Posts Tagged: "Congress"

In a New Hampshire State Superior Court, this so-called ‘patent troll’ has decided to fight back. Automated Transactions and Dave Barcelou have filed a defamation complaint against the crème de la crème of those deemed “too big to fail” and who many might consider to be too big to defeat… The minute Barcelou was able to enforce his patented technologies in court, winning a sizable settlement from the biggest bank in his hometown of Buffalo, NY, a veritable “Who’s Who” of the financial services leaders joined forces to destroy both Barcelou and his company economically. Besides encouraging one another to ignore Automated Transaction’s demand letters, false and misleading statements started to appear in prominent business publications, which went so far as to say the company had purchased its patents, or alternatively, that the patents were invalid. Over time a unified battle cry arose from the ‘poor little community banks’ he allegedly targeted; “He’s nothing but a patent troll.”

Patent trolls – as well as calls for changes to the law to prevent them – date back to at least the 1800’s. A look at their history suggests that they have more to do with fluidity in the definition of patentable subject matter than any unique feature of a particular class of inventions… A change in a fundamental definition of what comprised patentable subject matter, and that change brought a major building block of commerce into the ambit of the patent system. In the age of the sharks, the farm remained the core of the U.S. economy, driving a gold rush of new patents covering every element of the farming process. Such a rush also encourages the formation of patent thickets, as speculators scramble for any potentially protectable chunk of the market. The same phenomenon drove the development of modern tech and software patents. In the aftermath of State Street, once again the market found that the machinery that undergirded the economy was suddenly open to being patented, leading to a similar gold rush.

The U.S. inventor pool is now limited to corporate inventors and a very few resilient professional inventors. The number of professional inventors will rapidly decrease with fewer and fewer of young people joining the inventor population… U.S. patent applications are predominately filed by foreign corporations, while for all other national patent offices the domestic applications comprise a super majority. In 2016, the Chinese patent office received totally 3,465,000 applications for three kinds of patents, making an increase of 23.8% year on year. The number for invention, utility model and design are respectively 1,339,000 (increase by 21.5%), 1,476,000 (increase by 30.9%) and 650,000 (increase by 14.2%). China has a high share of domestic applications (which means that inventive activities take place inside the country). The total application number in 2016 is 1,339,000+1,476,000=2,815,000. Patent applications filed with China patent office in 2016 is almost ten times of the U.S.-originated applications filed with the U.S. patent office. The number of patent applications filed with Japanese patent office is close to the U.S.-origin applications filed with the U.S. patent office. South Korea will surpass the U.S. in application filing number.

Patent reformers argue that too many patents can hurt business, and low-quality patents cause problems. Their lobby activities have successfully persuaded the Congress to pass the AIA, with the primary purpose to raise patent quality…. The patent office uses all patent rules in an even-handed manner to all applicants. So, it treats corporate applicants and U.S. individual applicants in the same way: entering frivolous rejections, using one-way bias high patent quality standard, giving the same opportunity to demand inter-party review (by paying $23,000), and affording the same opportunity to defend a challenge to patents (which would consume hundreds of thousands of dollars of attorney fees). Nobody can question those rules.  However, this money-can-buy fairness practices have distorted technological landscape. Frivolous rejections can force individual inventors to abandon their applications, but do not affect giant foreign corporations; outrageous fees and maintenance fees can discourage individual inventors, but will not affect foreign corporations; and the right of harassment can be used by all corporations but not U.S. independent inventors.

“I think at the end of the day, patents are either valid or invalid as a legal instrument and therefore it’s not very helpful to talk about quality or ‘good’ or ‘bad,” Judge Michel said. “They’re either valid or not valid and with respect to someone practicing the technology, the patent is either infringed as properly construed or it is not infringed.”

With all of this money, it seems the efficient infringer lobby has managed to find an unlikely ally in Congress — someone who made his money as an innovator who defended his patents as a patent plaintiff, which apparently makes him a patent troll. At the end of the day, it may not be entirely fair to characterize Congressman Darrell Issa as a patent troll. Instead, he seems more of a swamp creature of the type that President Trump campaigned against. An individual who has fed from those who are actively trying to muck up the U.S. patent system in favor of large, entrenched entities and to the disadvantage of small, innovative patent owners who have previously always been the driving force of innovation and job creation in America.

Why does Mapbox’s viewpoint on patent litigation echo in the halls of Congress given the fact that it doesn’t appear that it has faced abusive patent litigation? In fact, it almost looks like there is no merit to Lee’s statement that “Mapbox has had multiple experiences with patent trolls: non-practicing entities who file meritless lawsuits that are cheaper to settle than to defend.” Mapbox certainly hasn’t had multiple experiences with lawsuits… The one patent case Mapbox has faced as a defendant was filed last December by Shipping & Transit LLC, a company which itself has been very litigious against alleged patent infringement having been listed as a plaintiff in 172 patent suits. The one Shipping & Transit suit filed against Mapbox terminated in 92 days and has a total of nine docket items and the original complaint is all of six pages long.

Issa decried Judge Gilstrap’s “overreach” in denying a motion to transfer venue in a case coming after the U.S. Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, a decision which restricted the venue statute for patent infringement cases. “It is, in fact, an act that I find reprehensible by that judge,” Issa said… American Board of Trial Advocates (ABOTA) noted that Issa’s further assertion that Judge Gilstrap was motivated by personal bias to promote community interests “extended beyond a challenge of the legal precedent to a personal attack on Judge Gilstrap and his integrity as a jurist.”

