Google General Counsel’s Clarion Call for U.S. Patent System Reform Should Not Be Heeded

“Google has filed the third-highest number of petitions for AIA validity trials at the PTAB. Google isn’t filing those petitions to improve American innovation, but rather to evade legal liability for infringement and thereby protect its own corporate revenues from legitimate inventors.”

https://depositphotos.com/56433917/stock-photo-chiang-mai-thailand-september-17.htmlOn April 28, Google’s General Counsel Halimah DeLaine Prado authored a post published on Google’s official blog to voice concerns felt by one of the world’s richest corporations that the U.S. patent system is currently in a state of growing crisis. The post offers several suggestions, each sanctioned by Google, as to steps that can be taken in all three branches of the U.S. federal government to address patent quality, abusive litigation and forum shopping.

Unfortunately, the proposed reforms would help very little, if at all, toward improving certainty and clarity in patent rights in a way that would actually improve American innovation by supporting small startups and individual inventors in our country. Indeed, any informed observer of the U.S. patent system would recognize that Google’s proposed reforms would instead do a great deal to advance Google’s own business interests ahead of those startups and individual inventors who need the patent system to work in order to survive.

Unsubstantiated Claims About Declining Patent Quality Should Raise Questions

Prado’s post begins by tracing Google’s history as a corporate steward of the U.S. patent system, including its role in founding the License On Transfer (LOT) network, establishing the Open Patent Non-Assertion (OPN) Pledge in 2013 and providing technical support to the Prior Art Archive. Prado touts the 42,000 “home-grown” patents authored by Google engineers, Google’s licensing of those patents at what readers are assured is a “fair value,” and the sale of patents to bolster the IP portfolios of smaller businesses to provide evidence of Google’s bona fides as a sage interpreter of patent law and benevolent overseer of small business interests.

Having established Google’s great superiority in understanding the proper role of patents, Prado’s post goes on to bemoan how “the American patent system is increasingly failing to promote the cause of innovation and progress.” The evidence of this failure is an unsubstantiated claim that patent quality in the United States is declining, a claim that is hyperlinked to a Colleen Chien article, which concludes by noting “one of the major problems with improving patent quality is our inability to measure it.” [emphasis added] Of course, as Google has been a great benefactor of the U.S. patent system (see above), we should be able to take their word for it that patent quality is on the decline.

Google’s issues with patent quality are sharpened by what Prado calls “a rising tide of wasteful patent litigation.” Prado insists that patent litigation has increased by 46% between 2018 and 2021, but this claim is linked to a litigation report from RPX that analyzes non-practicing entity (NPE) litigation campaigns, petitions for America Invents Act (AIA) trials at the Patent Trial and Appeal Board (PTAB) and a great deal of other data; it’s near impossible to determine where Prado’s 46% increase in patent litigation figure comes from in the RPX data. Worse, RPX Corp. is notorious for keeping its data secret, thus preventing any independent third parties from vetting for accuracy.

Prado next paints this alleged increase in a way that plays on the natural prejudices people have against the legal system by claiming it is proof that abusive litigation is threatening America’s innovation engine. Readers are warned about the return of the “patent troll,” an entirely prejudicial term that immediately casts any company enforcing rights against infringers as fairy tale scum. No patent trolls are named, which was ultimately smart on Prado’s part, as the business models employed by companies monetizing patent assets usually play a legitimate function in the complex world of technology licensing.

Google Wants Governmental Action to Protect Corporate Profits from Patent Plaintiffs

Of course, Google has a few suggestions for righting the sinking ship of U.S. patent law. In the Executive Branch, Prado encourages policymakers to invest in the USPTO, which she says often doesn’t have enough resources to prevent “invalid patents getting issued to inventors.” Leaving aside the fact that any 2L should be able to see the logical inconsistency of a right already being invalid at the time that it is granted (although in the world that Google wants, all competitor patents would most assuredly be dead on arrival), Prado’s claim plays right into the nebulous patent quality argument that is a perfect game for Google to play: patent quality is impossible to measure, but the higher it goes, the fewer patents in force that Google must contend with. It’s a claim that has nothing to do with improving American innovation, which would be improved by enabling a wider swath of our economy to participate in the patent process by reducing prosecution costs and eliminating Section 101 judicial exceptions, and everything to do with protecting Google revenues by making it harder to obtain enforceable patent rights.

