A Tale of Two Googles: Patent System Champion or Crux of the Problem?

“These two counterpoints are difficult to reconcile, but it is important to be truthful about what they are: the self-serving statements of one of the biggest companies in the world vs. the warnings from a respected jurist who has no personal stake in the matter.”

Google - https://depositphotos.com/2600112/stock-photo-thumbs-up-and-down.htmlOn April 28, Google published a blog by their general counsel, Halimah DeLaine Prado, about the crisis condition of the U.S. patent system. Prado portrays Google as a strong supporter of the patent system, citing their history in initiatives to spur new inventions and technologies. For example, Google was a key player in 2013 in starting the Open Patent Non-Assertion Pledge (to not sue on open-source software). Google was also instrumental in the beginnings of the License On Transfer network (which helps members who have been sued by “patent trolls”). Google has provided technical support for the Prior Art Archive. Prado notes that Google has 42,000 patents, which she says they license at “fair value,” and sell to grow the portfolios of other companies, all in the interest of small businesses.

Prado declares that the U.S. patent system fails to promote innovation and progress, citing poor patent quality (though patent “quality” is a nebulous term that lacks any consistent definition). Prado also cites wasteful patent litigation as another culprit in the threat to innovation, with a 46% increase in the last four years (2018-2021). The blog also warns against unnamed “patent trolls” (another nebulous term).

Google encourages Congress to support the United States Patent and Trademark Office (USPTO) financially, so as to prevent issuance of “invalid” patents (though by law, patents are presumed to be valid (35 U.S.C. 282), and the U.S. Court of Appeals for the Federal Circuit (CAFC) has stated that USPTO examiners are presumed to do the work properly (See American Hoist & Derrick Co. v. Sowa & Sons, 725 F.2d, 1350, 1359 Fed. Cir 1984)). Google also urges Congress to end abusive litigation by eliminating the discretion of the USPTO to deny petitions challenging patent validity that are also the subject of ongoing litigation in federal court. (Google, which is a frequent filer of petitions to invalidate patents at the USPTO, has been trying to get this procedural discretion changed, without success for some time). Google further encourages the courts to act to prevent gaming the system by patent owners to get favorable jurisdictions, but Google does not explain how this game is being played.

In short, Google’s general counsel paints Google as a savior of the patent system.

Michel: Big Tech is the Culprit

On the other hand, only a few days later, on May 2, retired CAFC Chief Judge Paul Michel opined that Big Tech is hurting innovation and small inventors with their business model of infringement. Michel cites, for example, recent court orders for Google to pay $20 million in one case and $26 million in a second case for patent infringement. Apple is potentially liable for over $1 billion in one case for patent infringement, and another $300 million in a second infringement case. Google and Apple have appealed these district court decisions.

Michel criticizes the strategy of Big Tech companies, who he asserts deliberately infringe patents based on their financial ability to outspend the smaller patent owners who try to enforce their patent rights. Big court judgments might help change these tactics by the Big Tech companies. Michel suggests that more can be done by the courts to defend the U.S. patent system.

For example, he would like to see judgments upheld by the appellate court (absent reversable error), so that companies learn that infringement does not pay. Big awards are based on big sales, so complaints by Big Tech about large damages should be tempered. Michel believes that without the threat of a big judgment for infringement, these gigantic companies will continue to steal their small competitors’ technology, thereby threatening the patent system which supports innovation. Serial, willful patent infringement is a problem, according to Michel.

He also suggests there is a need for more uniformity from the courts in how to determine damages for patent infringement. Also, courts should not hesitate to find continuing infringement to be willful and to impose treble damages (as allowed by patent statute 35 U.S.C 284).

As Michel explains, investments in startup companies is at risk if Big Tech can simply take the inventions without significant consequences. This scenario will destroy entrepreneurs and their investors, thus discouraging innovation and prosperity. He believes that handing down large verdicts, and upholding them on appeal, is the only way to stop the business model of serial infringement by Big Tech.

On Closer Examination, an Easy Road to Choose

These two counterpoints are difficult to reconcile, but it is important to be truthful about what they are: the self-serving statements of one of the biggest companies in the world vs. the warnings from a respected jurist who has no personal stake in the matter. Since the first Patent Act of 1790, the American dream has been driven by innovation and the protection that the patent system provides. Startup companies grow and prosper through their creativity and new products and services. Patents have provided the incentives to invest time and resources to develop solutions to problems and better ways to do things in all industries. However, since the eBay decision, these benefits of the patent system have made it difficult for patent owners to get injunctions. Infringement without significant financial risk does not promote the progress of science and the useful arts. A wise statement, and good advice learned many years ago, is that a truly good and successful person (or business) does not need to blow their own horn because others will do it for them. Google’s boasting when compared with Judge Michel’s heartfelt concern about the U.S. patent system should make the road to follow on patent reform easy to choose.

 

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11 comments so far. Add my comment.

  • [Avatar for Anon]
    Anon
    May 17, 2022 02:54 pm

    B,

    The historical irony around IBM is even more astounding, as they made a decision (painfully wrong in hindsight) to eschew SOFTware as a primary business model to maintain their focus on HARDware as their business model driver.

    That business decision changed the history of the computing arts.

  • [Avatar for B]
    B
    May 17, 2022 01:34 pm

    @ TPC “For IBM it was about promoting Linux and trying to break the Wintel duopoly.”

    I never thought of any of that. I’m not close enough to that industry to gleen the underlying motivations of our Tech Overlords. Odd given that the first PC was IBMs (actually designed for IBM by Spacecrapt Inc. in Huntsville, AL. by rookie engineers – several of whom were classmates of mine at Vanderbilt) who adopted MS’s operating system b/c Digital Research was being difficult,

    Thank you for these insights.

