Obama on Patent Trolls – Much Ado About Nothing
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: June 4, 2013 @ 4:51 pm
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Just ahead of President Obama’s fundraising trip to Silicon Valley later this week the White House announced that the Obama Administration is taking action to address the problem of patent trolls. News outlets were touting the executive action that President Obama was going to take to put an end to the problem of patent trolls once and for all.
There is no doubt that the Obama position will be loved by Google and other Silicon Valley technology giants that despise the patent system. Given the revolving door between the Obama Administration and Google, the long-term close relationship between President Obama and Google (see here, here and here), and the fact that patent issues don’t resonate with John Q. Public, it seems likely that the President stepping in now to allow him to tout that he is engaged with issues of importance in the minds of tech giants who will be asked for large checks later this week.
But what executive action could the President really take that would make a difference?
The honest answer is that there is no executive action President Obama could take that would influence patent litigation. Still, he will be pressed by the tech giants in Silicon Valley for help dealing with what they deem unwarranted patent litigation. This has, apparently, led the White House to announce insignificant executive steps to address the so-called problem.
Of course, there is a problem with abusive patent litigation, but the problem is not nearly as widespread as the Silicon Valley elite would have you believe, nor is it isolated to the camps of patent owners seeking to enforce patents.Truthfully, Silicon Valley thinks whenever they get sued it is unjustified, but who could be against taking action to stop patent trolls? Well… those who really understand that the problem is nuanced and that litigation abuse occurs both against tech giants and by tech giants.
Yes, tech giants get sued on terrible patents that are clearly invalid and which they don’t infringe anyway, but those same tech giants settled bad claims on crappy patents while at the same time they litigate to the death good, valid patents on important technologies that they do infringe. There are few “Snow White” players in the patent litigation space, and the constant vilification of patent trolls and claims that the patent system is broken are too broad to the point that they are misleading.
By settling crappy cases the Silicon Valley elite they create a boogeyman that only the government can defeat, while at the same time they run rough-shot over true innovators who are dragged through years (or decades) of litigation. Shouldn’t they be settling and licensing good patents rather than vilifying true innovators? If they are being extorted by bad patents they don’t infringe that is a problem they have created by constantly paying bad claims. There are few guarantees in life, but if big tech continues to settle bad claims they are guaranteed to be plagued by bad claims on bad patents where there is no infringement.
So why does Silicon Valley want to weaken the patent system? Well, not everyone in Silicon Valley wants to weaken the patent system. There are numerous innovator companies, research and development companies, universities and independent inventors that understand the importance of patents. You can also look at the Silicon Valley elite and appreciate that they too once upon a time understood the importance of patents, building their dominance with rapid and generous accumulation of patent rights on important technologies. But as big companies become bigger it becomes increasingly difficult to truly innovate. IBM is a notable exception. There are others that are exceptions, but with ever more layers of bureaucracy to weed out good ideas and inventions corporate size is a detriment to maximizing innovation.
So it seems that the Silicon Valley elite have their patents and to preserve their dominance they need to make it more difficult for innovators to accumulate strong patent rights in the same way that they did. Their positions are all about maintaining their dominance, not about addressing the problem with abusive litigation. I say this with confidence because I repeatedly offer to solve the so-called patent troll problem for companies that can’t figure it out on their own and I have never had a single company even call to inquire. Obviously they are not looking for solutions, but would rather have a boogeyman they can point to in order to achieve what they really want, which is a dismantled patent system.
Regardless of the politics and business protectionism that underlies this and other efforts to solve the so-called patent troll problem, let’s take a look at the executive measures touted by the White House.
1. Making “Real Party-in-Interest” the New Default
With respect to making known the real-party-in-interest, the White House announcement stated:
Today, the PTO will begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the PTO, specifically designating the “ultimate parent entity” in control of the patent or application.
Talk about the White House being out of touch and not knowing what is going on within the Executive Branch! The PTO is not going to begin work on a rulemaking process today because the process started last year. Thus, this point is nothing more than blowing smoke and taking credit for the agency moving forward on this point more than six months ago. Indeed, on November 26, 2012, the PTO published in the Federal Register a Notice of Roundtable on Proposed Requirements for Recordation of Real- Party-in-Interest Information Throughout Application Pendency. This Federal Register Notice put a deadline of January 25, 2013 for written comments relative to requirements for recording information about the real-party-in-interest.
