What is on the Horizon for Patent Owners in 2018?

By Steve Brachmann
January 6, 2018

One of the questions that gets asked this time of year, when the world is busy flipping the calendar from one year to the next, is “What are you looking forward to in the new year?” For patent owners operating in the U.S., however, it may be better to ask, “What are you looking ahead to in 2018?” Looking forward would seem to denote a sense of optimism and such optimism has been in short supply among those in the tech space who don’t have the deep wallets to withstand the costs of pursuing infringers, including those costs incurred by the efficient infringer cartel’s use of the Patent Trial and Appeal Board (PTAB).

One thing that U.S. patent owners should be looking ahead to is the next iteration of the U.S. Chamber of Commerce’s IP Index. Given the lack of progress on key weaknesses noted in the Chamber’s IP index released in January 2017, it would be very surprising if the United States’ system of patent rights doesn’t slip further from its 10th-place ranking after having been 1st-place in every previous edition of the IP index. Those key weaknesses include the country’s patent opposition system which adds substantial costs and uncertainty to patent rights and a narrow interpretation of the patentability of inventions in the biotech and computer sectors. Thanks to the effects of recent U.S. Supreme Court jurisprudence in TC Heartland LLC v. Kraft Foods Group Brands LLC, it wouldn’t be surprising to see restrictions in proper venue for patent plaintiffs cited as another developing weakness to our system, especially in light of a recent Court of Appeals for the Federal Circuit decision which found that SCOTUS’ decision in TC Heartland changed controlling law, enabling retroactive motions to transfer venue for defendants.

Patent owners should also be looking ahead to see what the fallout will be from the changing Republican leadership at the U.S. House of Representatives after the retirement exodus which included announcements from more than two dozen Republican representatives who will not seek re-election in 2018. These retirements include a couple of key Republican players who have been instrumental in pushing patent reforms through Congress in recent years. In early November, reports indicated that Rep. Lamar Smith (R-TX), chairman of the House Committee on Science, Space, & Technology and co-sponsor of the Leahy-Smith America Invents Act (AIA) of 2011, had announced his retirement despite a strong re-election result in the previous cycle. Within a week of that announcement, Rep. Bob Goodlatte (R-VA), chair of the House Judiciary Committee, announced that he would also retire from the House; like Smith, Goodlatte’s re-election campaign funding for the 2018 cycle was being outpaced by a rival prior to the retirement announcement.

At first blush, these retirements might seem to give patent owners reasons to be optimistic. After all, the Leahy-Smith AIA enacted the PTAB, an agency which renders defective more than 90 percent of patents challenged through validity trials. As for Goodlatte, he had made additional patent litigation reforms a priority for his agenda during the 115th Congress and he was a champion of the Innovation Act, a bill which would have increased the risks of enforcing patent rights and chilled investment into important fields of technology. Of course, there’s still one very important player still in the field of Republican House leadership: efficient infringer ally and patent troll Rep. Darrell Issa (R-CA), currently the chair of the House IP Subcommittee. He’s an individual with an important position in the U.S. patent system who has gone on record stating that all patent plaintiffs are patent trolls. He has used his political power to attempt to influence at least one member of the independent federal judiciary in a way which prompted a scathing response from the American Board of Trial Advocates (ABOTA). In one House IP Subcommittee hearing held this June, he openly guffawed at the reality that China is pursuing a more tolerant patent policy than the United States. If the leadership void among House Republicans leads to Issa achieving an even more powerful position, smaller players in the U.S. patent system should be looking ahead to stay on top of patent system reform legislation which Issa will undoubtedly pursue.

One thing that patent owners may be able to look forward to in 2018 is growing support for stronger patent enforcement rights among conservative political groups. An open letter penned in November by 16 leaders from conservative groups noted that the Supreme Court’s upcoming decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC will be crucial for protecting patents as fundamental property rights. Many conservative leaders are concerned that a decision in Oil States supporting the patent validity challenges available at the PTAB would continue the stripping of private rights as was seen in 2005’s Kelo v. City of New London, a case which upheld a Connecticut town’s seizure of private property through eminent domain for sale to private developers which the Court found did not violate the takings clause of the Fifth Amendment. If the Court decides to side with Greene’s Energy Group and find that the PTAB’s ability to extinguish property rights in a non-Article III forum is constitutional and not in violation of the Seventh Amendment’s guarantee to a jury trial, U.S. patent owners will likely be looking ahead towards the further disintegration of their private property rights.

A decision in Oil States in favor of the efficient infringer cartel would likely only increase their lobbying efforts in Washington, doubling down on the poor rhetoric offered by representatives of the High Tech Inventors Alliance (HTIA). The HTIA includes a strong contingent of efficient infringer firms and it is publicly represented by general counsel John Thorne, an individual who had pursued a legal strategy of patent acquisition for the extortion of valuable property through legal threats while serving as senior VP and deputy general counsel of Verizon Communications, activities which would have likely resulted in a different company being branded as a “patent troll.” Thorne has also publicly misrepresented the views presented by a book on American administrative law to the point that the author of that book came out with a public rebuttal of Thorne’s statements.

