on timely patents to attract venture capital -- 76% of
`startup managers report that VC investors consider patents when making funding decisions.
`
`• Delay in the granting of rights has substantial costs. Recent reports conclude that the U.S.
`backlog (currently at 750,000 applications) could ultimately cost the U.S. economy billions of
`dollars annually in “foregone innovation.”
`
` •
`
` The fee-setting authority patent reform gives to the USPTO will contribute significantly to
`the agency’s planned 40% reduction in patent pendency.
`
` The enhanced post-grant review provided by patent reform will substantially reduce the need
`for inefficient court challenges. The cost of such proceedings is expected to be 50-100
`times less expensive than litigation and could yield $8 to $15 in consumer benefit for
`every $1 invested.
`
`
`
`(Page 1 of 8)
`
` •
`
`
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 4 of 12 PageID 200
`
`
`Discussion
`
`Stimulating economic growth and creating high-paying jobs are key priorities for the Obama
`Administration. This paper sets forth some of the empirical data demonstrating that technological
`innovation is a key driver of a pro-growth, job-creating agenda and that patent reform will be a
`powerful, deficit-neutral mechanism for expanding America’s ability to innovate.
`
`Patent reform legislation has been before Congress in one form or another for much of the last
`decade. As of this writing, the legislation appears to have a significant chance of passing during
`the 111th Congress. We believe this overview of the economic literature and other evidence will
`advance the discussion about patent reform and its impact on the economy.
`
`This country’s economic progress has long depended on technological innovation. Innovators, in
`turn, have depended in significant part on patents to undergird their business plans, including
`their hiring plans and their plans to invest in additional research and development (R&D). Such
`investment can generate additional patentable ideas, creating a virtuous cycle of innovation,
`growth, and additional innovation. Patent reform legislation will accelerate that process and
`speed the pace of growth and of job creation.
`
`Section I of this paper briefly recaps the linkage between innovation and growth, and between
`innovation-centric growth and the creation of high-paying jobs. The subsequent two sections
`discuss the abundant evidence demonstrating that timely, high-quality patents drive innovation
`and, conversely, that delay, uncertainty, poor quality, and inefficiencies in existing legal
`processes impede innovation. Section IV specifies what patent reform will do to address delay,
`uncertainty, poor quality, and inefficiency in the system.
`
`
`
`Innovation Fuels Economic Growth and Produces High-Paying Jobs
`
`I.
`
`
`A. It is Now Clear that Innovation is the Leading Driver of Economic Growth
`
`
`All major strands of economic thought now recognize that technological change is the primary
`driver of growth.1 In fact, modern economic theory holds that without technological innovation,
`accumulation of wealth could not be sustained and per capita growth would trend to zero.2
`
`Through ongoing academic work, the contribution of innovation to economic growth has become
`less and less of an abstract assertion. Today, as an empirical matter, we have strong evidence that
`the introduction of both new products and new processes is responsible for the lion’s share of the
`3.4% average annual growth rate the U.S. has enjoyed since World War II. While 0.9 percentage
`point of this annual growth has come from expansion of the labor force, the remaining 2.5
`percentage points have come from factors intimately linked to innovation – capital investment
`(1.1%) and increased efficiency (1.4%).3 In other words, factors linked to innovation are
`responsible for almost three-quarters of the Nation’s post-WW II growth rate.
`
`1 See generally Christopher Freeman & Luc Soete, THE ECONOMICS OF INDUSTRIAL INNOVATION 1-26 (3d
`ed. 1997) (reviewing the substantial economic literature on this point).
`2 Id.
`3 See Dale W. Jorgenson, Mun S. Ho, Jon D. Samuels & Kevin J. Stiroh, Industry Origins of the American
`Productivity Resurgence, 19(3) Economic Systems Research 229 (2007). In the economics literature,
`“efficiency” is often referred to as total factor productivity. See also Michael J. Boskin and Lawrence J.
`Lau, Generalized Solow-Neutral Technical Progress and Postwar Economic Growth, (Nat’l Bureau of
`
`(Page 2 of 8)
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 5 of 12 PageID 201
`
`
`
`With respect to capital investment, innovation helps decrease the price of many existing products,
`and it improves their quality. Innovation thereby enhances the desirability of investing in
`innumerable capital goods, including computers, telecommunications equipment, and machinery.
