An entirely screwed up way of viewing the world of innovation

An article, published March 24th and titled Hard Times For Patent Trolls And Challengers As Courts, Targets Fight Back, is ostensibly about recent failures of the Kyle Bass-backed Coalition for Affordable Drugs at the Patent Trial and Appeal Board (PTAB). As the author notes, March wasn’t a successful month for Bass at the PTAB, losing out on challenges to patents covering Ampyra, a multiple-sclerosis (MS) treatment marketed by Acorda Therapeutics (NASDAQ:ACOR), and Tecfidera, another MS treatment which is marketed by Biogen Inc. (NASDAQ:BIIB)

But the article, which is difficult to read at times because it talks about patent trolls trying to “enforce patents instead of knocking them out,” jumbles the Bass strategy of attempting to challenge what he believed were weak drug patents in a series of inter partes review (IPR) challenges with patent trolls and licensing entities, which are not the same according to the Federal Trade Commission patent assertion entity report. The Forbes article also throws the word “innovation” around in a casual and non-specific way, which is unfortunately all too common.

Right in the second paragraph, however, there’s already an acrid stench of anti-patent rhetoric, which may not be a completely conscious choice on the part of the writer but exists all the same. First, the author calls the business model employed by Bass “innovative.” Imagine that: A business model predicated on eliminating patents is “innovative.” It used to be that earning patents, and not eliminating them, indicated that a company was innovative. Patents used to be a proxy for innovation, now getting rid of patents and challenging patents is considered innovative.

There will no doubt be some that think we are making a mountain out of a molehill, but the way we view innovation in America has changed dramatically. When a product or process worth stealing is created the party that is considered the innovator is the thief and the party that is considered to be standing in the way of innovation is the party that actually invented the thing in the first place. What an entirely screwed up way of viewing the world of innovation!

Merriam-Webster’s dictionary defines innovation in this way: “1: the introduction of something new; 2: a new idea, method, or device: novelty.” Thus, it is rather clear that those from big-tech who rail against inventors who stand in the way of products or services freely being used for their commercial gain are the ones who are misleading the public by incorrectly defining the term “innovation,” conflating it with products or services being placed in the stream of commerce. Innovation is NOT about products in the hands of consumers or services entering the marketplace. Innovation is about advance, period. And those that copy the innovations of others are not innovators, they are patent infringers.

What makes this particular misuse of the word “innovative” truly galling is that this so-called “innovative” organization is financially viable because Bass shorts the stock of the company being targeted for patent elimination through his Hayman Capital Management hedge fund. So patents aren’t particularly innovative, apparently, but the attempt to kill patents for profit is innovative. Unbelievable.

It costs billions of dollars to develop a single successful drug and even just challenging the validity of a patent covering a pharmaceutical can cause the stock to drop, which makes money for Bass when he sells a short call in advance of the stock’s drop in price. The Forbes author goes on to acknowledge that this “innovative” business model is considered “misguided” by some. Others, however, would call it abusive.

It’s along this scatological line of reasoning that the truly disingenuous pigswill begins to pour down from the waste buckets and into the troth it has ungraciously provided for its readers. Obviously, this article was intended to just mention as many patent related buzzwords to capture search engine traffic. How else could you pivot from a discussion of Kyle Bass to a discussion of TC Heartland v. Kraft? It’s not the same type of court at all: one is about the federal judiciary, the other is an appellate board within an agency of the executive branch, which may very well be unconstitutional. And the media narrative surrounding the impact of TC Heartland on patent trolls in the U.S. District Court for the Eastern District of Texas (E.D. Tex.) is a fake news narrative, and that is being generous. Plenty of amici briefs have been filed discussing the impact of trolls in Eastern District of Texas, yes, but even the most ideologically anti-patent Supreme Court Justice, Justice Stephen Breyer, wondered during oral argument why the Eastern District of Texas has any bearing at all on the case. See page 14 of the transcript of oral arguments in TC Heartland.

Of course, that doesn’t stop Forbes from saying that patent trolls will be in trouble if the Supreme Court decides “defendants can pull cases from the plaintiff-friendly Eastern Texas district.” But TC Heartland has absolutely nothing to do with the Eastern District of Texas, or Texas, or the South for that matter. And it has absolutely nothing to do with patent trolls either! Of course, you’d never know that from reading Forbes. In fact, you’d think the exact opposite. If your patent news and information were limited to this Forbes article you’d think the Supreme Court was dealing with an issue specifically relating to the Eastern District of Texas and that the Supreme Court may issue a targeted ruing allowing defendants to pull cases from that court specifically. It is unreal what passes for thoughtful patent related commentary in the popular press.