2. Tightening Functional Claiming
On functioning claiming the White House explained:
The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
Targeted training of examiners? This is just insulting. As if the USPTO doesn’t train its patent examiners or the patent examiners are in some way in need of re-programming.
This is laughable anyway. There are over 7,800 patent examiners and expecting them to all be on the same page at the same time when the Supreme Court in their infinite wisdom abhors bright line rules is ridiculous.
Further, re-training patent examiners will only matter if they are trained with new material and information that is different from what they are currently doing relating to functional claiming. The trouble is this is not the role of the Executive Branch. Functional claiming stems from the Patent Act (specifically 35 U.S.C. 112(f)) and the case law interpreting the statute. I just don’t see any justification under our system of government for the Executive Branch to swoop in and change well-established interpretations of a statute without amendment by Congress or a varied alteration by the Judiciary. The role of the Executive Branch is to enforce the law, not to redefine the law.
3. Empowering Downstream Users
With respect to empowering the people, the White House explained:
Today, the PTO is announcing new education and outreach materials, including an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll.
How is a plain-English Frequently Asked Questions (FAQs) page on the USPTO going to do anything substantive? This is a nearly comical feel good but accomplish nothing step. People sued by those who are engaging in extortion with crappy patents don’t need a FAQ page to tell them that they are not infringing and the patent they are being sued on is laughably incomplete. What they need is a streamlined and affordable way to band together with others similarly situated to challenge the patent in an affordable proceeding at the USPTO. So while a FAQ section is easy to put together it isn’t going to help and what would help isn’t being pursued.
And don’t give me that there are new ways to challenge bad patents. Those who are the problem seek extortion payments of $10,000, $20,000 or $50,000. The filing fee to challenge a patent after issue is many thousands of dollars and the legal fees can go well into the hundreds of thousands of dollars. That is less than litigation, but way more than an individual or small mom-and-pop can pay. So the exorbitant fees for these reviews and the complexity of the procedural rules makes them useful for those who have money in the first place.
4. Expanding Dedicated Outreach and Study
On outreach the White House explained:
Today, we are announcing an expansion of our outreach efforts, including six months of high-profile events across the country to develop new ideas and consensus around updates to patent policies and laws. We are also announcing an expansion of the PTO Edison Scholars Program, which will bring distinguished academic experts to the PTO to develop — and make available to the public — more robust data and research on the issues bearing on abusive litigation.
How is expanding the Scholars Program going to accomplish anything useful? Does the White House think that patent scholars are in short supply or can’t engage in research without the assistance of the federal government? While there are others I can point to, allow me to single out Professor Robin Feldman of the University of California Hastings College of Law, who is a frequent guest contributor here on IPWatchdog.com. Professor Feldman has been at the forefront of doing tremendous research on abusive litigation, bringing many facts to the debate. See, for example, articles by Professor Feldman. More facts are never bad, but this type of factual information and “robust data and research” is already going on in the private sector without government assistance.
As for talking about the problem, that is fine if we are really going to talk about the issues and not just pretend that patent litigation abuse is a one way street. Still, there has been ongoing and lengthy discussions within the private sector at conference after conference. More talk won’t change the reality that the Silicon Valley elite settle crappy claims and litigate good claims to the death. Similarly, more talk won’t change the fact that mom-and-pop companies are being forced to pay extortion-like payments for bad claims. Furthermore, it won’t change the reality that there are numerous non-practicing entities that are innovators that have always been the backbone of the U.S. innovation economy. In fact, none other than Thomas Edison was a non-practising entity and few, if any, would consider him a patent troll.
5. Strengthen Enforcement Process of Exclusion Orders
On exclusion order the White House explained:
[T]he U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that [Customs and Border Protection] and the
use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.
Frankly, I’m not sure what this even means. Given that President Obama supports legislation that would limit the ability of the ITC to issue injunctions I have to question how fair and balanced this interagency review will be and what such a review might hope to achieve. Big tech companies have been working to strip the ITC of jurisdiction since at least the time the ink was still wet on President Obama’s signature on the America Invents Act on September 16, 2011. I am particularly suspicious of such efforts. For more see NPE Data Does Not Support Patent Infringer Lobby, Follow the Money – Will the ITC Lose Jurisdiction? and Are Some Patent Owners More Equal than Others?- - - - - - - - - -
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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patent Troll Basics, Patent Trolls, Patents, Technology & Innovation, USPTO
About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.