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Obama on Patents: The One-sided USPTO Patent Litigation Beta


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: February 26, 2014 @ 8:00 am
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Last week the Obama Administration announced a series of new Executive Actions and updated the industry on progress relating to previous Executive Actions relative to the patent system. See White House Announces Patent Related Executive Action. One of the line items in this announcement related to the creation of a Frequently Asked Questions (FAQ) section on USPTO.gov. Essentially, the White House announced the launch of what they refer to as an “online toolkit” aimed at answering common questions and providing information about patent lawsuits. The aim of this section of USPTO.gov is apparently to help consumers understand the risks and benefits of litigation or settlement so they can pick their best course of action.

Several things jump out at you when you visit this section of USPTO.gov, which is labeled as a BETA. First, although the section of the website falls under “litigation” and is found at uspto.gov/patents/litigation, all of the information is aimed at accused infringers, giving them advice about what they can and should do. Nowhere do I see any information or links to helpful resources that would be useful for the many hundreds of thousands of patent owners who routinely have their rights infringed, sometimes willfully. No, this “help section” is purely intended to provide help to those accused of infringement as if they are all victims.

It is almost incomprehensible that the Patent Office would put together a litigation resource that ignores the reality that many companies, both large and small, trample on the rights of innovators who have spent large amounts of time, money and energy to receive a patent and disclosing their innovation to the world. Indeed, the inconvenient truth is that many innovators simply do not have the resources to enforce their legitimately obtained and examined patents. Many of those innovators make up the backbone of the U.S. economy and in large part embody the American Dream. Yet, the Patent Office only offers a one-sided help section that gives advice to infringers and sets a tone that comes across as anti-patent and anti-patent owner. This strikes me as fundamentally misguided and clearly demonstrates the anti-patent bias of the Obama Administration.

It is clear that the Obama Administration views the world through the eyes of those getting sued or threatened and not through the eyes of the countless inventors who have their rights trampled without the possibility of recourse. While it is fine to empathize with those who are wrongly accused and frivolously sued on meritless claims, I would expect the federal government — the Patent Office that is charged with an important Constitutional duty — to be even handed and empathetic to innovators and patent owners as well.

At the risk at assuming the worst and the mischaracterization of my position, allow me to point specifically say this: It is not wrong for the Patent Office to provide useful information about patent litigation. I am full well mindful of the reality that there are bad actors using patents as the substantive weapon underlying their chosen form of litigation abuse that leverages the inefficiencies of the federal judiciary and the Federal Rules of Civil Procedure specifically. Bad actors erroneously and egregiously allege infringement where none exists, and that is a problem, although the problem is not nearly as bad if you actually look at all the facts rather than carefully selected and parsed facts typically relied upon by those who vilify patent trolls and patent owners as if the two terms are synonymous. See Why NPEs Lose Less Often Than Operating Companies and GAO Report Unmasks Mythical Problem of Patent Trolls.

Of course, only the most ideologically driven individuals would refuse to accept the reality that abusive actions go both ways in the patent arena. We all know that large entities fight patent wars of attrition seeking to outlast patent owners. We also know that many large entities will settle the garbage cases but litigate for a decade or more any case where there is a solid patent and clear infringement. The abusive practices are different and neither are laudable. But the problem with the public discourse on the topic, if you can call it that, is that those with an anti-patent agenda have largely hijacked the debate and have seized the linguistic high ground. Listen to them and every defendant is some combination of Snow White and Little Red Riding Hood all rolled into one. Just minding their business and out of no where pure evil attacks. You can probably almost hear an evil laugh tract, the voice of Vincent Price, in the background.

Unfortunately, the definition of a “patent troll” has devolved to in many corners simply mean a patent owner who files a patent infringement lawsuit. See Who is a Patent Troll? But overwhelmingly patent owners who bring lawsuits are not bad actors, they are operating companies and those who devoted substantial amounts of time and energy to researching and developing innovative technologies. Without a meaningful, credible threat of a lawsuit against infringers there is little to no chance of being appropriately compensated for infringement as the patent laws explicitly authorize.

The unfortunate, and all too often untold reality is that many large companies that infringe refuse to negotiate or even respond to letters that make legitimate inquiries about infringement or that suggest licensing or acquisition talks. You can go to virtually any panel presentation on which in-house lawyers sit and hear stories about them “circular filing” letters they receive and gleefully explaining that they simply refuse to respond to anyone about anything until a lawsuit is filed. That is, of course, their prerogative, but such unified positioning means a lot of creative, ingenious  innovators are simply out of luck unless they can afford to hire a patent litigator or are lucky enough to find contingency representation.

It would be extremely helpful if the USPTO and Obama Administration would acknowledged this reality and provide some helpful insights for those inventors and entrepreneurs. After all, while the USPTO is supposed to serve the public interest they are also supposed to serve the inventor communities. The USPTO is always happy to take inventor filing and other fees, and they are continually happy to cash maintenance fee checks during the lifetime of the patent. If the USPTO is going to have a FAQ that provides helpful litigation information the very least they could do is make it a content neutral FAQ section that addresses both sides of the abuse equation. I don’t think that is asking too much from the government.

