What is a bad patent? Congress has established the requirements for obtaining a patent. The patent office grants a patent to applicants when they meet those requirements. It is simple. No trolls involved. If there are bad patents, then either the law is bad, or the patent office is not following the law when they grant the patents.
Is the patent office issuing patents that do not meet the requirements set forth by Congress in the Patent Act?
Or is the Patent Act too generous in setting forth the conditions for granting a patent?
It must be one or the other. This subcommittee should focus there, not on the inventors and their licensors who are following the law.
I followed the law with all of my inventions. I have received 6 patents for my Bunch O Balloons invention. They were diligently and thoroughly examined by the patent office, signed by Michelle Lee and Joe Matal. They met the demanding standard for a preliminary injunction – no substantial question of validity – 4 times in district court, including an affirmance at the Federal Circuit. Are these bad patents? The infringer’s attorney’s certainly think so.
Roman Chistyakov, David Furry, Alex Severinsky, Gene Dolgoff, Tom Lanni, Alfonso Cioffi – these inventors and their licensors followed the law and the patent office followed the law when they granted their patents. Of course attorneys for infringers like Ford, FLIR, Fujitsu, Toshiba, Gillette, Epson, Sony, and Apple think they are “bad patents”. Thousands of other legitimate inventors are labeled “trolls” by big infringers and their supporters, and suffer the harsh laws and policies targeted to fend off the imaginary creatures.
Naturally, infringers believe every asserted patent is a “bad patent”.
Tom Lee of Mapbox presumably believes that Martin Jones’ patent for his logistics notification invention is a “bad patent”. But Martin followed the law – he did not lie, cheat, or steal to get his patent. In fact the docket shows that Mapbox resolved the dispute over Martin’s patent in only a matter of weeks without filing a single brief. Either it was not a “bad patent”, or it was so bad it was no problem at all. Perhaps Tom Lee can enlighten the subcommittee as to which case it is.
The infringer of my patents was not so easy to deal with – as I have incurred over 1300 docket entries, spanning 2 and half years, and $17M in expenses.
Sean Reilly thinks that the patents asserted against The Clearing House were “bad patents”. But no one knows. Was Leon Stambler’s patent for his 1992 invention for encrypted payments a “bad patent”? Seems like a pretty amazing idea considering it was only months earlier that Tim Berners-Lee had created the worldwide web. That litigation was cleared up after a mere 48 docket entries, a fraction of the cost occurred in any single one of my patent disputes.
Or perhaps Mr. Reilly is referring to Claudio Ballard’s 1997 check imaging invention. He and his licensor Data Treasury Services followed the law at all times. His patent turned out to be prescient and valuable to the global financial system, pretty much the opposite of a “bad patent”. There is a recurring theme that “bad patents” are the ones for inventions that a big corporation wants to use without consent of the owner.
I urge the subcommittee to dig deeper into the statistics and anecdotes that allege bad patents are harming businesses. In the vast majority of cases, the complaints don’t hold up under scrutiny. The fact is that the current environment for patent owners is so hostile that no one dares to enforce a genuinely bad patent. The vanishingly few – single digit – patent owners that attempt to enforce facially bad patents are not a problem for business. Their cases are quickly terminated on summary judgment with award of attorney’s fees to the defendant.
More importantly, if the problem is misdiagnosed, there are serious unintended consequences – namely further weakening and erosion of confidence in the entire patent system such has occurred with the Patent Trial and Appeal Board. Rather than rooting out the undefined “bad patents” the PTAB has placed a cloud over the title of every patent, the good and the bad. With the PTAB holding over 90% of issued patents invalid, inventors and investors cannot predict whether any patent is good or bad. In many cases the PTAB disagrees with the examining division and/or the district court, so even after a final decision no one knows which patents are good and which are bad. The question is whether the patent complies with the statute. The parties don’t agree on the answer, and neither do the officials! So no one knows whether a patent is good or bad anymore.
Should the subcommittee determine that there are indeed bad patents that are negatively affecting American business, then it must proceed to identify the source of the bad patents. If there are bad patents then either the law allows “bad patents” to be granted, or the patent office is not following the law.
I submit that this is not the case, but that inventors 10 and 20 years ago had some really good inventions, and Congress should not rush to the aid of the users of inventions that don’t like the patent law. We are working through the vestiges of the internet revolution, but our patent system has transcended many technology revolutions. A generation from now there will be complaints that speed-of-sound commuting and diabetes cures were obvious. This is the forgotten purpose of the patent system – to stimulate creative risky visionary individuals to discover new solutions to problems. Congress must work to maintain the integrity of duly issued patents. Any alleged problems must be correctly diagnosed and any legislation must target the cause. Inventors and their licensors that follow the law are not the problem.