Next, Google wants the federal judiciary to do something about the gamesmanship among patent plaintiffs that has allegedly led to forum shopping, resulting in 25% of all patent lawsuits being filed in a single U.S. courthouse. Finally, Prado hits upon a statistic that is easily vetted and turns out to be true. Though she never mentions it by name, she’s obviously speaking about the Waco Division of the Western District of Texas, which is headed by U.S. District Judge Alan D. Albright. The problem for Prado here is that anyone who has a robust understanding of patent law knows that Judge Albright has a reputation for being a very fair-dealing judge with a wealth of knowledge in patent matters. Western Texas also includes Austin, TX, which has a burgeoning high tech sector, and San Antonio, the seventh-largest city in America, and these TC Heartland-friendly factors, coupled with Judge Albright’s expertise, are perfectly reasonable explanations for the rise of patent litigation in Waco that arguably have less to do with gamesmanship and more to do with the interest that all patent litigants, both plaintiff and defense side, should have in obtaining a fair trial.

Why Talk About One Leahy PTAB Bill Without Discussing the Other?

Finally, and perhaps most brazenly, Prado urges Congress to take legislative action to restore Google’s access to validity trials at the PTAB by removing the USPTO’s discretion to deny petitions challenging patents that are in infringement proceedings in U.S. district court, where essentially the same validity challenges are often raised by defendants. Prado insists that this bill would curb abusive litigation, but the truth is that the Restoring the America Invents Act would overrule the NHK-Fintiv discretionary denial framework at the PTAB that Google and other Big Tech cronies have already failed to overturn through several avenues, including a lawsuit alleging violations of the Administrative Procedures Act filed in U.S. district court. Legislative reforms to the PTAB that Prado’s post does not discuss include an upcoming bill from Senators Thom Tillis (R-NC) and Patrick Leahy (D-VT) to reduce the ability of petitioners like OpenSky Industries to extort patent owners with schemes that manipulate legal processes. This, unlike the vast majority of patent suits filed against entities like Google, is actual abuse of the U.S. legal system, and it’s conveniently forgotten by Google’s General Counsel despite the fact that Leahy is also a co-sponsor of the Restoring the America Invents Act.

One need not squint hard to recognize that Google is addicted to the release from infringement liability, and the PTAB serves as Google’s methadone clinic. After all, Google has filed the third-highest number of petitions for AIA validity trials at the PTAB. Google isn’t filing those petitions to improve American innovation, but rather to evade legal liability for infringement and thereby protect its own corporate revenues from legitimate inventors.

One can’t fault Prado for pushing her employer’s company line: Google is one of the largest companies in history and the tech giant needs the easy ability to invalidate competitor’s patent rights in order for its business model to continue working. But her post discusses none of the real abuses that are actually going on in the U.S. patent world, such as petitioner extortion of patent owners at the PTAB; it fearmongers about the prospects for American innovation based on claims that are barely substantiated; and it urges governmental action that only serves to increase the difficulty of obtaining and enforcing patent rights for all patent owners. The only new, useful and nonobvious methods that Google has invented in the last decade plus are novel ways to push public opinion in favor of policies that make it hard for anyone to compete with Google in the marketplace, and the company’s General Counsel just provided the world with an excellent opportunity to point that out.

In response to Prado’s post, USPTO Director Kathi Vidal offered the following statement:

As I noted in my Day One public message to stakeholders, which provides a link for engagement with the USPTO, the USPTO invites input from all stakeholders. We invite it in any form, whether through press or from individuals reaching out. It is important that we dialogue on the key issues so we can shape our innovation ecosystem to bring more innovation to impact, while curbing opportunistic behavior. We can all agree that all of us – including the USPTO – need to play a role. The USPTO will do its part by issuing robust and reliable patents. You will see more on that soon, though long-term sustainable efforts will take new thinking from all, and additional input from stakeholders and deliberation. I’m confident that, together, we can make real change.

 

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Author: 2nix
Image ID: 56433917 

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9 comments so far.

  • [Avatar for Anon]
    Anon
    May 3, 2022 10:47 am

    As noted in the weekly summary piece that included a small reference to this story:

    Over the years, Google has worked to ensure that the United States patent system continued to spur new inventions and technologies.

    Excuse me, but HOW exactly?

    Is this tied to those meeting-minute LESS private meetings under Director Lee?