`Innovation also creates opportunities for investment in altogether new types of capital equipment,
`such as robotics. Innovation promotes efficiency by generating better ways of working,
`manufacturing, selling, including electronic inventorying, e-commerce, computer-driven
`manufacturing, and advertising linked to Internet search queries.
`
`The many specific examples of innovations that contribute to growth are so numerous and diverse
`as to be beyond cataloguing. At the aggregate level, however, it is clear that innovation’s impact
`on growth is profound.
`
`
`B. Innovation Produces High-Paying Jobs
`
`
`As it fuels economic growth, innovation also produces high-paying jobs. Recent studies by the
`Federal Reserve show that innovation in capital goods is the primary driver of increases in real
`wages. Without innovation, wages would be much lower.4 Additionally, across countries, 75%
`of differences in income can be explained by innovation-driven productivity differentials.5
`
`Within the U.S, the average rate of real compensation per employee in the private sector
`increased 20.2% between 1990 and 2007 (Table 1 of Appendix). But in several of the most
`innovative industries, including computers, electronics, and chemicals, real compensation per
`employee increased more than 50% -- nearly two and one-half times greater than the average.
`
`
`
`
`
`II.
`
`Timely, High-Quality Patents Drive Innovation
`
`A.
`
`Innovative, Venture Capital-Backed Startups Rely on Timely Patents
`
`
`Venture-backed startups disproportionately generate the new technological improvements upon
`which growth depends.6 Many of these firms rely heavily on patents to attract venture capital
`(VC). For example, in a large-scale survey conducted in 2008, 76% of startup managers reported
`that VC investors consider patents important to funding decisions.7 Similarly, analyses of VC
`funding databases demonstrate that owning patents is significantly correlated with success in
`acquiring first and additional rounds of VC financing.8
`
`
`
`
`Econ. Research, Working Paper No. 8023, 2000) (finding that physical capital and technical progress
`contribute 75% of U.S. growth 1960-1997).
`4 See Susanto Basu and John G. Fernald , What Do We Know (and Not Know) about Potential Output?,
`91(4) FRB of St. Louis Review 187 (2009).
`5 Robert E. Hall and Charles I. Jones, Why Do Some Countries Produce So Much More Output Than
`Others?, 114(1) Quarterly Journal of Economics 83 (1999).
`6 Samuel Kortum & Josh Lerner, Does Venture Capital Spur Innovation?, (Nat’l Bureau of Econ. Research,
`Working Paper No. 6846, 1998), available at SSRN: http://ssrn.com/abstract=10583 or
`doi:10.2139/ssrn.10583.
`7 Stuart J.H. Graham et al., High Technology Entrepreneurs and the Patent System: Results of the 2008
`Berkeley Patent Survey, Berkeley Tech. L.J. (forthcoming 2010) (manuscript at 28, on file with authors).
`8 Ronald J. Mann & Thomas W. Sager, Patents, Venture Capital, and Software Start-ups, 36 Research
`Pol’y 193 (2007).
`
`(Page 3 of 8)
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 6 of 12 PageID 202
`
`
`Numerous anecdotal accounts give texture to these large-scale empirical findings. For example,
`according to ExploraMed, a venture-backed medical technology incubation company based in
`Mountain View, California, the ability to secure timely patents has been critical in its quest to
`secure venture financing for the six medical device companies and more than 400 jobs it has
`created. These companies include Acclarent Inc., a company that develops new technologies in
`the field of ear, nose, and throat surgery. Acclarent, which employs 300 people and was acquired
`by Johnson and Johnson/Ethicon in January 2010, has a portfolio of over 100 patents.
`
`Similarly, the Foundry (a medical device incubator in Menlo Park, California that has created 14
`companies and employs over 300 people) reports that timely patent protection “was critical to
`enable our companies to receive the significant capital required to bring their technologies to
`market.” These companies included Evalve, a manufacturer of ultra-thin catheter for repairing
`diseased heart valves, that employed over 140 employees and owned over 50 patents before it
`was acquired by Abbott last year.
`
`
`High-Quality Patents Spur Innovation in the Pharmaceutical Industry
`
`B.
