On Thursday, July 13th, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet held yet another one-sided hearing on the topic of patent reform. Although one panel witness was able to provide substantive commentary on ways to balance the current iteration of the U.S. patent system, a good deal of that day’s discussion was railroaded by meaningless puffery on “patent trolls” provided by poor panel choices.
As was the case with the June 13th House IP subcommittee hearing on the effects of the U.S. Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, at least one witness sitting on the House IP subcommittee’s panel seemed to have no business being there in the first place. Tom Lee, a software engineer at geodata firm Mapbox, took time during his testimony to voice his concerns on “bad patents” and “patent trolls,” adding that it was “particularly galling to see efforts to weaken the inter partes review (IPR) system.”
Why does Mapbox’s viewpoint on patent litigation echo in the halls of Congress given the fact that it doesn’t appear that it has faced abusive patent litigation? In fact, it almost looks like there is no merit to Lee’s statement that “Mapbox has had multiple experiences with patent trolls: non-practicing entities who file meritless lawsuits that are cheaper to settle than to defend.” Mapbox certainly hasn’t had multiple experiences with lawsuits; going back to January 1st, 2000, Mapbox has been sued just once in a patent case according to data collected from Lex Machina’s legal data analytics service.
The one patent case Mapbox has faced as a defendant was filed last December by Shipping & Transit LLC, a company which itself has been very litigious against alleged patent infringement having been listed as a plaintiff in 172 patent suits. The one Shipping & Transit suit filed against Mapbox terminated in 92 days and has a total of nine docket items and the original complaint is all of six pages long. The only other significant activity on the docket is a motion to dismiss filed by Shipping & Transit this March. If, in Lee’s words, a prerequisite of being a “patent troll” is to file a lawsuit, then Mapbox hasn’t had multiple experiences with trolls, only the one.
“The weakness of the patents used against us has often been matched by the weakness of trolls’ claims,” Lee’s testimony reads. “In some cases, the patent’s claims have had no plausible relation to our technology.” If Lee’s right about that, then it raises some serious questions over whether Mapbox even offers the kind of geodata services it advertises to potential clients. The one patent asserted by Shipping & Transit against Mapbox was U.S. Patent No. 6510383, titled Vehicular Route Optimization System and Method and issued January 2003. It claims a vehicular route optimization system having memory storing data indicating an order that a mobile vehicle is expected to arrive at a plurality of destinations, a first communications device that communicates with a remote communications device, and then a data manager interfaced with the first device and configured to analyze data in order to determine whether to accept received requests. The patent covers technology used by Shipping & Transit’s my-ASN package tracking service. Mapbox advertises an Optimization API for optimizing multi-stop travel itineraries, but somehow it doesn’t infringe on a patent covering a vehicular route optimization system for mobile vehicles arriving at multiple destinations. Shipping & Transit’s motion to dismiss noted that the patent infringement claims were being dismissed without prejudice, meaning that the claims can be reasserted if Mapbox ever does actually provide a vehicular route optimization system as it claims it does through its Optimization API.
“It’s only thanks to a strongly anti-troll board and executive leadership that I’m able to be here today,” Lee’s testimony reads. It seems really questionable why Mapbox would want Lee testifying on viewpoints related to patents when he seemingly has very little knowledge of Mapbox’s own patenting activities. This is made evident by a Twitter exchange between Lee and Justin Cohen, IP litigator and partner at Thompson & Knight. Lee responded to Cohen multiple times indicating that he couldn’t be specific about Mapbox’s filing activities and that the firm doesn’t disclose details (despite the fact that such activities are publicly available information); Cohen noted that this was odd given the fact that Lee testified about Mapbox’s patent application filing activities in Congress and yet couldn’t be specific about them on Twitter.
“Patent litigation abuse is a real problem, and one that disproportionately targets the startups and small businesses that make up Engine’s community,” reads the testimony of Julie Samuels, the president of Engine. According to Engine Advocacy’s Form 990 filed with the IRS for 2015, Engine spent more than $1.3 million to develop “content to educate lawmakers and policymakers on issues including patent reform, network neutrality, and job growth.” Engine also worked to facilitate “conversations between high-tech startup founders and policymakers to discuss technological innovation and entrepreneurship.”
But who is financing the organization that purports to be acting on the behalf of tech startups? Well, Google, for one. Google lists Engine Advocacy as a third-party organization to which Google’s U.S. Public Policy and Government Affairs provides support, according to the Transparency page maintained by Google’s U.S. Public Policy team. It’s unclear exactly how much funding Google provides to Engine, but it could easily cover most of the nearly $1.49 million that Engine received in contributions and grants through 2015.
If Samuels’ testimony offered sensible viewpoints on how the U.S. patent system affects startups, for better and for worse, it would be easier to write off the involvement of Google, one of the stalwarts of the efficient infringer lobby. However, Samuels talks about software patent volume, including 40,000 new software patent grants annually, as “prohibitively daunting” and weakening the patent system as if an explosion of smartphone patents through the 2000s didn’t directly benefit the business boom for smartphones over the past decade. Samuels says that she speaks on behalf of small business startups in the tech space but, instead of encouraging startups to acquire patents as part of a risk mitigation strategy, she talks of infringement allegations being “particularly stifling to American economic growth and prosperity” and decries the “unreasonably vague terms” of patents in the high-tech and software space. None of this is to say that Samuels is lying when she talks about American economic growth, just that she may be more interested in American economic growth, which has grown to be more consolidated in the hands of relatively few tech giants in recent years, over the actual success of business startups, especially those with patents or licensing operations. It’s testimony like hers that would naturally lead Tom Lee to find engineers who consider it “an embarrassment” to be listed as an inventor on a patent.
There’s nothing particularly as galling about the testimony of Sean Reilly, senior VP and associate general counsel of the banking association The Clearing House. However, his appearance on the panel underscores a major problem with that day’s panel: Reilly is a representative of the banking industry, so of course he’s going to testify to the importance of keeping covered business method (CBM) review proceedings intact at the Patent Trial and Appeal Board (PTAB) even as he pays lip service to “the need for strong patent protection for innovations.” It’s someone with a limited understanding of patents who is having an outsized influence on the patent reform debate going on in Washington D.C. right now. Same with Tom Lee, a representative of a tech company who can’t even discuss publicly available information on his company’s patent filing activities. And Samuels, who should know better about the importance of patents to tech startups, instead talks about the problems inherent with “patent trolls” and testifies that “there is much work left to be done” in the interest of invalidating Constitutionally-protected property rights away. Judge Paul Michel’s testimony as an uninterested observer who also served as the chief patent judge in the U.S. is beyond reproach but it is worth it to note that Judge Michel is not an inventor or patent owner himself. Actual inventors and patent owners themselves are barely ever represented at these hearings.
Why are we having a hearing on “bad patents” hurting businesses when it’s abundantly clear that bad patent policy is draining innovation away from the U.S.? The strength of the U.S. patent system is currently ranked 10th, tied with Hungary. The weakening of the U.S. patent system is coming at the same time that China is strengthening patent rights domestically. The House IP subcommittee is led by someone who, by his own logic, is a patent troll and has used his political power to pressure a member of the federal judiciary to support patent-infringing interests in an ethically questionable manner. In light of this recent hearing, inventors and patent owners have every reason to continue to be discouraged by the U.S. patent system and the reform debate which continues to wreak havoc on their lives.