But the lack of a content neutrality that recognizes patent litigation realities isn’t the whole picture. If you look at the links to outside resources you find a bunch of links that point to anti-patent, pro patent busting websites, which seems extremely curious to say the least. Then when you factor in that there are no links at all on the resource page to anything that is remotely pro-patent or pro-inventor it is downright bizarre and disheartening.

For example, the resources page has multiple links to the following websites and resources:

  • AskPatents, which explains their mission as to “find[ing] prior art on dangerous and overly broad US Patent Applications before they become issued Patents.”
  • RPX, which explains that its goal is to provide “strong, broad-based defense against wasteful patent litigation.”
  • Trolling Effects, which appears to be a group supported but the Electronic Frontier Foundation and PUBPAT, both entities that are well known as being anti-patent.
  • Electronic Frontier Foundation legal assistance page; an entity that proudly touts their patent busting and zealotry against what they characterize as “bogus software patents.”
  • The Patent Troll Defense Network, which is “a nationwide group of law schools, law students and lawyers, working together to provide free legal services to app developers and other small entrepreneurs that are threatened by patent trolls.”
  • The Patent Tool, which has the following welcome message on its homepage: “I’m Steph Kennedy, and I hate patent trolls. I dislike them so much, in fact, that I write a blog… to make tremendous fun of them, and to call them out on their bad behavior every chance I get.”

There is no reason to begrudge anyone their point of view, but the law has chosen and continues to choose a different ideology than expressed by most of the aforementioned resources. The law encourages inventors to file patent applications, requires the Patent Office to issue patents where appropriate and authorizes exclusive property rights that can specifically be enforced when there is infringement. The grand bargain in exchange for disclosure is at least a fair chance to get a patent and if the invention is new a right to exclude others for a limited time. If the grand bargain becomes obsolete then innovation will be driven under ground into the waiting arms of trade secret protection and no one benefits.

We all know that there are abuses. There are some patent owners who engage in “extortion-like” activity, as the federal courts have recognized. There are others that engage in misrepresentation and near fraud, as the New York Attorney General has gone after. These are the bad actors. If we must use the term “patent troll” is should be reserved for those who engage in nefarious actions and abuse the litigation process. But we need to also be mindful of the reality that not every patent owner is a patent troll, and calling a university, federal laboratory or research and development company a patent troll is breathtakingly stupid.

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Innovators need to be celebrated not vilified. At the direction of the Obama Administration it seems that the Patent Office has bought into the hysteria surrounding the “patent troll debate,” which is really more of a patent owner lynching. Justice, fair-play and common sense require the Patent Office to take a more even approach to this issue.

Of course, some will say that the Patent Office has struck the appropriate balance and are demonstrating no anti-patent bias, but the answers to the questions shines light on the ideological nature of this project. For example, if you look at the answer to the question about what the accused infringer’s options are upon receiving a demand letter the Patent Office doesn’t even allow for the possibility that the demand letter is legitimate and the recipient is infringing. One clear option that is not listed, or even suggested is this: Stop infringing. Yet at the same time it is never suggested that the accused infringer might want to consider modifying their behavior the Obama Administration does suggest they consider suing the patent owner, saying: “You may want to explore suing the patent owner for a declaratory judgment stating that you do not infringe the patent claims, or that one or more of the patent claims are invalid.”

Another disturbing thing about the FAQ section is the answer to the question “do I need a lawyer?” The USPTO says:

In the American legal system, as an individual or a small business owner, you are not required to have an attorney represent you, when negotiating with a patent owner that accuses you of infringement. Moreover, advice and representation by attorneys is expensive, and may not be necessary if you are convinced that the claims in the patent demand letter are without merit.  You may also not need an attorney to perform some straightforward interactions with the sender of the letter, such as requesting greater clarity about the nature of the claimed infringement. However, the assistance of an attorney can be valuable in assisting you with communications with the patent owner and in determining the strengths and weaknesses of the allegations against you.

While the answer does eventually get to the point saying that it might be useful to contact an attorney, do you think that the patent neophyte, the person who this page is aimed at, believes that the Patent Office is really suggesting that is a good idea? Of course not! For crying out loud the advice given here says that you might not need an attorney if you are in the right and being wrongly accused. Unbelievable! How exactly is the neophyte accused infringer supposed to know that they are being sent a demand letter without merit?

Further, the USPTO advices that you really don’t need an attorney to contact the patent owner and ask for greater clarity. That advice would be laugh out loud funny if it weren’t so clearly, blatantly and objectively bad advice. If an attorney gave such advice it would boarder on malpractice. You should NEVER contact the other side on your own. Nothing good can come of the contact and if they really are one of the nefarious actors that are rightly characterized as a patent troll they don’t care if you don’t infringe! They don’t care if the patent they own has claims that are invalid on their face!