`
`Along with timeliness of patent examination and grant, high patent quality – that is, the grant of
`patents that meet statutory requirements of patentability such as novelty, non-obviousness, and a
`clear identification of precisely what the patent claims – is closely correlated with the most
`valuable innovations. Generally speaking, high quality is a feature of patents held by successful,
`growing companies in industries like the pharmaceutical industry. Moreover, economists have
`argued that this high quality contributes significantly to making pharmaceutical patents valuable
`to the industry, even after the costs of defending against patent litigation are taken into account.9
`Similarly, surveys of CEOs and R&D managers have shown that patents are among the most
`important means for securing competitive advantage from pharmaceutical innovations.10 The so-
`called “patent premium” (i.e., the incremental value realized on an invention by patenting it) also
`tends to be highest for biotechnology, pharmaceutical, and medical device companies.11 For
`those companies, a 10% increase in the strength of patent protection available to meritorious
`patents is associated with a 9-10% increase in R&D expenditures, which in turn drives innovation
`and growth.
`
`
`
`III.
`
`Delay, Uncertainty, Poor Quality, and Inefficient Legal Processes Hinder Innovation
`
`
`While timely, high-quality patents can provide a strong spur to innovation, the current patent
`system fails to provide consistent timeliness and quality. To the contrary, the current U.S. system
`is highly prone to delay and uncertainty as well as inconsistent quality. Moreover, lawsuits at the
`back-end that challenge the validity or scope of a patent after it has been issued cannot address
`the quality deficit. Delay, uncertainty, and poor quality at the front end ultimately make private
`investments in innovation less likely and undermine the potential for economic growth and job
`creation.
`
`
`
`
`9 James Bessen & Michael Meurer, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT
`INNOVATORS AT RISK (2008).
`10 Wesley M. Cohen, Richard R. Nelson & John P. Walsh, Protecting Their Intellectual Assets:
`Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not), (Nat’l Bureau of Econ.
`Research, Working Paper No. 7552, 2000).
`11 Ashish Arora, Marco Ceccagnoli & Wesley M. Cohen, R&D and the Patent Premium, 26(5)
`International Journal of Industrial Organization 1153 (2008).
`
`(Page 4 of 8)
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 7 of 12 PageID 203
`
`
`A.
`
`The Negative Effects of Delay and Uncertainty
`
`As regards timeliness, the problem is quite acute. The USPTO currently has a backlog of more
`than 750,000 patent applications, an accumulation that has doubled over the last decade. Delays
`are particularly problematic for startups with high growth potential. While the startups discussed
`in Section II were able to secure patents – and venture funding – in a timely fashion, many other
`startups have encountered difficulties. For example, NeoTract, Inc., one of the firms created by
`medical incubator ExploraMed, was not able to secure its first patent on enlarged prostate
`treatment until four years after it filed a patent application. This delay created significant issues
`for Neotract in raising a new round of VC financing. In fact, VC financing did not ultimately
`materialize until after the patent issued. Similarly, Innate Immune, a California firm with a new
`concept for treating asthma and lupus was prevented from securing a second round of VC
`financing because it lacked issued patents.
`
`More quantitative research also demonstrates the negative economic effects of a large backlog.
`For example, recent work conducted for the UK Intellectual Property Office by the consulting
`firm London Economics has focused in part on the costs that delays in securing patents impose on
`startups in the three major global patent offices -- the USPTO, the European Patent Office, and
`the Japan Patent Office. This report concludes that backlogs of the sort that the USPTO is
`currently facing could lead to “foregone innovation,” costing the economy billions of dollars
`annually.12
`
`The uncertainty associated with patent delay imposes significant costs not only on patent
`applicants but also on potential competitors. These competitors cannot know where to focus their
`research and development investments until they know precisely what a patent applicant has been
`able to claim as its inventive territory. Accordingly, companies in this situation may make fewer,
`or misdirected and wasteful, investments in innovation.
`
`
`B. The Negative Effects of Poor Quality and Inefficient Legal Processes
`
`Low-quality patents – that is, patents that are obvious, overly broad, or unclear in the inventive
`territory that they cover – also hinder innovation. This is because although patents may be low-
`quality, they can nonetheless be profitably asserted against genuine innovators in litigation.
