Posts Tagged: "Patent Trolls"

On Tuesday, I attended a panel discussion on the National Security Implications of Patents along with my siblings, Madeline and Gideon Malone, and we were informed that inventors like the Wright brothers pose a threat to innovation. We were joined by approximately 50 attendees at the Capitol event moderated by Charles Duan from R Street Institute, along with panelists Abby Rives from Engine, Daniel Takash from Niskanen Center, and Ian Wallace from New America. They argued that patents harm innovation, and government subsidies are a better alternative to incentivize innovation. In order for R Street (a free-market think tank) to justify these blatantly anti-free-market claims, they focused on the problems with “bad patents” and how patent monopolies prevent competition. To top it all off, their example of a “bad patent” was the one granted to the Wright brothers, which the panelists felt unreasonably excluded their competitors from making improved versions of their airplane.

Yesterday, the Federal Circuit once again breached a fundamental boundary of our American system of law. This particular transgression has occurred only a handful of times, but each is more ominous than the last. If this is allowed to stand, we can no longer be considered a democratic republic, but will have become a banana republic. What is rapidly becoming routine to the patent litigation industry will create shockwaves throughout the other 12 circuit courts, upend the rule of law, and damage our nation. In Chrimar Systems, Inc. v. Ale USA, Inc. FKA Alcatel-Lucent Enterprise USA, Inc. (Fed. Circ. Case No. 18-2420), the Federal Circuit allowed the Patent Trial and Appeal Board (PTAB) to overrule an Article III court and jury. That is, the Executive Branch of government directly and unequivocally has overruled the Judicial Branch, including a jury.

On the afternoon of Wednesday, September 11, the Senate Judiciary Committee’s Subcommittee on Intellectual Property convened a hearing titled Innovation in America: How Congress Can Make Our Patent System STRONGER. The hearing focused on the STRONGER Patents Act, a piece of legislation that has been reintroduced into both houses of Congress, the Senate portion of which has been co-sponsored by the Senate IP Subcommittee’s Ranking Member, Senator Chris Coons (D-DE), fellow Subcommittee members Mazie Hirono (D-HI) and Dick Durbin (D-IL), Judiciary Committee member John Kennedy (R-LA) and Senators Tom Cotton (R-AR) and Kevin Cramer (R-ND). Sources at IPWatchdog’s Patent Masters Symposium this week said that the bill still faces many obstacles to passage. However, according to Senator Coons’ Office, the bill has wide bipartisan support in the House as well. The panel for the hearing was evenly split between supporters and detractors of the proposed law, and most of the discussion focused on the injunctive relief and inter partes review (IPR) provisions of the bill.

On August 16, the Supreme Court of New Hampshire issued an opinion in Automated Transactions, LLC v. American Bankers Association affirming a lower court’s decision to grant a motion to dismiss claims of defamation alleged by an inventor whose legitimate patent licensing business was decimated by a collection of entities and individuals deriding that inventor as a “patent troll.” The decision is certainly unwelcome news to any inventor concerned by the prospect that large entities could infringe upon their intellectual property and escape any chance of facing justice simply by hurling the “patent troll” epithet.

Too often, engineering companies are in such a race to come up with the next big thing that they forget to consider the crucial step following their grand discoveries or inventions: patent protection. If a business is willing to spend years developing products and a considerable amount of money marketing, then it only makes sense to follow through and protect the accomplishment. Yet, many (unintentionally) don’t. Below are five risky ways tech companies often jeopardize their intellectual property rights, sometimes even before a product has been developed.

On the afternoon of Wednesday, March 13, the Senate Judiciary Committee’s Subcommittee on Intellectual Property held an oversight hearing of the U.S. Patent and Trademark Office featuring testimony from and questioning of USPTO Director Andrei Iancu. While this hearing was relatively short by Congressional standards, the Senate IP Subcommittee explored recent changes instituted during Iancu’s tenure as USPTO Director and also got into the debate on pharmaceutical patents—a topic that has been front and center for both houses of Congress in recent weeks.

The Electronic Frontier Foundation (EFF) is at it again, this time with what they refer to as a Save Alice campaign. The EFF does not like the Revised Patent Eligibility Guidance published by the United States Patent and Trademark Office (USPTO) in January 2019 and is charging USPTO Director Andrei Iancu with attempting to subvert the United States Supreme Court and essentially ignore Alice v. CLS Bank. These assertions are bogus, and truthfully, they are hardly worth the consideration of thoughtful individuals interested in a meaningful dialogue about the state of the U.S. patent system. Director Iancu has issued guidance that strictly follows exactly what the Supreme Court ruled in Alice, period. Over the years patent examiners, Administrative Patent Judges, district courts, and the Federal Circuit have dramatically expanded Alice. It was admitted in Alice that the “invention” could be coded over a weekend by a second-year college student, which means it was extremely trivial and not innovative.