Indeed, if there is anything that U.S. patent owners can truly look forward to, it may be the better prospects they face under evolving patent law in China. That country’s growing appreciation of intellectual property was in full focus last summer when President Xi Jinping commented that “IP infringers will pay a heavy price” at an important Chinese national economic forum. Through 2017, China’s federal government actively worked to address key weaknesses noted by the U.S. Chamber of Commerce’s IP Index, including historic levels of IP infringement, a lack of adherence to international standards on IP laws as well as the ability of IP holders to secure adequate remedies for IP infringement. So even if the U.S. patent system’s ranking slips even further, as many expect, China’s system seems to be improving to the benefit of foreign IP owners. Although the World Intellectual Property Organization (WIPO) likely won’t release updated statistics for 2017 until December, it wouldn’t be shocking to see patent applications at China’s State Intellectual Property Office (SIPO) increase past the record 1.3 million applications filed during 2016.

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.

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 8 Comments comments. Join the discussion.

  1. angry dude January 6, 2018 12:00 pm

    IP is not just patents but also copyrights – software copyrights in particular.

    As a creator of “computer-implemented” inventions (enabled by novel digital signal processing algorithms) it makes no difference to me how I am going to be ripped off by the efficient infringer cartel: by reverse-engineering my compiled binaries and rewriting all code from scratch (to avoid criminal copyright violation charge) or by simply cracking binaries and using them pretty much as they are without understanding underlying algorithms

    There is a dichotomy going on – the efficient infringer cartel wants to make patents weaker but copyrights stronger

    You can’t buy an illegal counterfeit copy of any commercial software on Ebay or Amazon but you can very easily buy US-patent infringing products there… after patent owners successfully defended their patents in US courts

    This is going to get much worse until it gets better..

    Without criminal penalties for willful disregard of patent rights (similar to criminal penalties for willful copyright violation) there won’t be any improvement in patent licensing and enforcement in US

    Restoring injunctions and punitive treble damages will affect balance sheets of some of the biggest US tech companies and crash US stock markets – so it will not happen any time soon under any administration whether they like SV or not

    But put couple of those big tech CEOs in jail for a week or two and situation with patent licensing will quickly improve

    And if those CEOs are outside of US jurisdiction (like Benny) then impose an automatic injunction on importing or manufacturing those infringing products in US

    The outrageous abuse of small domestic patent owners in US has to be stopped somehow or there won’t be any patent system (and patent lawyers) in US soon
    (And the definition of “small” as far as patents are concerned has migrated from “garage” inventors to operating companies with millions of dollars in the bank)
    You can’t have a cake and eat it too

  2. Anon January 6, 2018 12:55 pm

    Angry,

    We are in complete agreement here.

    (and isn’t odd that the IP that protects expression has a criminal level protection, while the IP for utility has been so badly denigrated?)

  3. angry dude January 6, 2018 1:29 pm

    Anon @2

    There is nothing odd in the fact that the biggest SV tech companies want criminal level copyright protection and at the same time virtually non-existent patent protection for software-related inventions
    This is to further tilt the playing field – big vs small
    For big tech it is expensive but quite possible to reverse-engineer competitor’s patented software/firmware/hardware and rewrite/redesign it from scratch to avoid copyright violation
    But for smaller competitors this reverse-engineering proposition is just not economically feasible, the most they can do is crack and reuse some binaries but that would be criminal copyright violation

    Thus the playing field in tech is further tilted to benefit the biggest tech monopolies like Google and Apple with resources to do anything they want

    In the absence of workable patent system the only way to tame biggest tech monopolies is anti-trust law but that’s not gonna happen either, not in this country
    Lemmings are happy to choose between two: Intel vs AMD, Comcast vs Verizon, DirecTV vs Dishnetwork, HomeDepot vs Lowes etc etc
    Forget monopolies – they call it “competition”

  4. AMETEX, INC. January 6, 2018 1:42 pm

    The article attempts to put at ease Patent Owners by saying, “when President Xi Jinping commented that “IP infringers will pay a heavy price” at an important Chinese national economic forum”. Is this like the promise and sanctions with China and North Korea?

  5. angry dude January 6, 2018 2:09 pm

    Yeah,

    and the efficient infringer cartel made sure to wrap contempt for patent system in “ideas should be free” mantra to feed it to lemmings (and paid big $$$ for that)

  6. Benny January 8, 2018 2:10 am

    Angry at 1,
    I am all in favor of imposing an injunction on importing stuff into the US which infringes our US patents. That’s what the ITC is for.

  7. angry dude January 8, 2018 11:15 am

    Benny @6

    Dude, don’t play fool

    Most high tech gets imported from China – whether by “domestic” corps like Google or Apple or by foreign corps like HTC

    I was talking about CEO’s personal accountability and jurisdiction

    For example, if you steal someone else’s copyrighted code and put it in your robotic products as is (without reverse-engineering and clean-room rewriting) that would constitute willful and criminal copyright violation
    Then who goes to jail for that and where ?

  8. Eric Berend January 11, 2018 6:15 pm

    @1., 3., 5., 7.:, ‘angry dude’:

    You are on fire here.
    Thank you for providing more explanation than your usual wont, and helping the slowcoach and willfully ignorant among us gain greater actual awareness of the true situation in this IP domain.

    Yes: so many need ‘their nose shoved in it’, to even begin to rub two neurons together, so fraught with internal obfuscation, are they. Sentiment and herd instinct carry many an otherwise sound mind off to the margins (some would say, the gutter).

    So clearly to the point at essential details, I see nothing to add (and by now, no doubt my verbosity is well known in this forum).

    Got it, nearly all, in one.
    In Golf, that’s an Eagle shot.

    Kudos, man.

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