`Indeed, some economists have argued that patent quality in technological areas such as software
`may have been so low during certain time periods that the litigation costs of defending against
`dubious patents exceeded the innovation benefits offered by high-quality patents.13
`
`
`Equally important, many invalid patents are never challenged in our current litigation system. In
`part, this is simply because of the extremely high cost associated with patent litigation. For
`example, in cases in which more than $25 million is at stake, the average cost per side can rise to
`$5 million or more. Over and above the sheer cost of a court challenge, the rules of civil
`litigation procedure place a substantial burden on those competitors in the same technological
`arena that are likely to have the best knowledge of invalidity, and could otherwise effectively
`challenge an invalid patent. Because of these civil litigation rules, the potential infringer that
`expends money to challenge an invalid patent successfully shares its victory with all potential
`infringers – the patent is invalid as to all potential infringers, including the challenger’s own
`
`12 London Economics, Economic Study on Patent Backlogs and a System of Mutual Recognition – Final
`Report To the Intellectual Property Office (2010), available at http://www.ipo.gov.uk/p-backlog-report.pdf.
`13 James Bessen & Michael Meurer, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT
`INNOVATORS AT RISK (2008).
`
`(Page 5 of 8)
`
`
`
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`
`
`competitors. Under these circumstances, as well as others, innovative firms often find it more
`economically rational to simply license invalid patents rather than challenge them.14 Collectively,
`the litigation and these licensing costs represent a significant tax on innovation.
`
`
`
`IV.
`
`Patent Reform Promotes Innovation by Addressing Delay, Uncertainty, Poor Quality,
`and Inefficient Court Challenges
`
`
`Patent reform has a number of features that should effectively address delay and uncertainty as
`well as poor quality and inefficiencies inherent in legal challenges. The two most notable reforms
`are fee-setting authority and enhanced post-grant review procedures.
`
`
`A. With Fee-Setting Authority, USPTO Can Significantly Reduce Delay and
`Uncertainty
`
`
`As noted, the USPTO currently has an unexamined patent application backlog of over 750,000.
`Patent application pendency – the time between when an application is filed and when it receives
`a final disposition – currently stands at 34 months on average. In certain areas of information and
`communications technology, pendency is even longer -- a particularly acute problem since rapid
`technological turnover and short product life-cycles may render delayed patents in these areas
`obsolete and worthless.
`
`In order to reduce the backlog, the USPTO will have to incur significant additional expenses,
`most notably expenditure on IT infrastructure upgrades and additional hiring of examiners. As a
`fully fee-funded organization, the USPTO must use fee revenues for all of these expenses.
`However, the fee schedule in the current patent statute fails to provide the USPTO with the
`flexibility it needs to assure that its future revenues are commensurate with the costs it will incur
`to modernize its operations. The current fee structure is inflexible and poorly aligned with actual
`costs, making it exceedingly difficult to fund long-needed modernizations.
`
`Additionally, even though the USPTO is a fee-based organization, patent applicants do not pay
`the full cost of the services the USPTO provides them. Rather, the initial processing and review
`of a patent application are highly subsidized. Under the current system, a patent applicant whose
`application does not issue pays only about one-third of total search and examination costs.
`
`The front-end costs are subsidized by back-end patent issuance and maintenance fees that are
`assessed on successful applicants. This dependence on back-end revenues is particularly perilous
`in the case of maintenance fees. Patentees may or may not choose to pay maintenance fees, and
`the magnitude of fees that will be realized in any given year can be quite difficult to predict. This
`model has proven extremely difficult to manage from an accounting and planning standpoint,
`especially during the economic tumult of recent years.
`
`Patent reform would be a significant step forward. It would provide the USPTO authority to
`flexibly adjust fees in a manner commensurate with its needs (as opposed to awaiting
`congressional amendment of fee schedules, which is currently the case). Aggregate fees would
`simply have to be set so as to recover the costs to the USPTO of the services it provides. With
`fee-setting authority, the USPTO could deliver on its aggressive goal (enunciated in the FY 2011
`
`14 Joseph Farrell & Robert P. Merges, Incentives To Challenge And Defend Patents: Why Litigation Won’t
`Reliably Fix Patent Office Errors And Why Administrative Patent Review Might Help, 19 Berkeley Tech.
`L.J. 943 (2004).
`
`(Page 6 of 8)
`
`
`
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`
`
`President’s Budget) of reducing to 20 months total average pendency. This anticipated 40%
`reduction in average pendency would offer greater certainty to innovators of all stripes, allowing
`for more timely and accurate R&D investments, and thus, substantially improve prospects for
`improvement in the Nation’s innovative performance and overall economic growth.
