Have you bought into the hype and hyperbole associated with the so-called “patent troll problem.” If you have then you are no different than the many others throughout the country who now believe it is self evident that patents are bad and patent owners are evil. Innovators are being portrayed as a devil in disguise doing nothing other than tormenting large corporations who are wholly incapable of defending themselves.
You have to admire how thoroughly successful the propaganda campaign to demonize innovators has been. It has been successful beyond even the wildest imagination. Sure, there are bad actors that are abusing the litigation system, making money exploiting judicial inefficiencies, but the scope of the problem has been extremely overblown. In the process innovators who require patent protection have been cast as the lead villain. Watching innovators be vilified for pursuing the American dream has been both difficult and surprising.
It is truly a shame that so many have bought into the demonization of patent owners without any critical thought. In order to believe the narrative emanating from certain Silicon Valley giants you would have to believe the existence of helpless multinational, multi-billion dollar companies on their knees and wholly incapable of defending themselves against despicable independent inventors, diabolical universities, and monstrous scientific researchers. After all, looking to find a cure for cancer, or trying to figure out how to clean up the environment, or invent the next great kitchen gadget that will be the darling of QVC by definition makes someone vile, immoral, corrupt and down right sinful! A real devil in disguise!
So do you really believe in the altruism of huge multinational corporations who find it impossible to compete against a bunch of garage inventors, university startups and researchers looking to save the planet? The story of the benevolent multinational corporation who is unable to compete because of the patent system seems even less believable than the existence of a giant apelike hominid that lives in the Northwestern United States. At least there have been sightings of Bigfoot, which is more than can be said for the helpless multinational, multi-billion dollar corporation held hostage by devilish innovators.
I don’t hold a grudge against those that are promoting the need for still further patent reform that will continue to weaken patent rights. I think in American everyone should have the ability to lobby to convince elected officials to act in a favorable way. It is, however, a shame that there is not a more even handed approach and thoughtful consideration of the issues that takes into account all sides of the issue.
Patent Masters Symposium
Sometimes it is important to know what is going on behind the scenes. Roundtable discussions led by top thought leaders covering what is happening in the Courts, on Capitol Hill, and at the USPTO.
CLICK HERE for INFORMATION
Of course big corporations who have all the money will spend to get laws and regulations enacted that are favorable to them, but at what point do their complaints start to sound alike the little boy who cried wolf? Frankly, that should have happened a long time ago. Year after year the well-funded entities that want a weaker patent system keep coming back asking for more, both in the halls of Congress and in courtrooms across the country.
Doesn’t it seem strange to anyone that these corporations always explain that they need one reform or another to address the problem of “patent trolls”? Give us X so we can once and for all be rid of the patent troll plague they say. Over the past 10 years they have received practically everything they have asked for, little by little chipping away at the very foundation of the patent grant, which is supposed to be an exclusive right. Yet, year after year they keep coming back and saying that they need more. If the solutions that they so desperately need represent the silver bullet they claim then why do they still have a problem with patent trolls?
Ten years ago the industry asked the Supreme Court to prevent permanent injunctions in patent litigation even after the patent owner had established that there was ongoing infringement and the patent survived every challenge mounted by the infringer. The Supreme Court complied and that significantly tilted the balance away from patent owners and toward infringers. Without a realistic fear of a permanent injunction facing them large corporations largely started ignoring patent rights. But still the problem of the villainous patent owner continued.
In 2007, the United States Court of Appeals for the Federal Circuit, issued a ruling in In re Seagate Technology, which created a new standard for establishing willful infringement and enhanced damages. The Seagate standard has made it virtually impossible to demonstrate willful infringement, and virtually impossible to obtain treble damages. Many consider this a good thing since prior to this ruling willful infringement was alleged in virtually all patent litigations, with the plaintiff seeking triple damages. Regardless of your point of few there is little debate that Seagate again substantially shifted the playing field away from patent owners and toward infringers. Still the problem of the villainous patent owner continued.
