IP Review

A bipartisan bid to boost IP creation in the US via a modernised tax credit for hi-tech research and development (R&D) is underway in Congress. In a letter of 25 February, Democratic Congresswoman Anna Eshoo and Republican Congressman Michael McCaul pushed for an updated bill to replace a prior R&D tax credit provision that expired at the end of 2009.

Citing the potential economic benefits that could spring from fresh legislation, Eshoo and McCaul's letter was addressed to several Congress leaders, including House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. Eshoo and McCaul argued that the original R&D tax credit had proven to be 'one of the best methods to encourage investment and employment in the United States, especially in the area of high technology'.

Continuous R&D, they said, 'is a vital element of America's innovation economy and international competitiveness', adding: 'Many other nations already offer generous research tax incentives and the US must not fall behind in research-intensive fields. We must do what we can to keep our hi-tech, cutting-edge businesses competitive and headquartered in the United States.'

According to Eshoo and McCaul, the expiration of the previous credit, while unfortunate, 'does provide Congress with an opportunity to modernise and expand [the credit] in a way that will stimulate innovation and create more jobs'.

By responding to current economic conditions, the petitioners argued, a modernised R&D credit 'would lead to an additional $90bn in annual GDP; a significant increase in patents generated by American inventors; and the generation of additional revenues for the Treasury through economic growth'.

Eshoo and McCaul issued the letter as co-chairs of the Congressional Hi-Tech Caucus. In addition to hearing briefings from industry leaders, educators and government officials on a variety of technology issues, the group acts as a forum in which interested parties can share ideas and dialogue. The caucus's main aims are i) to improve the US high tech sector, ii) to expand job growth and iii) to raise American competitiveness.

'In the past two years,' the pair added, 'the Democratic and Republican leaders of the tax-writing Ways and Means Committee have authored or cosponsored efforts to expand the R&D credit. With this bipartisan support for the initiative, we believe it should be part of any future efforts considered by Congress this year to spur economic growth.'

While 117 House signatories endorsed the letter, parallel developments in the Senate indicated that moves to reform US patent laws could be back on track. Introduced in 2006, the US Patent Reform Bill has since been subject to heated debate and voting in both areas of Congress, but stalled last year over its provisions for damages in the event of infringement. However, Senate Judiciary Committee chair Patrick Leahy – who spearheaded the bill – said that he was nearing a deal over the provisions with fellow committee member Jeff Sessions.

'We are close to a comprehensive Patent Reform Bill that benefits all corners of the patent community,' said Leahy. A full announcement of the details is pending.