    Sorry, but “Supporting that balanced approach, we were one of the first companies to pledge not to sue any user, distributor, or developer of open-source software on specified patents, unless first attacked.” has nothing to do AT ALL with making patent examination better.

    Zero.

    Another hint: relying on misinformation from an academic like Chien is a non-starter.

    The rest of that self-serving slop sounds in the Orwellian 1984, which cements Google’s transformation of Evil of “Do no Evil” to “Be Evil.”

    See: https://www.ipwatchdog.com/2022/04/29/barks-bites-friday-april-29-scotus-denies-petition-substantial-similarity-tests-google-decries-rising-tide-patent-litigation-china-concludes-first-drug-pate/id=148757/

  • [Avatar for Curious]
    Curious
    May 3, 2022 09:20 am

    Don’t ever forget how Google was able to overturn a huge infringement case, “Vringo vs IP Internet”, after Goog and a few other huge techies were hugely beaten by a 12-person jury 12-0 on every single charge.
    The two judges ruling for Google were Mayer (I’ve never met a software patent that I didn’t think was invalid) and Wallach (I’m an expert in war crimes and the law of war so why am I sitting on a patent court?). Unfortunately, patent law in the United States is decided by people who aren’t qualified to either prosecute or litigate patents.

    And these judges exemplify why politics matter little in patent law. Once judge was appointed by Reagan — the other by Obama.

  • [Avatar for Tim]
    Tim
    May 3, 2022 08:58 am

    CURIOUS,
    Reading your response I failed to mention. Not only did Vringo own the patents of the Adwords program Google and others were using, but the inventer was working for Vringo at the time of the lawsuit. The opposing attornies “time after time” went back to the USPTO and I guess this was the “IPR” you spoke of? And Vringo prevailed every single time. After such a huge win, we shareholders took an unacceptable loss as we saw how dirty things are in our legal system. Vringo lost everything and the symbol is now XSPA and they administer Covid tests at airports, the stock did about 3 reverse splits and is now about $1.00 a share! Thank you Appeals Ct Judge (former Army JAG) Mayer.

  • [Avatar for Tim]
    Tim
    May 3, 2022 08:42 am

    Don’t ever forget how Google was able to overturn a huge infringement case, “Vringo vs IP Internet”, after Goog and a few other huge techies were hugely beaten by a 12-person jury 12-0 on every single charge. The little Vringo was prepared to receive huge royalties and comps. “However” Google told the others, “We got this”, and went to the Appeals Court and 2 of 3 judges “decided” to toss the case, as the only computer literate “Judge Chen” (former head of USPTO) highly dissented. Vringo took the case to the Supreme Court with Attorney David Buies. Where the court wouldn’t even bother with the case. Amazing?

  • [Avatar for Curious]
    Curious
    May 2, 2022 08:02 pm

    Ms. Prado complains that “[t]here are 677 federal district court judgeships in the United States. But many companies suing over patent claims are gaming the system.” Google likely has between 80-90% penetration of all US households. In most instances, that would expose Google to being sued in just about any federal court. However, because of the vagaries of patent law, Google is able to get a substantial portion of those suits transferred to the ND Cal — a court known for making it extremely easy to invalidate patents.

    Google isn’t trying to make the system fair. If it was fair, plaintiffs would be able to sue just about anyplace Google has a substantial presence, which is EVERYWHERE. Rather, Google wants to ensure that they get to maintain the homecourt advantage that they have been enjoying for quite some time now. Google wouldn’t be able to maintain the obscene profit margins and the massive wealth transfer to their gazillionaire owners if they actually had to pay for the technology that they appropriated from others [for zero cost].

    Ms. Prado also complains about the IPR system, which was put in place by the AIA (what I like to call the America Infringes Act). The IPR system was enacted in a way that allows third parties [wink, wink, nod, nod] to impose tremendous costs on owners who own, as Ms. Prado puts it, “the small subset of patents with the greatest impact on our economy.” In other words, if the patent is valuable, Google (or one of Google’s proxies) or a company like Google will file IPR after IPR after IPR after IPR until they can get the right panel at the USPTO to invalidate the patent. As I have written many times, if the patent owner wins an IPR they are actually a loser because winning merely means that they get to face another IPR, and another IPR, and another IPR until they eventually lose. In fact, there is a cottage industry popping up in which patent owners of valuable technology are being extorted through the use of IPRs by companies that merely refile (with minor changes) old IPR requests. It costs a tremendous amount of money to defend against an IPR, and these companies that challenge patents know it.