    You need to post more

  • [Avatar for Josh Malone]
    Josh Malone
    May 17, 2022 01:30 pm

    It is quite simple to reconcile. U.S. patents are privileges for wealthy and powerful corporations. Patents for them, but not for us.

  • [Avatar for The Patent Crumudgeon]
    The Patent Crumudgeon
    May 17, 2022 11:11 am

    @B

    Agree for Google it was purely PR.

    For IBM it was about promoting Linux and trying to break the Wintel duopoly. IBM started Open Invention Network for the same reason. So not merely PR but also not necessarily pro or anti patent.

  • [Avatar for B]
    B
    May 16, 2022 03:59 pm

    @ The Patent Crumudgeon

    When you have all the money in the world, patents are not your friend. Curious is correct; it’s a PR move

  • [Avatar for Alan]
    Alan
    May 16, 2022 02:17 pm

    Although Prado didn’t explicitly state it, her position appears similar to Brad Smith at Microsoft. Smith’s position (100% of the time) is/was Microsoft has never infringed a valid patent. Never. When Microsoft was found liable for infringement the jury/court got it wrong. That is just plain dishonest. Apparently, only companies like Google have valid, high-quality patents. Any patent assertion against Google is abusive (in her mind).

  • [Avatar for PTO-Indentured]
    PTO-Indentured
    May 16, 2022 02:11 pm

    Thank you for helping us all better see — and reveal — the ‘Goo’ in Google’s championing of (themselves, allegedly on behalf of) the US patent system.

    I’ve been involved in the monetizing of US patents long enough to have experienced a genuine welcoming of me — as an inventor — by corporations including Fortune 500 companies largest in their respective fields internationally. One in particular, shared with me outright, that their company regularly generated more revenue annually from products patented by inventors outside their company than by those of their own employees. Honestly, I felt like they rolled out a red carpet welcoming me to do business with them, and was treated with respect from their decision makers and legal team — from day one until all contracts were signed.

    In Contrast

    How often, in this 21st century, US inventors have been, and continue to be demeaned — particularly by Big Tech — ‘as if’ US patentees were no more than ‘takers’ to be despised (cue their perpetually-funded Fairy Tale ‘troll narrative’). ‘As if’ more revenues being generated for their companies by using innovations conceived — beyond the capabilities of their own ‘brain trust’ — could only be a ‘bad thing’.

    Such are the intended distortions, that many a dollar has fanned and continues to fan into another and another baseless Fairy Tale flame.

  • [Avatar for The Patent Crumudgeon]
    The Patent Crumudgeon
    May 16, 2022 01:18 pm

    Regardless of whether you view open source patent pledges as pro patent or not (and as the real architect of the real first one I agree they are not) . Google’s pledge in 2013 came 8 years after the first pledge that IBM offered in 2005.

    https://www.computerworld.com/article/2569038/ibm-opens-500-patents-to-open-source-developers.html

    I know this because Google called me at IBM to figure out how to make their pledge. After IBM made its pledge in ’05 dozens of other companies including Sun and Microsoft made similar pledges within the next year.

    So Google was far, far from ‘…one of the first’ to make such a pledge.

  • [Avatar for Curious]
    Curious
    May 16, 2022 11:11 am

    In short, Google’s general counsel paints Google as a savior of the patent system.
    That is a strawman argument. Google’s general counsel was never so bold.

    Open Patent Non-Assertion Pledge
    Nothing about that is pro-patent. Rather, it is big companies agreeing not to sue smaller companies on patents that they wouldn’t sue on anyway (while keeping the good one’s in their hip pocket) in the hope to get small companies to pledge valuable patents to the non-assertion pact. It was just a PR move.

    License On Transfer network
    Another PR stunt. When a “member” of the network transfers a patent to a PAE, you are granted a license to that patent. In other words, it is a bunch of companies that agree to grant one another licenses if they happen to sell one of their patents. It is a way to destroy the value of the IP of smaller players (who may have valuable IP) by essentially making it worthless on the open market.

    Google has provided technical support for the Prior Art Archive.
    That is neither pro nor anti-patent — it is just a way to make invalidating patents easier.

    Prado notes that Google has 42,000 patents, which she says they license at “fair value”.
    How many licenses does Google take at fair value? I suspect the number is extremely small. They would rather attempt to invalidate than to license.

    In short, Google is not the savior of the patent system. This article does the “pro” patent side a disservice by presenting an argument that some people might believe Google is pro-patent. No such argument can be made. Anybody who has watched Google’s action know that Google is all for neutering the patent system.

    Granted, Google still takes advantage of the patent system. However, they have been a prime mover in creating a patent system that works for companies with 10s of thousands of patents — not a system that works for a company that has 10 patents. Nobody even marginally aware of what is going on with the patent system would confuse Google as being even the slightest bit pro-patent. If Congress were to abolish the US patent system tomorrow, not a single tear would be shed by Google management.

    These two counterpoints are difficult to reconcile
    No they are not. I get your approach in writing this article. Appear to present both sides fairly, but after doing so conclude that Judge Michel has the better argument. However, you didn’t present Google’s side fairly. You dressed up a turd as a flower.

    Don’t play Google’s game by pretending that they might being doing good. There is no need to be nice by attempting to put them into a favorable light. There is no favorable light to be shed upon Google’s anti-patent mindset. Just call it out for what it is.

  • [Avatar for Anon]
    Anon
    May 16, 2022 10:00 am

    Bravo – I will not bother to repost my comment about Google here (while it certainly fits), as it would be preaching to the choir.

  • [Avatar for B]
    B
    May 16, 2022 07:54 am

    EXCELLENT article, Mr. Hartung.

    Seriously, everything reflected in this article should resonate among a LOT of patent professionals.

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