One of the real problems with the debate over patent litigation abuse is that it hasn’t focused on litigation abuse at all. Instead, the debate has focused on attempts to characterize patent owners with pejorative labels, such as calling anyone who has the audacity to seek to enforce their rights a “patent troll.” Unfortunately, the term “patent troll” has evolved to mean “anyone who sues me alleging patent infringement.” This has lead the media, the public and Members of Congress to incorrectly believe that there is a “patent troll problem,” which has influenced decision-makers all the way from Capitol Hill to the United States Supreme Court, who increasingly seems to be deciding patent cases with one eye firmly on what is a completely non-existent problem.
You have probably heard the narrative start something like this: there is an explosion of patent litigation. The objective reality, however, is that there has not been an explosion of patent litigation. The Government Accountability Office, after an exhaustive review of patent litigation, concluded that there was no patent litigation crisis. The same GAO report also found that 80% of the patent lawsuits filed are brought by operating companies suing other operating companies. Thus, those who profess there to be rampant problems associated with patent trolls and non-practicing entities suing for patent infringement are simply telling a tale that the factual data doesn’t support.
More recently Lex Machina has come forward with some eye opening statistics as well. A recent report from Lex Machina concludes: “Plaintiffs filed 329 new federal patent cases in September 2014, a 40% decrease from the 549 cases filed in September 2013.” Indeed, if you dive deeper into the 2013 and 2014 statistics you see that through the first nine months of 2013 there were 4,548 patent infringement lawsuits filed, but during the first nine months of 2014 there were only 3,887 patent infringement lawsuits filed, which represents a 15% reduction in patent litigation in 2014 compared with 2013. Furthermore, in 7 of the 9 months during 2014 there have been fewer patent infringement lawsuits filed during 2014 than during 2013. The statistics and independent GAO report just do not support a narrative that proclaims there to be a run away problem with patent litigation run amok.
Professor Richard Epstein (left) and Professor Adam Mossoff (right).
Innovation and entrepreneurship are integral to America’s economic strength, and the U.S. patent system has been critical to nurturing this innovation economy. Yet, there are some who continually argue that patents are a hinderance to economic development and the march of innovation. It will come as no surprise to anyone that I don’t believe that to be true. In fact, if you actually look at he hard, cold facts objective individuals would all agree that the a patent system fosters innovation. Patents do not hinder innovation.
What may surprise many readers, however, is that there are actually several well regarded academics who actually agree that the patent system fosters innovation. Yes, that is nearly heretical. Legal academics frequently take positions that would lead to the whittling away of patent rights. Those academics simply ignore the realities that exist in countries where there are no patent systems. They also ignore the reality that innovators require a reasonable rate of return in order to pump money into research and development. In some cases it is many millions, even hundreds of millions of dollars that need to be invested. It is naive to believe that anyone would spend millions or hundreds of millions of dollars without any competitive advantage. If a free rider could just copy and sell for less the creator would lose everything. That is not a model for success. It is a recipe for failure.
On Sunday, September 30, 2012, Timothy Lee of Ars Technica wrote a terribly researched and demonstrably erroneous article attacking the Federal Circuit titled How a rogue appeals court wrecked the patent system. The article is a cheap shot, factually inaccurate and just plain embarrassing. Lee concludes the Federal Circuit is at the heart of all problems in the patent system, which is, itself, simply not true. Of course, conclusions are not evidence and if he could have backed up what he was saying with any kind of factual, true information then it would have been a matter of opinion. Instead, he was wrong about pretty much everything he wrote.
If most reporters knew anything about patents they would be embarrassed to have their names professionally associated with the drivel they try and pass off as news. But media ignorance of patents specifically and intellectual property generally is nothing new. Errors are so easy to document that it is virtually impossible to take them seriously. But then every once in a while an article crosses the line even for a know-nothing anti-patent zealot masquerading as a journalist.
Indeed, few articles have struck a nerve in me quite the way that a recent Ars Technica article did. The article is titled How a rogue appeals court wrecked the patent system. It is a cheap shot, factually inaccurate and embarrassingly incorrect “news” story that concludes the Federal Circuit is at the heart of all the problems in the patent system. A real Pinocchio tale.