There is indeed useful background investigation that can be undertaken by the accused infringer, as recently outlined by John Martin here on IPWatchdog in the article Sued by Patent Trolls? How to Respond to Demand Letters. Innography also offers a free webinar on defending against patent trolls. These suggestions together with information gained from the Lex Machine demand letter analysis tool can be quite helpful, but for goodness sakes don’t think you are going to talk your way out of a lawsuit.

Arming yourself with information ahead of contacting a patent attorney makes a lot of sense, but actually reaching out on your own without representation is a disaster waiting to happen and every attorney worth their salt knows that to be true. Of course, at some point in time those accused might not be able to afford an attorney, I get that. The advice that should have been given is this: “Upon getting accused of infringement in a demand letter before you contact the patent owner you should first seek a consultation with an experienced patent attorney who can appropriately advice you. If you can afford to hire an experienced patent attorney you should.” If and only if hiring a patent attorney is completely out of the question should an accused infringer ever consider representing themselves.

The problem with the USPTO beta FAQ is that it is only offers one side of the issue.  The FAQ offers one viewpoint from one side of the issue, makes questionable suggestions and offers no balance. That is a problem when the source is the federal government, which should aspire to be neutral.

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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patent Troll Basics, Patent Trolls, Patents, USPTO

About the Author

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.

 

7 comments
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  1. Gene,

    While I recognize that you and Hal Wegner have differences of opinion on occasion (PCT leadership, for example), he too posted on his email blog the oddity of certain powers having what appears to be an undue influence factor with the executive agency, including the Beta connections as well as the closed-door meetings with the powers to be.

    Since “nature abhors a vacuum,” I am beginning to suspect that the vacuum of leadership at the top of the Patent Office (no actual Director – another of Hal Wegner’s pet peeves) has in reality been filled by a power player who has the power but does not want the title. The title would bring a spotlight that this person in power seemingly does not want.

    We have the earmarkings of corruption all over the patent office.

    From a president who mouths “transparency” and provides only selective transparency to a vacuum of visible and duly appointed and properly vetted leadership, to multiple and quite visible signs of “agency capture” that rivals any of the banking scandals that defined agency capture in recent history, to a rabid display of propaganda and purported crises (the so-called “Troll” hysteria).

    I just wonder what it will take to break the camel’s back. What will it take to – in a KSR jigsaw puzzle analogy – to put all the obvious pieces together like a jigsaw puzzle.

    This much political smell does not arise in a vacuum. Something causes the stink. That something needs to be cleaned up.

  2. Interesting about accused infringers not having to get a lawyer.

    It wasn’t that many years ago when an infringer who did not have in hand a thorough opinion from a qualified, unbiased lawyer who was found to be an infringer was almost automatically deemed a willful infringer, liable for treble damages.

  3. This is laughable :):):)
    advice to “accused infringers” :):):)

    The real corporate infringers know all too well what they are doing and what they risk – right now practically nothing…

    The current ridiculous situation with patent holders suing end consumers for pennies was created by large corporate patent infringers themselves – it’s much less risk to sue couple hundred of end consumers (small businesses without legal representation) than to be involved in multi-year multi-miliion dollar litigation with corporate monstrosity with uncertain end result (let’s face it: patent infringement litigation in US is a crap shoot)

    Make patent infringement litigation faster and cheaper regardless of the size of parties involved, make the outcome inevitable (no eternal reexams and appeals) and those end consumer lawsuits will go away and so will the FAQ Obama
    (hm… I had different f-word in mind)

  4. angry dude,

    I fully agree with the non-angry (and quite rational) aspects of your post.

    Making patents weaker and making patent infringement to be on par with contract law’s efficient breach will only create more ‘problems’ in the system.

    Not that I put problems in quotes because it is still the law that ‘use’ is a strict liability patent infringement offense – no matter how small the entity is that commits that use.

    Stronger (and thus more certain) patents is the far better road to choose.

  5. Re your comment that “only the most ideologically driven individuals would refuse to accept the reality that abusive actions go both ways in the patent arena” I recently collected several examples of “defendants behaving badly,” see:
    http://www.ipnav.com/resource-center/ideas-and-insights/patent-lawsuit-defendants-behaving-badly/

    It’s also ridiculous that the website doesn’t provide greater emphasis on the point that not all demand letters are extortion rackets and not all lawsuits are based on weak patents. It should say that clearly the first step is to determine whether the patent is valid and whether you infringe. If it is and you do, you should take a license…

  6. “…Many of those innovators make up the backbone of the U.S. economy and in large part embody the American Dream”
    Reality check? In my field, none of the patent applications I’ve seen which were filed by independent inventors had any commercial value. All of the patents in my field describing genuine technological advances are assigned to companies which invest 7 or 8 digit figures annually in R&D.
    That doesn’t mean we can ignore a patent holder if he doesn’t have deep pockets, it’s just that in my field of vision these are a minority of cases.

  7. This comes as no surprise in view of the Obama Administration’s communist agenda. Very soon we’ll have to change the country’s name to United Socialist States of America. People get the government they deserve. Even the media has been silenced through bribes and/or threats.