    However, companies such as Google don’t worry about getting their patents invalidated by the IPR system. When the likes of Google come calling a potential licensee about taking a license for their patented technology, Google doesn’t just assert a handful of patents. Rather, Google is in a position to assert hundreds or even thousands of patents. No company is in a position to challenge that many patents. Consequently, the IPR system is rarely being used to challenge Google’s patents. Using Unified Patents search engine, I was able to determine that Google was the petitioner (i.e., challenger) in 456 IPRs. On the other hand, Google’s patents were only challenged 3 times. In 2021, Alphabet (i.e., Google) had 2015 issued U.S. Patents, which was the 17th highest total. In 2020, Alphabet had 2379 issued patents, which was the 15th highest total. Google has something on the order of 51,000 world-wide patents, and my guess is that about 40,000 of those are in the US. Regardless of the number, it seems odd that only 3 of Google’s patents have been challenged using the IPR system — well, it only seems odd if one thinks that the IPR system was intended to be fair.

    And speaking of being fair, Google isn’t the only Big Tech company that takes advantage of the IPR system. Apple has been the challenger 827 times where Apple’s patents have only been challenged 10 times. Facebook has been the challenger 144 times and has only been challenged 10 times. Microsoft has been the challenger 276 times and I wasn’t able to identify any times in which a Microsoft patent was challenged (i.e., the number is zero, zilch, nil, nada). For Amazon, the numbers are 106 challenges to 0 challenged. For Sony, it is 136 to 19. For Dell, it is 129 to 17.

    As these numbers amply show, the IPR system was designed to be a way for mega-companies to invalidate the patents of and/or bankrupt smaller companies who cannot afford repeated IPRs while having their own patents essentially go unchallenged. It is no wonder that Google’s General Counsel is complaining that the IPR system has been “weakened.” The IPR system was a grand giveaway to Big Tech, and Google seems offended that all the lobbying money they paid to get that system enacted is being wasted by certain individuals at the USPTO who believe that the IPR system is being abused.

    The title of the post by Google’s general counsel reads “Reforming the patent system to support American innovation.” It would have been more accurate if it read “Reforming the patent system to support Big-Tech’s profits.”

  • [Avatar for Pro Say]
    Pro Say
    May 2, 2022 04:42 pm

    Thanks Steve, for your powerful, fact-based indictment of Prado’s self-serving, unsupported, off-the-rails post.

    “Reforming the patent system to support American innovation” she claims?

    Had she been truthful: “Reforming the patent system to further weaken American innovation”

    Have you no shame Prado? How do you sleep at night in your bed of lies?

    Indeed, this post could have just as easily been written by steal-everything-they-can-get-their-hands-on Communist China.

    Imagine that. Big Tech wants the same things China does . . . China wants the same things Big Tech does.

    Yet even worse than this is that too many members of Congress, the media, and the don’t-know-enough-to-understand public actually falls for this nonsense.

  • [Avatar for Model 101]
    Model 101
    May 2, 2022 04:08 pm

    More crook stuff!

    I’ve heard it all.

    Throw the bum out!

  • [Avatar for mike]
    mike
    May 2, 2022 03:36 pm

    This piece is vital to correct the narrative. Thank you Mr. Brachmann.

    Leaving aside the fact that any 2L should be able to see the logical inconsistency of a right already being invalid at the time that it is granted (although in the world that Google wants, all competitor patents would most assuredly be dead on arrival), Prado’s claim plays right into the nebulous patent quality argument that is a perfect game for Google to play: patent quality is impossible to measure, but the higher it goes, the fewer patents in force that Google must contend with. It’s a claim that has nothing to do with improving American innovation, which would be improved by enabling a wider swath of our economy to participate in the patent process by reducing prosecution costs and eliminating Section 101 judicial exceptions, and everything to do with protecting Google revenues by making it harder to obtain enforceable patent rights.

    Nailed it.

  • [Avatar for Night Writer]
    Night Writer
    May 2, 2022 01:30 pm

    Yes this is more of the same nonsense that has decimated the patent system. The reality is that patents being expensive clunky messes is perfect for giant monopolistic corporations and worthless for the average inventor.