How did the media get to such a low place, where sensationalism means more than truth? Once upon a time the media was viewed as a bastion of truth and integrity. They were viewed by the Founding Fathers as the virtual fourth branch of government. A free media would offer checks and balances against the three co-equal branches of the federal government, and by keeping the people informed would keep government in check. Oh how the mighty have fallen. There is hardly any such thing any more as a fair and objective media outlet. Simply put, truth doesn’t matter to the media. That which passes for news is full of errors, inaccuracies and outright lies. The public is being deceived, and in our little space the deception seems to be part of a coordinated effort to destroy the patent system as we know it.
Many inventors operate under the misunderstanding that getting a patent is like owning Boardwalk and Park Place in the popular board game “Monopoly.” Increasingly, many journalists and patent haters are operating under the same fallacious assumption. The carelessness with which the patent right is characterized by so many with only the vaguest of knowledge of the patent system leads to truly unfortunate consequences. Inventors believe that if they obtain a patent the world will back up a money truck to their front door. Patent haters think that a patent is evil and interferes with innovation. Both claims are laughably naive.
First, I am an unapologetic defender of the patent system, which is hardly news to anyone who reads IPWatchdog.com. Those who argue against a patent system and say that patents inhibit innovation are intellectually bankrupt; willing to say anything no matter how wrong to achieve what they predetermined to be the preferred outcome. There is no talking to the anti-patent community because they simply ignore facts and reality. They prefer to wrap themselves around academic thought experiments rather than real, verifiable truths. They ignore the undeniable facts that when a country adopts a patent system economic progress follows. They balk at the mind-boggling successes of initiatives such as Bayh-Dole and argue for it to be dismantled, apparently convincing themselves that 7,000+ high-tech start-ups with millions of new jobs would have been created under the previous patent licensing regime which had been an abysmal failure by any objective standard.
Earlier today on the Twitter blog the company announced that later this year it will implement what they are calling the “Innovators Patent Agreement,” which they claim will ensure that patents are only used for defensive purposes. Without any evidence Twitter claims that software patents impede innovation. Those familiar with the anti-patent software community well know that their claims that patents impede innovation are always without any evidence. All of the objective evidence points directly to the opposite conclusion, but anti-patent forces can’t be troubled with facts and reality. But that isn’t the worst part! Twitter seems to be attempting to mislead patentees into donating patent rights that can at Twitter’s discretion be used offensively if Twitter feels threatened.
Before moving forward to address the Twitter Patent Scheme, allow me to dispense with the nonsense that patents of any kind impede innovation. For those who do concern themselves with facts and reality I invite you to read:
The problem with software patents isn’t that they are granted on obvious innovations, but rather that those who spend so much time complaining about them are just about completely clueless, at least with respect to patent law. It borders on the comical to observe some of the apoplectic rants against software patents, which almost universally conclusively prove that the person writing (or ranting) has not read past the title of the software patent in question. That is, of course, assuming they have even looked at the patent and are not merely mimicking what they have read from some other equally clueless and irresponsible critic.
Frankly I am getting rather sick and tired of those who oppose intellectual property protections ignoring the overwhelming truth that patents and other forms of intellectual property are a net positive for society. These anti-patent and anti-intellectual property zealots purport to present objective facts, but if you look at their reports there is never anything other than conjecture and speculation.
For example, on January 24, 2011, an article in the Chronicle of Higher Education exclaimed: “A new study released today indicates that overly complicated and restrictive patenting practices, and scientists who do not fully share information and materials, are creating a research bottleneck at the corporate level that could soon hinder work at dozens of universities.” The trouble is when you look at the “study” you notice it really wasn’t a “study” at all. The report is devoid of a single fact or concrete observation. The report is nothing more than the opinions of a panel of supposed governmental and academics experts. In fact, it is just a “consensus statement” that makes numerous recommendations without any factual support. Those familiar with the gene patent challenges in the Courts will not be surprised that the extraordinarily intellectually dishonest Robert Cook-Deegan was a member of the supposed panel of experts.
