The Collapse of U.S. Patent Policy by a Supreme Court preoccupied with Patent Trolls

The Supreme Court has been so concerned about patent trolls that in decision after decision concern over the chaos wrought by patent trolls has been explicitly discussed by the Court and explicitly lamented. As if to say “not on our watch” the Supreme Court has made bad policy decision after bad policy decision, which has driven the American patent system to the brink. All the while the Court never once had the opportunity to decide a case involving a patent troll, whoever a patent troll is and whatever the term means.

While pontificating from on high, this Supreme Court has consistently violated the most fundamental rule of American appellate jurisprudence— decide the case in front of you on the record alone. Indeed, this Supreme Court, which is allegedly conservative by ideological affiliation, has been aggressively activist. Making policy decisions is not what a court on any level is supposed to do, particularly so when there is no effective review and the decisions effectively eviscerate what is constitutionally supposed to be a co-equal branch of government actually tasked with making laws and setting policy.

Appeals courts are not supposed to go outside the record, they are supposed to decide the issues presented on the facts presented. Yet this Supreme Court has consistently looked outside the record, accept facts presented for the first time in amicus briefs as true despite never being subject to scrutiny. Indeed, the New York Times has explained that Supreme Court “opinions are increasingly studded with citations of facts they learned from amicus briefs.” Moreover, the Supreme Court has over and over concerned themselves with patent trolls (see eBay v. MercExchange, Halo Electronics and Commil USA, LLC v. Cisco Systems, Inc.) despite no patent owner ever even being alleged to be a patent troll in a single case before the Court. And let’s be honest, TC Heartland was all about patent trolls and attempting to make it more difficult for patent owners to sue in the Eastern District of Texas, but the patent owner in that case was Kraft Foods, hardly a patent troll.

This means U.S. patent policy has been corrupted by a Supreme Court preoccupied with a boogeyman not present in a single dispute they were asked to adjudicate. This means this Supreme Court has allowed a carefully crafted PR narrative to influence virtually every patent decision over the last 12 years when many in the industry believe the patent troll nothing to be nothing more than an opportunistic phantom created by a relatively small number of companies hell-bent on weakening patents to the point where they are simply not enforceable.

This is humorous — in a tragic comedy sort of way — given how the Roberts Court has repeatedly pontificated about how appeals courts should defer to district courts judges who are on the front lines. Apparently, that doesn’t hold true with respect to the concern over patent trolls. Apparently, the Roberts Court thinks they know better about what constitutes the type of abusive behavior and bad actor than does the district court judges who actually have a front row seat for the action. If there is abusive behavior the Supreme Court should encouraging district court judges to use their powers under 35 USC 285, 28 USC 1927, and Rules 11, 26, 30 and 37 of the Federal Rules of Civil Procedure, as well as any number of precedential cases that authorize the awarding of attorneys fees to address litigation abuses, such as but not limited to discovery abuses and knowingly engaging in misrepresentations. Encouraging district court judges to use more of the tools at their disposal is the proper approach, not deciding cases based on information outside the record and based on concerns about hypothetical bad actors not involved in the case.

The Supreme Court has been duped by propaganda that even the Obama FTC did not buy. Indeed, the Obama FTC set out to issue a report finding patent trolls to be villainous, to support President Obama’s speeches and policies, but instead wound up concluding the use of the term patent troll is unhelpful and misleading because it mischaracterizes patent owners from the outset in a way that trivializes a complex issue and winds up being routinely incorrect. So, the American patent system and innovation advantage has been forfeited to Europe and China because of a narrative and characterization that is misleading to say the least.

The net result of the past 12 years is a patent system and set of laws where the Federal Circuit is perfectly correct, based on the law, to observe that no matter how significant an innovation is there are simply some innovative advances that are not patentable in America. That is as disturbing as it is correct, and we have only the Supreme Court to thank for this utterly remarkable turn of events.

Between 1952 and 2011 everything made by man under the sun was considered patent eligible. America had an expansive view of what was patent eligible while other less enlightened nations placed restrictions on the types of innovations that could be patented. But today we have come full circle. The United States increasingly forbids patents on cutting edge biotechnology, medical, software, analytics, big data mining, artificial intelligence and other innovations. For this we have only the Supreme Court to thank.

Of course, as the American patent system burns Congress watches. While the Supreme Court is directly responsible for a series of decisions that have fundamentally changed the face of America’s innovation policy and future, Congress is complicit through inaction.

It is time for Congress to stand up to the Supreme Court and reclaim dominion over America’s innovation policy and future. We can’t rectify the egregious errors of the past, but we must learn from them and change our future.