At a recent House Judiciary Committee Oversight Hearing, Congresswoman Zoe Lofgren (D-CA) jumped into the patent troll debate with both feet, casting herself as a staunch defender of efficient infringement as she wondered what in the world is going on at the United States Patent and Trademark Office. For additional coverage see here and here.
During her questioning of USPTO Director Andrei Iancu, Lofgren used both her allotted time and time yielded to her by Congresswoman Karen Bass (D-CA) to push back against the recently proposed agency rule which would change the standard of claim construction applied in Patent Trial and Appeal Board (PTAB) trials from the broadest reasonable interpretation (BRI) of challenged claims to using the Phillips standard of claim construction used in Article III courts. She argued that Director Iancu’s proposed rule was particularly concerning in light of the U.S. Supreme court’s recent decision in Oil States v. Greene’s Energy Group, which upheld the constitutionality of inter partes review (IPR) proceedings.
Speaking to Director Iancu, Lofrgen said:
“I’m not saying that it’s unlawful but it does seem to me to circumvent Congress’ prerogative on this issue, and, you know, you’re seeking for us to eliminate our prerogative to set fees while you’re assuming our prerogative in a way that I think is disturbing, honestly. Now as I’ve looked at the suggestions on why this is necessary, I have not found them compelling. One concern I have as well is the potential of res judicata arising from district court interpretation tying the hands of the PTAB which doesn’t happen now because there are different standards. If you make this change, the PTAB could be bound by res judicata to follow a district court or the ITC’s finding on validity which would completely blow up what we were trying to do as a Congress to clear this out… It looks to me that the people who disagreed with [the AIA] and lost in the Congress, they went to the Supreme Court, they lost in the Supreme Court, and now they’re going to you, and you are reversing what the Congress decided to do and what the Court said was permissible to do.”
Simply stated, Congresswoman Lofgren is wrong. Congress did not decide on a claim construction standard to apply during post grant challenges at the Patent Office, which is precisely why that decision was initially left open to the discretion of the implementing agency; the USPTO. It is also precisely why that decision remains open to the discretion of the USPTO, and how and why Director Iancu can change the standard via the rulemaking process.
Furthermore, Congresswoman Lofgren seems quick to forget that she was one of the original co-sponsors of the Innovation Act when it was introduced into the House back in February 2015. Had that bill passed, it would have required patents challenged in IPR proceedings to be construed in the exact same manner that a district court would have required in a civil action to invalidate the patent (i.e.: the Phillips standard). Specifically, the Innovation Act (HR 9) said in relevant part:
[E]ach claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including construing each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent…
So, it seems Lofgren was for the Phillips standard and eliminating BRI before she was against it.
Nevertheless, in response, Director Iancu noted his stance on trying to bring consistency between the USPTO, district courts and the ITC claim construction standards, citing the more than 80 percent of patents involved in parallel proceedings at the PTAB and at other forums. This consistency would reduce gamesmanship between forums and enhance the Congressional intent behind the AIA by making the PTAB a true alternative to district court litigation with consistent standards.
“In order to have a predictable patent system that folks can rely on, it seems that the meaning of a patent, when one sits down to look at a patent and try to invest in it, or invent around it, whether the owner or the public, it seems that the meaning of that patent or the boundaries of that patent, at least objectively, should not depend on the forum on which it might happen some years down the line that that patent is challenged in, if one is to make predictable decisions based on that patent.”
After being yielded time from her fellow Congresswoman from California, Lofgren continued to launch her attack against Director Iancu’s reasoned argument that patent validity standards at the PTAB should align with the Phillips standard. She derided Iancu’s response as a “law school answer” all while repeating the fallacy that “in the real world we have patent trolls out there holding people up.”
It’s not without reason that Lofgren would choose to regurgitate the very rhetoric which has done a great job of decimating the U.S. patent system in recent years. In fact, other aspects of the USPTO oversight hearing make it clear that there’s a true California connection working to tip the scales of the U.S. patent system in favor of massive tech corporations, many of which call Silicon Valley home. To wit, the only other committee member at that hearing to raise concerns over the proposed rule change was Rep. Darrell Issa (R-CA), a well-financed ally of the efficient infringer lobby who is himself a patent troll.
Issa argued against the alignment of claim construction standards based on the logic that IPRs and other PTAB trials more closely resemble other agency actions like reexaminations instead of Article III proceedings. Issa even made the stunningly sober admission that many patent owners going through the PTAB are left with only “the shambles of a patent” and that there should be a process following those trials to “legitimize whatever patentable material is left.”
Not only was Lofgren a co-sponsor of the Innovation Act in February 2015, but so too was Issa. That bill would have eliminated BRI, which Lofgren and Issa are now arguing to keep intact. It is exactly this type of change of positions that gives people whiplash inside the beltway of our nation’s Capitol, and why there is so much skepticism with respect to Congress. Lofgren and Issa were supporting a bill just three years ago that would do precisely what Director Iancu is trying to do now, but for some reason the idea is antithetical to everything they stand for, at least at the moment.
What happened in those few short years that so changed the viewpoints of these and perhaps other members of DC’s political elite? We can all guess what it is that happened, and it relates to one of the larger evils in American politics: Money and benefactors.