Mass hysteria seems to have been unleashed on the Internet and directed toward Amazon.com for patenting social networking. Some of the Internet media have suggested that Amazon has patented Facebook, but it is apparent that virtually no one has read the patent (U.S. Patent No. 7,739,139) past the first sentence of the Abstract, which is really the only thing that gets quoted in most of the stories on the Internet.
It is truly sad that massive anti-patent hysteria can be whipped up simply based on a single sentence in the Abstract of a patent. For crying out loud people, the Abstract is hardly considered to be a part of the patent application and has absolutely nothing to do with the exclusive rights granted. The claims are what defines the exclusive right, nothing else! But we will never get the anti-patent types to ever read a claim because they are just too difficult to understand and there are way too many details. WAKE UP! That is the point! The more details in the claim the more narrow the rights!
J. Craig Venter, PhD., Founder, Chairman & President of JCVI
Researchers at the J. Craig Venter Institute (JCVI), a not-for-profit genomic research organization, recently published results describing the successful construction of the first self-replicating, synthetic bacterial cell. The team synthesized the 1.08 million base pair chromosome of a modified Mycoplasma mycoides genome. The synthetic cell is called Mycoplasma mycoides JCVI-syn1.0 and is the proof of principle that genomes can be designed in the computer, chemically made in the laboratory and transplanted into a recipient cell to produce a new self-replicating cell controlled only by the synthetic genome. This research will be published by Daniel Gibson et al in the May 20th edition of Science Express and will appear in an upcoming print issue of Science.
According to the Wall Street Journal, this synthetic, self-replicating, one-cell organism was created at a cost of $30 million, and will open the way to the manipulation of life on a previously unattainable scale. Funding for this research came from Synthetic Genomics Inc., a company co-founded by Drs. Venter and Smith. While the announcements do not mention patent applications or issued patents, the Synthetic Genomics website does clearly say that it has its own intellectual property portfolio and also has “exclusive access to new inventions and discoveries in synthetic genomics research developed by the JCVI under the Sponsored Research Agreement between both organizations.” Not that I begrudge anyone who invents, protects and exploits, but can you imagine the firestorm that a genetically modified, self-replicating, synthetic bacterial cell will cause among the anti-patent movement? Given that it would not exist without substantial human intervention, and funding, as long as this organism is new and nonobvious (which is seems like it must be) it will be patentable. I can already picture the frenzy, and the foaming at the mouth!
Earlier today Dale Halling, of Halling IP and State of Innovation Blog, brought to my attention an article on the IAM Magazine Blog from a few weeks ago. Joff Wild of IAM blogged about a study conducted by IPVision, Inc., which focused on analyzing the intellectual property positions of over 9,000 US venture capital backed technology companies. The study was conducted with the assistance of faculty at the MIT Sloan School of Management, and not surprisingly determined that there is a strong correlation between intellectual property assets, particularly strong patent portfolios, and success. In fact, the IPVision study shows that VC-backed technology “[w]inners are many times more likely to hold intellectual property than losers.” Further proof that those who due to ideological reasons forgo pursuing a patent portfolio are dooming themselves, and their investors, to an unnecessary uphill struggle right from the start.
This is an article that I have been wanting to write since at least June 2009, and on a snowy and cold day in Northern Virginia, where folks are snow bound due to closed roads caused by high drifts, what better day to write about the 7 deadly sins, right? OK, there is really no connection to snow and the 7 deadly sins, at least in so far as I can tell, but as I search for a topic to write about I came upon this note to myself, which simply says “7 deadly sins relate to motives.” It was in Houston in June 2009 that this revelation (pun intended) came as a result of dinner and a few drinks with John White. John and I were on the road to teach the PLI Patent Bar Review Course and enjoying an Italian dinner with some red wine. As we often do, our conversation ranged from politics, to law, to patents, to innovation and beyond. Somewhere along the way we started talking about software and the anti-patent crowd, and then the conversation got really interesting.