Bogus claims of patent abuse must be ignored

By Gene Quinn
April 24, 2017

It is becoming very tiresome to listen to companies complain about patents while making wild, misleading, egregiously false claims of patent abuse. I realize making fraudulent claims of patent abuse captures headlines, the attention of the popular press, and interest from at as least some Members of Congress who seem hell-bent on enacting the patent agenda of the infringer lobby. As it turns out, however, patents are not the root of every evil in the world, and just because some misguided, uninformed CEO thinks patents are the problem doesn’t mean that they actually are the problem.

Increasingly, the target of those seeking to mislead through PR subterfuge are what are known as standard essential patents (SEPs). The complaints about standard essential patents are never really about patents at all . Of course, that doesn’t stop those who have made a career out of vilifying patent owners, and patents in general, from going to a very old, tired playbook in an effort to deceive. Still, no matter how much they want to pretend that their grievance is about patents, no matter how much they call the problem one of patent abuse, it will never change the truth.

So let’s shine a spotlight on the truth.

On April 20, 2017, a group of auto and technology companies sent a letter to President Trump urging him to direct the Federal Trade Commission and other U.S. agencies to do something “to address patent abuse involving standardized technologies,” which the letter goes on to explain are vital to the “nation’s innovation and economic development.”

To be perfectly clear, there is NO patent abuse occurring with respect standard setting or standard essential patents. Anyone who says otherwise is either grossly misinformed or they have an agenda, plain and simple. There is absolutely NO patent abuse, period. Not even a smidgen.

So what is going on that has these companies all hot and bothered? These companies are complaining about a contract issue, nothing more. They merely parade their complaints around as patent abuse in an attempt to both deceive, and to make it more likely the government will want to step in and tip the balance with an agency finger on the scale. After all, if it were a private contract matter it would be much more difficult to get the federal government to pick a side. So the decision is made to grossly misrepresent the heart of the problem and pretend it is something that it is not.

“We are concerned that the entire concept of open standards could collapse if SEP abuse continues to proliferate, and we’re urging the White House to take this threat to innovation and the American economy seriously,” said App Association President Morgan Reed in a press release. “The letter’s signatories own more than 100,000 patents and believe strongly in the value of intellectual property, but the issue here is companies who voluntarily committed to license their patents under fair, reasonable, and non-discriminatory terms who are reneging on those promises.”

The salient point: Reed admits this issue has absolutely nothing to do with patents, but rather the claim is that certain companies who own patents “voluntarily committed to license their patents” and those companies are allegedly “reneging on those promises.” By his own admission this is NOT a patent problem — this is NOT a form of patent abuse.

Even if everything that is being said in this letter to the President and associated press release are true, patents are not the problem. Patents are simply not at the core of the grievance. Reneging on a promise is what Reed and his compatriots are complaining about, and that by definition is a contract issue not a patent issue.

At its core the grievance complained about and paraded around as patent abuse relates to a broken promise to license on certain terms, which is a contract matter, not a patent matter. Complaining about a patent abuse when by their own admission no such patent abuse has occurred is worse than just crying wolf. Such false claims do unnecessary harm to the U.S. economy because they continue to weaken patents, which drives investors away. Those making such idiotic claims MUST be ignored.

If those companies and industry groups that signed this letter sent to President Trump are really supportive of the U.S. intellectual property system, like they claim, and believe in the value of strong patents, as Reed suggests, they will stop lying about the genesis of their grievance. At a time when the U.S. is falling behind China in innovation, Chicken Little type claims of patent abuse must stop.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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 as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 9 Comments comments.

  1. Invention Rights April 24, 2017 6:23 pm

    Good catch Gene. These are protectionists and cheaters that want to unilaterally violate the terms the license. Hopefully this post will mute their protectionist propaganda.

  2. EPA April 25, 2017 4:22 am

    Breaking a promise made in an SEP licence contract can be a form of patent abuse when the only alternatives for just accepting the breach of contract are to either infringe on the patent or to not comply with the standard.

  3. Mark Syman April 25, 2017 5:41 am

    Apparently the Alliance of Automobile Manufacturers believe that accusations of patent abuse are the silver bullet to get everything they want. It’s really a shame that asserting ownership rights of inventions is so terribly scandalous. The power of the liberal media is horrendous.

  4. Ron Hilton April 25, 2017 9:38 am

    I’m not familiar with the details of this case, but I have been involved in situations where a major industry incumbent reneged on earlier promises to license SEPs to competitors. Whether this was a patent problem or an anti-trust problem, it was nevertheless a very real form of anti-competitive abuse. SEPs do not necessarily have to be related to standard-setting organizations. Sometimes a particular technology becomes so predominant in an industry as to become an “essential facility” without which no competition in that market is possible for all practical purposes. Some kind of reform is needed to address this problem, even it does not fall under the heading of patent reform.