`
`
`B. Enhanced Post-Grant Review Would Improve Quality and Obviate the Need for
`Inefficient Legal Challenges
`
`
`Patent reform can also help reduce the cost of patent disputes. Challenging invalid patents is
`particularly daunting for small firms with limited resources. As a consequence, some analysts
`believe that large firms have been able to use even weak patents to threaten litigation, thereby
`forcing small competitors with breakthrough technologies out of business.15 Because enhanced
`post-grant review would offer a timely and much less expensive mechanism for challenging weak
`patents, it offers a solution to such problems. Enhanced post-grant review also offers an
`additional mechanism for improving patent quality.
`
`Recent research provides dramatic quantitative evidence about the efficiency improvements
`offered by enhanced post-grant review.16 This research relies on some basic mathematics on the
`cost of administrative review relative to litigation. Given that the cost of post-grant review is
`expected to be 50-100 times lower than the cost of patent litigation, it is reasonable to expect that
`more patents will be challenged under such a system. Moreover, if we take U.S. litigation
`experience as a guide, between one third and one half of these challenges can be expected to
`result in an invalidity decision. These patents will then be taken out of the system, saving both
`potential litigation costs and costs to consumers from the exercise of unwarranted market power.
`When patents are found to be valid, the post-grant review process will also generate significant
`benefits. These will include savings from a reduced likelihood of future litigation as well as more
`timely certainty for investors and innovators.17 For these reasons, researchers believe the cost-
`benefit ratio of adopting an efficient system of enhanced post-grant review procedures, such as
`that created by patent reform, could be as high as 1 over 15 – in other words, so long as PGR
`costs do not exceed $100,000, benefits are expected to range, conservatively, from a high of $15
`to a low of $8 for each $1 invested. 18
`
`Indeed, almost every academic economist who has ever examined whether an enhanced system of
`post-grant review should be adopted has favored such adoption.19 Enhanced post-grant review
`has also been strongly recommended in reports authored by the National Academy of Sciences,
`the National Research Council, and the Federal Trade Commission.20
`
`15 Stuart M. Benjamin & Arti K. Rai, Fixing Innovation Policy: A Structural Perspective, 77 Geo. Wash. L.
`Rev. 1 (2008).
`16 Stuart J.H. Graham and Dietmar Harhoff. Separating Patent Wheat from Chaff: Would the U.S. Benefit
`from Adopting a patent Post-Grant Review? (2009) (on file with authors).
`17 Stuart M. Benjamin & Arti K. Rai, Who’s Afraid of the APA: What the Patent System Can Learn From
`Administrative Law, 95 Georgetown Law Journal 269 (2007).
`18 Id. Given the cost of current reexamination proceedings at the USPTO, $100,000 is a conservative
`(meaning high) estimate of the maximum cost for an enhanced post-grant review proceeding.
`19 Academic economists who have written in favor of enhanced post-grant review include Joseph Farrell,
`Bronwyn Hall, Dietmar Harhoff, Richard Levin, and David Mowery.
`20 One short study commissioned by opponents of patent reform finds otherwise. Scott Shane, Problems To
`Be Expected from Expanded Administrative Challenges to U.S. Patents, Prepared for the Manufacturing
`Alliance for Patent Policy (2009). But in arguing that enhanced post-grant review would increase pendency
`and be associated with delay, the study misses basic structural features of such review. For example, it
`erroneously assumes that examiner resources would be used in PGR and that PGR fees could not be set at a
`
`(Page 7 of 8)
`
`
`
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`
`
`
`By providing a timely resolution to patent validity, enhanced post-grant review also offers
`advantages to those seeking to assert valid patents. Litigation-related delay in the resolution of
`validity contributes to uncertainty for technology investors, increasing the likelihood of
`underinvestment and mistaken investment, and adding transaction costs to technology
`commercialization.21 For granted patents reaching final judgment in a district court action, eight
`years elapses on average between the grant of the patent and the resolution of validity. For a
`quarter of these cases, more than 11 years elapses (see Figure 1, appendix).22 In contrast, the
`post-grant review provided by patent reform legislation would resolve validity within one year
`and significantly reduce the likelihood of litigation.