In TC Heartland, Kraft Foods was the patent owner, and since Kraft Foods is incorporated in Delaware they made the sensible decision to sue an infringer (i.e., TC Heartland) in Delaware. Kraft is not a patent troll and they did not go to some remote, unrelated venue in search of some kind of untoward judicial advantage. Instead, TC Heartland is about a specific legal question that requires a close interpretation of federal statutes governing venue in patent cases. Without getting into the legalese, the question is this: Did actions taken by Congress in the late 1980s overrule a decision of the Supreme Court from the 1950s? TC Heartland has nothing to do with entities uninformed observers may think are abusing the patent system no matter how opportunistic patent hating crusaders wish otherwise.

There are other points in the Forbes article to critique, such as the line drawn that connects Bass’ struggles at PTAB to the patent monetization firm Intellectual Ventures or the fact that IV’s struggles in federal court somehow expose a “flaw” in the company’s strategy. Yes, that’s right, to the minds of the business gurus at Forbes, Bass’s struggles make him “innovative” while IV, an entity that actually deals with innovation, licensing technology, starting up companies and expanding upon already patented innovative technologies are not only not innovative but what they are doing is somehow “flawed.”  

If you want to call Bass’ IPR strategy “innovative” fine, even though it doesn’t fit within the meaning of that term as understood in the context of the patent and invention business. But if you are going to refer to Bass as innovative then at least have the guts to acknowledge real technological innovation and stop minimizing the hard work it takes to actually innovate from nothing and come up with a product or process worth stealing in the first place!

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Steve Brachmann

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments. Join the discussion.

  1. Tiburon April 4, 2017 1:20 pm

    “So patents aren’t particularly innovative, apparently, but the attempt to kill patents for profit is innovative. Unbelievable.”

    Just who do you think you are dealing with? Do you think these posts will affect change? Do you actually believe that you can fight Google or change their mind? They have $82B cash in the bank and growing $49m per day. By the end of this week they’ll have enough funds to cover lobbying until the end of Trump’s term (be it 4 or 8 years).

    What’s more unbelievable is the never-ending resources and effort on this site that are put into complaining about the situation without affecting any kind of change.

  2. Bemused April 4, 2017 1:38 pm

    Tiburon@1.

    Relax, Francis and loosen your girdle a bit. Its because of blogs like this and the efforts of men like Gene Quinn and Paul Morinville at US Inventor (just to name two of the folks that are fighting every day against the destruction of the US patent system) that there is even any discussion in the media and on Capitol Hill about the rights of inventors, the harm to the US economy brought about by the devaluation of patents, the harmful effects of the AIA/PTAB/etc.

    If you don’t believe that, who do you think killed the last effort on Capitol Hill at further patent destruction (i.e. so-called patent reform)? Paul Morinville visited the offices of every single member of Congress and the Senate to give them the other side of the story (the story that the efficient infringer lobby really doesn’t want heard) about innovation, patents and start-ups.

    So instead of whining about the “never ending resources and effort on this site” why don’t you just say a big “Thank You” to those that fight the good fight and leave it at that?

    B

  3. SV Inventor April 4, 2017 1:42 pm

    @Tiburon, your point is valid and Google is but one company. Consider the lobbyists who work for MS, Apple, FB, etc. But that doesn’t mean we should throw up our hands. IPwatchdog has successfully created a platform where newsworthy items can be posted and discussed so that the health of the patent system can be gauged by people who care. These posts can then be included on FB, LI G+ and Twitter. They can go viral. Ignorance abounds on the patent ecosystem but that is exactly why IPwatchdog is so important.

    As for affecting change, I have included a comment in response to another such article that if each patent attorney with courtroom experience identified a patent portfolio from a small business that would serve as a pro bono crucible to go after Google, MS, et al, that may be the most effective way to affect change. As you suggest, the big boys will only respect patents when they can learn they cannot pay their lobbyists to invalidate IP, and must pony up to the legitimate inventor.

    That can only come about by creating case work and bending legal precedent back in favor of IP by carefully choosing patent portfolios to defend all the way up to the SCOTUS. We’re all in this together, attorneys and inventors alike. We should be helping each other or in the end we’re all doing free work for Google et al.

  4. Gene Quinn April 4, 2017 1:48 pm

    Tiburon-

    You ask: “Do you think these posts will affect change?”

    RESPONSE: Yes.