On the morning of February 14, the New Hampshire Supreme Court will hear what could be one of this year’s most important set of arguments related to patent ownership taking place outside of the federal judiciary. At 10:30 AM that morning, the Court will listen to oral arguments in Automated Transactions, LLC and David Barcelou v. American Bankers Association et. al. to determine whether the New Hampshire Superior Court erred by dismissing a defamation case after finding that the term “patent troll” isn’t necessarily pejorative. Automated Transactions and David Barcelou alleged that the defendants in the action made defamatory statements by referring to them as a “patent troll.” This exposed them to hatred, ridicule and contempt, which caused them to be ignored by automated transaction machine (ATM) operators across the country and injured their legitimate business of licensing patents that they developed and that were issued by the U.S. Patent and Trademark Office. The appeal argues that the Superior Court did not examine the full context of the reference to the term “patent troll” when making its determination, dismissing the action before the plaintiffs were able to present any evidence or proof and depriving them of their rights to a trial on the merits.

When you see a docket report with a patent lawsuit filed by a non-practicing entity (NPE), do you think it’s just another ‘patent troll’ taking advantage of the system? Or would you be willing to consider that underlying every patent litigation is a human story of invention, which is the embodiment and manifestation of an innovator’s aspirations and sacrifices? These human stories are too often marginalized in the ‘patent troll’ debate. One such story is that of Wayne Evans. His life took him from the depths of poverty and loss to the struggles of being an entrepreneur raising a family and, ultimately, to late-in-life success as an inventor, innovator, and author.

This marks Part III of my four-part interview with IBM discussing the state of innovation and the U.S. patent system from the standpoint of a company that has obtained the most U.S. patents for 26 years in a row. Below, I continue the conversation with Mark Ringes, Vice President and Assistant General Counsel for IBM, and Manny Schecter, Chief Patent Counsel for IBM, picking up on the topics of prior art and patent trolls, moving on to a comparison of the U.S. patent system with the rapidly evolving systems of China and Europe and, finally, examining how companies are refining patent prosecution practices to address the Section 101 chaos.

In the U.S., the risks of frivolous patent lawsuits is greater because the merits are decided by a group of jurors who lack patent expertise and can incorrectly conclude that a patent is infringed. In China, however, these inefficiencies and imbalances do not exist. The specialized intellectual property courts and tribunals in China are equipped with specialized judges who are able to quickly and accurately identify frivolous lawsuits. Because there is no discovery process and a decision on the merits can often be achieved within one year, the abusive tactics employed by patent trolls in the U.S. can be avoided in China.

Remarkably, in what I believe amounts to Orwellian “doublespeak,” those who’ve been advancing the patent troll narrative argue that they do so because they are actually pro-innovation. That by their highlighting, relentlessly, the dangers in the patent system, they actually encourage innovation. Right! … Look, people are free to express any point of view, and they can certainly advocate for weakening our patent system. But they should be up front about it. Those who spend their time and money relentlessly preaching the dangers of monsters lurking under the innovation ecosystem, and who work exclusively to identify only faults in the system, are unconvincing when they argue that they are doing so for purposes of increasing innovation.

Facebook is asserting a series of patents the company has acquired from other firms, making its actions similar to those of non-practicing entities (NPEs) and remarkably patent troll-like. After all, we have been told time and time again by those who have advocated for patent reform and a systematic dismantling of the patent system that a telltale sign of a truly bad actor like a patent troll is that the patents were not the subject of homegrown innovation, but were rather acquired from true innovators and then used to sue others. That, however, is precisely what Facebook is doing here. 

LOT Network markets itself as a non-profit consortium, which offers its members a legal mechanism affording them protection from patent assertion entities (PAEs) and immunizes its members against patent suits from non-operating entities for about 1.2 million worldwide patent assets currently owned by LOT members… The LOT Network conditional license only applies to patents that are in network at the time that a firm joins the consortium. If a business joins LOT after a LOT member sells a patent, previous LOT members are protected by the conditional license whereas the new member still faces the potential of an infringement suit down the road on that patent.

Congresswoman Lofgren is now opposing a rule change she previously endorsed as an original co-sponsor of a bill that would have changed the claim construction rule in exactly the same way proposed by Director Iancu… But how is adopting a rule that would have already been the law had Lofgren had her way possibly frustrate or disregard Congress? Of course, we aren’t supposed to ask that question. Once the “patent troll” boogeyman card is played everything else is supposed to fade away.