`
`
`
`Conclusion: Patent Reform as a Deficit-Neutral Innovation Boost
`
`V.
`
`
`
`
`Over the past several decades, the empirical evidence showing technological innovation as the
`leading driver of economic growth has become irrefutable. Congress has been presented with
`many policy proposals for promoting such innovation. Given the current economic and
`employment situation, all reasonable proposals should be considered. We believe the patent
`reform agenda deserves special attention because it has a unique trait. It is likely to expand the
`Nation’s innovative output while adding $0 to the Federal deficit. This deficit-neutral form of
`stimulus presents an economic opportunity that should be seized.
`
`
`cost-recovery level. The study also ignores the strict time limits on PGR set up by the patent reform
`legislation.
`21 Bronwyn Hall, Stuart Graham, Dietmar Harhoff & David Mowery, Prospects for Improving U.S. Patent
`Quality via Post-grant Opposition, 4 INNOVATION POLICY AND THE ECONOMY 115 (2004).
`22 Stuart Graham, Slow courts and the cost of uncertainty: How patent post-grant reviews may offer a
`partial solution (2010) (on file with author).
`
`(Page 8 of 8)
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 11 of 12 PageID 207
`
`
`Appendix
`
`
`
`Table 1. Real Compensation Per Employee, 1990 and 2007
`(All Dollar Amounts are in $2007)
`
`Industry
`
`Private Industry
`
`Compensation per Employee
`1990
`2007
`Percent Change
`$43,795
`$52,620
`20%
`
`Selected Innovation -Intensive Industries
`Computer and Electronic Products
`Electrical Equipment
`Chemical Products
`Publishing Industries (including Software)
`Information and Data Processing
`Computer Systems Design and Related Services
`
`$65,053
`60,098
`76,681
`52,097
`61,498
`82,133
`
`$109,280
`71,709
`104,794
`88,449
`91,175
`103,323
`
`Total selected innovation-intensive industries
`
`$65,793
`
`$98,891
`
`Source: Bureau of Economic Analysis
`
`
`68%
`19%
`37%
`70%
`48%
`26%
`
`50%
`
`
`
`
`Figure 1: Distribution, time delay from patent grant to suit resolution at trial,
`litigated patents granted 1975-2000.
`
`
`
`(Appendix, page i)
`
`
`
`Case 2:12-cv-02767-JPM-tmp Document 32-2 Filed 01/07/13 Page 12 of 12 PageID 208
`
`
`The Authors
`
`
`
`Arti Rai, Administrator, Office of External Affairs, U.S. Patent and Trademark Office
`(USPTO)
`
`Arti Rai was sworn-in as Administrator for External Affairs at the USPTO on October 19, 2009.
`Before coming to the USPTO, Ms. Rai was the Elvin R. Latty Professor of Law at Duke
`University. She is an authority in patent law, administrative law, law and the biopharmaceutical
`industry, and health care regulation and has served as a peer reviewer for Science, Research
`Policy, the Journal of Legal Studies, various National Academy of Sciences reports on
`intellectual property. She has held teaching positions with Harvard Law School, Yale Law
`School, University of Pennsylvania Law School, University of San Diego School of Law and
`University of Chicago Law School, Medical School and Graduate School of Public Policy.
`
`
`
`
`
`Stuart J. H. Graham, Chief Economist, U.S. Patent and Trademark Office (USPTO)
`
`Stuart Graham, PhD, joined the U.S. Patent & Trademark Office as Chief Economist in March
`of 2010. Before coming to the USPTO, Dr. Graham taught and conducted research at Georgia
`Tech’s College of Management on the economics of the patent system, intellectual property
`(IP) strategies, IP transactions, and the relationship of IP to entrepreneurship and the
`commercialization of new technologies.
`
`Mark E. Doms, Chief Economist, Department of Commerce
`
`Mark Doms, PhD, is the Chief Economist for the Economics and Statistics Administration at the
`U.S. Department of Commerce. Before coming to the U.S. Department of Commerce, Dr. Doms
`worked as a Senior Economist at the Federal Reserve Bank of San Francisco, and before that
`in the Research and Statistics Division of the Board of Governors. He has wide experience with
`economic and policy analysis on a range of topics and has focused his own research on the
`effects of technology adoption and innovation, on firm productivity, and on housing market
`changes.