    You say: “What’s more unbelievable is the never-ending resources and effort on this site that are put into complaining about the situation without affecting any kind of change.”

    RESPONSE: You can believe that if you like, but you’d be wrong. Perhaps if you opened your eyes, spent more time paying attention you wouldn’t make foolish statements.

    -Gene

  5. Tiburon April 4, 2017 2:10 pm

    Bemused @ 2 –

    Exactly my point – your hopes are in one guy visiting Congressmen offices. You are delusional to think this will compete against Google’s coffers.

    ” there is even any discussion in the media and on Capitol Hill about the rights of inventors, the harm to the US economy brought about by the devaluation of patents, the harmful effects of the AIA/PTAB/etc. ”

    More evidence of delusions. Outside of this forum, there is no such discussion. Just as AIA was passed, Google will continue to further their interests. Further patent lobbying is chump change.

  6. Tiburon April 4, 2017 2:22 pm

    SV Inventor @ 3 –

    “These posts can then be included on FB, LI G+ and Twitter. They can go viral. ”

    More delusions. Here’s but a quick example of a patent topic going viral: https://twitter.com/notch/status/671767433292750848

    In this example, Notch is the guy who sold Minecraft to Microsoft for $2.5billion without any patents. Not only are you facing Google, but they are backed by the 10’s of millions of software developers who are all able to make significant living without patents.

    “As you suggest, the big boys will only respect patents when they can learn they cannot pay their lobbyists to invalidate IP, and must pony up to the legitimate inventor. ”

    If you are suggesting as a 3rd party to invalidate Google/Waymo’s patents then how is that fair or serve to advance patents? Google is the innovator here and needs those patents against Uber! Besides, patent lawyers are in it for themselves, they’ll complain on this site but they never bother putting their money where there mouth is. Google has too much cash and could easily fight these IPR’s!

  7. Bemused April 4, 2017 2:27 pm

    Tiburon@5

    “Exactly my point – your hopes are one guy visiting Congressmen offices. You are delusional to think this will compete against Google’s coffers.”

    Actually, that statement cuts against your nonsensical rambling. That one guy did derail Google’s efforts in the last round of patent reform.

    And contrary to your simple-minded allegation that outside of this blog no one is having any discussion about the AIA, there are many folks on Capitol Hill and beyond that are starting to see the light.

    Case in point: Several of President Trump’s advisors have argued against patent reform (including the idiotic Innovation Act) and have espoused pro-patent positions. The Heritage Foundation (which carries a significant amount of weight with conservative legislators) has come out forcefully against sweeping patent reform that would further weaken the patent system, and has also informed conservative members of Congress that they would be graded on their votes on patent-related bills.

  8. Gene Quinn April 4, 2017 2:43 pm

    Bemused & SV Inventor-

    It seems that Tiburon wants to believe that nothing I write or publish matters. There are two possibilities: (1) He/she is not informed; or (2) He/she is a part of the infringer lobby and just trolling here. While over the years many people have wanted to believe that what gets published on IPWatchdog.com doesn’t matter, those in the know understand the reach and influence. It seems odd that someone would complain that our efforts don’t matter. What is the conclusion? I guess we should just give up. I suspect Tiburon is from the infringer lobby and just trolling.

    As for Paul Morinville, he has been tireless. He and his organization have absolutely influenced minds in DC and across the country.

    -Gene

  9. step back April 4, 2017 3:12 pm

    Every idea starts as a trickle.

    Who knows?

    Maybe some Supreme Court clerk reads this site ….
    And starts wondering if his boss is getting “Fake Science” from the uncross-examined “friends” of the court?

  10. Anon April 4, 2017 3:15 pm

    As far as I can tell, Tiburon is only interested in FUD (even while admitting the gamesmanship of the likes of monied interests against innovation).

    I am reminded of Shakespeare’s “The lady doth protest too much, methinks.”

  11. Jeff Lindsay April 4, 2017 10:53 pm

    The folks who use big money and crony influence fear the power of individuals speaking the truth. Truth and wisdom from the brave mouths of a few can sometimes turn the tide against gargantuan, wealthy groups. Getting them to give up, to abandon hope, to shut up and feel their cause is hopeless is Priority #1 for the corrupt and powerful. Thank you, Gene and Steve, for your voices!

  12. Anon April 5, 2017 7:14 am

    Well stated Jeff.

  13. Independent Inventor April 5, 2017 5:38 pm

    Individual voices don’t matter against the entrenched?

    Tell that to Gandhi.

    Tell that to Dr. Martin Luther King.

    Tell that to Jesus Christ.

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