The committee concludes that the U.S. patent system, while functioning reasonably well in many respects, most importantly in its rapid accommodation to technological changes and its flexibility in dealing with differences between technologies, is exhibiting a number of characteristics requiring attention and improvement.

• Although it is not clear that the quality of most patents has declined significantly, there are reasons to be concerned about whether many patents in leading-edge technologies that are drawing substantial investments represent desirable degrees of novelty, utility, and non-obviousness. This appears to be a function both of pressures on the examination process and of interpretations of some patent standards.

• There are remediable features of the U.S. patent system that undermine its function in disseminating technical information.

• Delays and costs entailed in resolving questions of patentability, the validity of issued patents, and infringement, although in some respects comparing favorably to those in Europe and Japan, excessively compound the uncertainty surrounding innovation.

• Difficulties accessing the patented technology necessary to sustain the progress of biomedical research and therapeutic product development have in some cases raised the cost and modified the character of research and in a very few instances have become a serious obstacle. This may become a more significant problem with the greater complexity of research and proliferation of patents on technologies well upstream of commercial products, and in the aftermath of a recent federal appeals court decision denying fundamental research protection from patent infringement liability.

• Although progress has been made in harmonizing national patent systems, substantial differences in procedures, standards, and substantive law remain and impede achieving reciprocity or mutual recognition of patent search and examination results among the United States, Europe, and Japan.

• In interpreting the Eleventh Amendment to the Constitution, the United States Supreme Court recently raised a troublesome disparity between state and private institutions with respect to their obligations under federal intellectual property law.