  5. Paul F. Morgan April 25, 2017 10:32 am

    Now that even the major auto companies are seriously working on electric or hybrid and/or semi-self-driving cars they will inherently run into many more unexpired patents, and copyrighted software. That is inevitable in major new product changes like this. They need to develop prior art libraries and retain more patent attorneys.

  6. Gene Quinn April 25, 2017 10:34 am

    EPA-

    Sorry. Wrong. You left out the REAL choice, which is to assert a claim for breach of contract. Nice try though.

    -Gene

  7. EPA April 25, 2017 11:26 am

    @Gene. That’s indeed the most appropriate step to take. But that doesn’t mean that it cannot also be patent abuse. Negotiations between an SEP owner and a (potential) licensee are inherently unbalanced. The licensee cannot hurt the patent propietor in any way comparable to how he can get hurt himself.

    An SEP patent is a very powerful weapon – and for good reasons. But with great power comes great responsibility. I don’t know the details of this case, but if there’s a breach of contract, the patent proprietor misuses his patent power to gain an unfair advantage. I can call that patent abuse without feeling any animosity towards the patent system as such. In fact, I am an active patent attorney and a huge believer in the benefits of a good working patent system.

    If you want to defend the position of patent owners against what you consider uninformed and unfair public opinions – and I have the impression that is one of the objectives of your website – it would be much more effective to take a slightly more factual and nuanced approach. In a discussion, you don’t convince the other party by shouting and insulting. Listening, trying to understand and patiently explaining your own view will work much better than a text including phrases like “wild, misleading, egregiously false claims”, “fraudulent claims”, “infringer lobby”, “some misguided, uninformed CEO”, “idiotic claims”, …

  8. Ron Hilton April 25, 2017 12:23 pm

    In the SEP case I alluded to in my first comment above, both breach of contract and antitrust arguments were employed. The US DOJ Antitrust DIvision also reviewed the case, but ultimately decided not to intervene.

  9. Eric Berend April 26, 2017 1:35 pm

    @7., ‘EPA’:

    You presume far too much.

    Where, was the very same “…Listening, trying to understand and patiently explaining…”, when it came to destroying long-established patent protections for legitimate inventors, who were deliberately excluded from the Congressional testimony parading before the public record, as faux justification for the captive interest giveaway, that the AIA truly is?

    And, when the stench of Stanford preference and power mongering at all levels of society that can be reached via their educational, political and social establishments, permeates the halls of Congress, the bureaucracy of the Obama White House; and is successfully promulgated as the obdurate ideology of its numerous Comp-Sci FOSS minions in colleges nationwide; who then proceed to form a mob incessantly bleating its self-entitled moral superiority complex against intellectual property rights – where is your precious “…slightly more factual and nuanced approach”?

    How, is this any different than the ‘3,000 tyrants, one mile away’?

    As an inventor, any and ALL new inventions that I create, are MY PRIVATE PROPERTY.

    ONLY the implied bargain described in Article 1 Section 8 Clause 8 of the U.S. Constitution, can provide a trustworthy basis for my disclosure of said invention or inventions to the U.S. public interest.Said Clause specifically mentions “…Securing…” a property right for a “…limited time[s]…”.

    And, you can explain just how a site such as this is supposed to “…convince the other party…”; when that is precisely NOT how the “other party”, being patent enemies and destroyers, managed to wrest the initiative and throw some 200+ years of sound jurisprudence into the gutter overnight – by acting like a wallflower, “playing nice”, showing ‘collegial’ respect.

    Your scolding as to our ‘proper’ demeanor, is merely more condescending advice to continue the same milquetoast response to the wholesale ruination of our traditional Constitutional intellectual property franchise. Your bogus assumption of moral authority by way of your claim that “…I am an active patent attorney and a huge believer in the benefits of a good working patent system”, means little in the face of your pollyanna advice – patent antagonists did not steal a march so completely against our interests in this space, by remaining similarly respectful as you so admonish.

    NO: it was taking advantage of just such ‘collegial’ notions of mutual respect and respectability and trampling these at every opportunity, that engendered such a fool’s stampede. And now, as Samuel Clemens once wryly observed in several famous novels, the suckers (politicians) who were played (quite deliberately deceived), now want little or nothing to do with the issue: perfect for reducing the chances of proper review – that would be, without the stench of intellectual property pirates’ influencers ruling the day – which now, won’t happen anytime soon.

    So relax: you can feel secure until the supply of disgusted and alienated inventors runs out.

    Then, you ‘sharks’ can all play out your resulting pallid echo, of what used to be a robust IP development franchise, in the United States of America.