When you combine Seagate with eBay you are left with a situation where even a victorious patent owner cannot get an injunction preventing infringement despite the fact that a patent is allegedly an exclusive right that gives the owner the right to prevent others from engaging in proscribed activity. Further, even if the infringement is intentional there is no feasible way to get anything other than a reasonable royalty. So why exactly would anyone choose to do anything other than infringe? Seagate and eBay make infringement more than convenient, they make infringement efficient in the business sense. Sue me and all I wind up paying you is what I would have paid you in an arms length negotiation. Of course, they know many won’t sue because they can’t afford to sue, particularly given the largely insignificant damages that are available in most situations.
Also in 2007, the United States Supreme Court issued a ruling in KSR v. Teleflex, which fundamentally changed the law of obviousness, making it harder to obtain patent protection. The Supreme Court’s decision in KSR essentially says that if you set out to accomplish something and you do accomplish what you set out to achieve then the resulting innovation is obvious. Of course, that is ridiculous because under such a standard only accidental innovation would be patentable, and even more astonishing given that the ruling as announced directly conflicts with the 1952 Patent Act and more specifically the last sentence of 35 U.S.C. 103(a), which was specifically added to the statute to overrule Supreme Court precedent that required a flash of creative genius in order for an innovation to be considered non-obvious.
Make no mistake, even though the Supreme Court’s decision in KSR has never been implemented as it was written we do have a version of the flash of creative genius test in play today. Anyone who doubts this can simply review Federal Circuit obviousness decisions from the last several years. It matters not that a patent examiner issued a patent, or that the reexamination unit multiple times reexamined a patent, or that a district court Judge has reviewed the claims and multiple juries believed the claims patentable. Obviousness is in the eye of the beholder and there are many Judges on the Federal Circuit that simply do not find patents that attractive. Still the problem with villainous patent owners continues.
In 2011, the Congress enacted the America Invents Act (AIA), which ushered in the largest changes to U.S. patent law in history. Many will point to the switch to first to file (from first to invent) as proof that innovators have taken another hit. The truth, however, is that for years the U.S. had a de facto first to file system and virtually no inventors could ever prove that they invented first when they filed second. But that doesn’t mean that innovators didn’t get the short end of the stick in the AIA, because they certainly did. It just didn’t come as the result of first to file.
Two major changes ushered in by the AIA are dramatically anti-innovator. First, little talked about is the fact that foreign filed patent applications are now, in almost all cases, prior art against U.S. applicants as of their foreign filing date. Prior to the AIA that wasn’t the case. While this is probably an esoteric patent prosecution issue, it is one that has enormous implications for virtually every patent application filed in the United States. More will qualify as prior art if your application is examined under the AIA than would be applied against it if pre-AIA law applied. That necessarily means it is harder to obtain a patent.
Second, the creation of a host of new procedures to kill issued patents through a variety of post grant proceedings has caused many to wonder when a patent ever matures into a property right any more. The Patent Trial and Appeal Board at the United States Patent and Trademark Office has wreaked havoc on patent owners, killing many claims and costing patent owners many hundreds of thousands of dollars to defend rights obtained through what must have been a horribly faulty examination process.
But still the problem of the villainous patent owner continues and defenseless multinational, multi-billion dollar corporations need yet further patent reform, which is why the House of Representatives again submitted the Innovation Act for consideration, which would shift fees, stay patent litigation and strengthen post grant review from the challengers perspective.
When you combine KSR and the AIA you have a scenario where patents are harder to obtain and much easier to challenge. And we haven’t even talked about the patent eligibility cases decided over the last 5 years at the Supreme Court and Federal Circuit which have rendered everything from board games to software to genes to medical diagnostics patent ineligible.
Do you see a pattern? At each and ever step patent rights have eroded, but still the villainous patent owner problem persists. Why have none of these radical, fundamental changes to the patent laws have worked? They were all supposed to solve the problem, but they must have all failed if the helpless multinational corporations continue to need protection. Could it be that the problem never really existed, at least on the scale we were led to believe? Could it be that the offered solutions were really a thinly veiled attempt to fundamentally change the patent system so innovative startups couldn’t compete? Inquiring minds should be asking these and many other questions.
Something tells me that even if the Innovation Act were to become the law the problem of the villainous patent owner would still continue, and those that want to dismantle the patent system would continue to cry foul. It seems pretty obvious that we are in a never ending patent reform cycle and the proponents of patent reform will not be satisfied until the patent system has been thoroughly dismantled and patent rights aren’t worth pursuing.