The U.S. patent system is the primary contributor for the U.S. economy. Since the foundering of the nation, the patent system has fostered an innovation culture that is directly responsible for making inventions that are more than all inventions accumulated in all major civilized regions in several thousands of years. However, the U.S. has inherent disadvantages in the political system and court systems… After the irreparable damages of public trust in the patent system, overhauling the patent system is no longer a feasible option. To continue existing as a powerful nation in the world, the U.S. must put its population back to the inventing business and create a renewed innovation culture, which could reach the entire population. It cannot count on the “miserable system” known in Thomas Edison’s time. Due to intensified competition and critical roles of technologies in competition, America must do far more than what is necessary to turn the dead patent system back to the same “miserable system”. One more thing that the Congress should do is to revive all invalidated patents under the AIA.

House IP subcommittee chair Rep. Darrell Issa (R-CA) led off the hearing by discussing the large number of interests who are often on Capitol Hill to discuss their issues with “patent trolls,” including the “genius ones” which have only been developed in recent years. Despite the intent of the America Invents Act (AIA) of 2011 to weed bad patents out of the system, “patent trolls” remain active. Issa felt there were a few reasons for this, including the fact that such entities make money and that good patents could still be used to assert unreasonable claims. “Why innovate when it’s far easier and more profitable to simply purchase a patent, acquire one, acquire the rights to a patent, perhaps one that has never been licensed, bully businesses into writing a check, go away without ever seriously litigating,” Issa said. He said that 80 percent of “patent troll” litigation focuses on small business. “Simply put, we should not confuse ‘Making America Great Again’ with ‘Making American Patent Trolls Richer Again,’” Issa said. Although Issa was pleased with the U.S. Supreme Court’s recent decision on patent venue in TC Heartland v. Kraft Foods Group Brands, he recoiled at what he felt was an “overreach” by Judge Rodney Gilstrap from the Eastern District of Texas (E.D. Tex.); Issa felt that Gilstrap misinterpreted the Supreme Court’s decision in TC Heartland by denying a motion to transfer venue from E.D. Tex. in Raytheon v. Cray. “It is, in fact, an act that I find reprehensible by that judge,” Issa said.

Many were stunned to learn that Senator Angus King (I-ME) included language undermining the Bayh-Dole Act in the report of the Senate Armed Services Committee as it approved the National Defense Authorization Act. The the language “directs” the Department of Defense (DOD) to issue compulsory licenses under Bayh-Dole “whenever the price of a drug, vaccine, or other medical technology is higher in the U.S. than the median price charged in the seven largest economies that have a per capita income at least half the per capita income of the U.S.” The provision gives the Department no discretion— it must comply. Apparently no one bothered to check with DOD or anyone familiar with the law to discover that this language incorporates a long discredited theory of how Bayh-Dole operates, or of the significant damage it would do to the development of badly needed medicines and the U.S. economy. The bill is headed to the full Senate for consideration. So before that happens, let’s consider why this is such a bad idea.

Eight tech companies owning a collective 115,000 patents announced the establishment of the High Tech Inventors Alliance (HTIA), an organization they claim is “dedicated to supporting balanced patent policy.” According to coverage by Congressional blog TheHill, the formation of the HTIA is intended to further debate on Capitol Hill over patent reform… The members of the alliance are your typical “Who’s Who” of the efficient infringer lobby… Every member of the HTIA, including Adobe, Cisco, Oracle and Salesforce.com all lobbied on issues related to the Innovation Act.

“I can tell you, every day Congress is in session there are lobbyists here trying to weaken the patent system,” Massie explained. In Massie’s words, those companies that come to Capitol Hill and lobby to weaken the patent system want to get into new fields, but the problem is they didn’t invent in those fields, so they face problems. Patent problems. A lot of those companies want to become automobile manufacturers, or cell phone manufacturers, or they want to write software for operating systems, but they didn’t invent in those areas and they don’t own the patents that have historically been the touchstone of innovation ownership. “They’d love to just come in and start playing in those fields and start using their size and scale as an advantage, and to them, patents look like a hindrance,” Massie explained. “They are here in Congress looking to weaken patents and they are not just interested in weakening patents issued in the future, they are looking to weaken all patents.”

In late June, the Support Technology and Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act of 2017 was introduced into the U.S. Senate by co-sponsors Sen. Chris Coons (D-DE), Sen. Tom Cotton (R-AZ), Sen. Dick Durbin (D-IL) and Sen. Mazie Hirono (D-HI). The bill’s purpose is “to strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy.”

For the first 220 years of United States black letter law and precedent based directly on the U.S. Constitution, patents are property rights. Even the Republican Party Platform states that patents are property rights. Issa disagrees with all of that. Issa seems to believe that patents are instead some sort of public entitlement like food stamps as is evident in his bill, the America Invents Act, and his continuing actions even last week. Issa’s hypocrisy is so blatant, so obvious and so up front that I’m not sure he even understands what he just said, which is a very dangerous problem. So long as Darrell Issa remains in key lawmaking position in the Republican leadership in Congress, venture capital, patenting, new technologies, startups and jobs will continue to flee from the U.S. to China.