According to OpenSecrets.org, the campaign committee of Zoe Lofgren has received $770,600 in contributions during the 2017-18 election cycle. More than $130,000 worth of that total comes from the electronics manufacturing and equipment sector, the single largest industry sector contributing money to Lofgren’s 2018 re-election campaign. The top 20 contributors to Lofgren include a host of names that are deeply entrenched in the efficient infringement side of the battle for the soul of the U.S. patent system. This includes Cisco, a member of the High Tech Inventors Alliance and the 2nd-largest contributor to Lofgren’s campaign ($25,250). Other tech giants contributing to Lofgren’s coffers include Alphabet (6th largest, $18,800), Microsoft (7th, $14,300), Apple (9th, $10,900), Facebook and Netflix (both 14th, $10,400). Given that these funds, which are crucial to Lofgren, represent a small fraction of what any of these tech giants would have to pay if patent owners could actually enforce their patent rights in the face of infringement, it makes prefect sense for those companies to contribute within the limits (or lack thereof) of the law.
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12 comments so far.
staffJune 4, 2018 04:05 pm
‘the recently proposed agency rule which would change the standard of claim construction’
Certainly there are many things that can be done to improve post issue reviews, none of which answer to their most glaring problems: they deny the rights of Americans, such as due process and trial by jury. Some things are just so fundamentally flawed that the only sensible approach is to abolish them forever.
For our position and the changes we advocate (the rest of the truth) to restore the patent system, or to join our effort, please visit us at https://aminventorsforjustice.wordpress.com/category/our-position/
or, contact us at [email protected]
PTO-IndenturedJune 4, 2018 11:22 am
Ironic / symbiotic: Influence-Payola Yields Efficient-Stealing
More particularly: Influence-payola by CA elite-tech to CA politicians yields politician-backed efficient infringement (patent stealing-law) to CA elite-tech.
A symbiotic patent-worth corrupting loop.
Essentially: ‘Pay me, so that you don’t have to pay inventors.’ Let’s not get bogged down in what’s happening to the USPTO (nosedived to 12th ranked in world), to U.S. independent inventors (30% of IP filers pre-AIA, 4% now), to the U.S. leading in innovation while we render patents toothless…
Night WriterJune 4, 2018 10:34 am
What you can do is use the contributions to go after other people with more effort and make it clear that it is because of her. There are ways. It takes a PAC with millions. That is what we need.
ValuationguyJune 4, 2018 10:17 am
One of the things to keep in mind with respect to Lofgren is that her district is an entirely SAFE one for the Dems. She has no effective opposition from the Republicans so as long as she keep the local Democratic bosses happy….she doesn’t need much funding at all except to fend off progressives unhappy with the Democratic machine of San Francisco.
Night WriterJune 4, 2018 08:12 am
I think you are right. The only way –that I see—to win this is to start our own PAC.
Night WriterJune 4, 2018 07:31 am
And, frankly, I think patent attorneys are naive. These politicians are like crack whores. They will not deviate from the pusher’s agenda because they want their money. And many of these people get private money through very complex arrangements.
The only way to fight whores like this is to have money of your own and threaten their seats. You have to organize and consistently support any candidate that will support your position and support candidates that oppose any candidate that does not support your position. It is the only way to fight money whores.
Night WriterJune 4, 2018 07:28 am
OT, but on the other blog we had the idea of using an executive order to pressure Congress to act on 101. Trump could sign an executive order ordering the PTO not to reject patent applications unless they match the fact pattern of a SCOTUS case.
Night WriterJune 4, 2018 07:26 am
She is a political whore. We can never win as long as people like this are bought by the large corporations. In my state, we had overwhelming support for legalization of marijuana for medical purposes. There was one person that in charge of the health committee in the state senate. He held up a vote on legalization for years. Finally, the only way was to threaten him with other primary candidates and out him for what he was doing. His campaign contributions were almost all from big pharma. As soon as he caved, it was legalized with a huge majority. I like to think that I had something to do with his caving by outing him on many blogs and suggesting a course of action against him with activists.
You cannot expect political whores to cave unless there is a bigger threat to their seats in Congress. That is all they care about is lining their own pockets and remaining in power. WHORES.
peterJune 4, 2018 03:48 am
She’s bought and paid for. If Iancu is aware of this and that she is just a spokesperson for the efficient infringement lobby, he should heavily discount her opinion.
JasonJune 4, 2018 12:24 am
Now that more of this is aired out that companies like Cisco, Apple, Google…bought out congress to prevent patent holders from getting paid for their IPs. Inventors lost billions in lost revenues while Sillicon Valley fleeced small investors while their stock prices grew to record profits because of small inventors patents they did not have to pay licensing royalties thanks to The Alice ruling and the passage of the AIA Act back in 2011 that decimated patent values and the introduction of the PTAB that put the final kill for patent inforcement for small inventors in ever getting paid or getting far trial. Big tech killed the patent market. There is no point filling for a patent on the US as the big guys like Cisco, Apple will just come and take your invention and if you try to inforce your patent rights they will call you a patent troll and fight you in court until they win or you run out of money.
Gene QuinnJune 3, 2018 12:34 pm
Perhaps. But from what I can see, and based on what I’ve been told, most would be shocked at how little money it takes to get a seat at the table. That is why it is so frustrating to see those with portfolios who are losing millions (if not billions) being unwilling to spend thousands.
AnonJune 3, 2018 11:56 am
I have to imagine that the campaign contribution levels you speak of may only pail in comparison to the total “voice” dollars raining in from juristic persons…