Note to President Trump: Silicon Valley Pirates Are a Bigger Threat to Intellectual Property Than China

There is a lot of focus—and rightly so—on China’s stealing of U.S. intellectual property (IP). Recently, Trump economic adviser Larry Kudlow stated on CNBC’s Squawk Box that China has stolen at least $600 billion in American IP. Additionally, one in five North American-based corporations on the CNBC Global CFO Council said that Chinese companies have stolen their IP within the last year. In all, 7 of the 23 companies surveyed said that Chinese firms have stolen from them over the past decade. The annual cost to the U.S. economy for these actions is estimated to be greater than $600 billion.

The Real Weapons

While this is a serious matter that must continue to be addressed, domestic theft of U.S. IP is just as bad if not worse. It is easy to point fingers at China, given their track record, but small U.S. companies and inventors are not having their dreams extinguished by the Chinese. They are being victimized by Silicon Valley’s big tech companies, which make billions of dollars using their stolen IP, and use the U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) to invalidate their patents while tying them up in court for years in an effort to drive them out of business. The passing of the America Invents Act (AIA) was purposefully orchestrated to destroy the chances of patent owners and inventors monetizing their IP. It has weaponized the courts and USPTO against the very patents they have issued.

Not STRONG Enough

I commend the efforts of Senators Chris Coons (D-DE) and Congressman Steve Stivers (R-OH) and those who have signed on as co-sponsors of the STRONGER Patents Act 2019. This proposed legislation will go a long way to restoring credibility to America’s broken patent system, but in my opinion does not go far enough. I hope Congress will not only pass this legislation, but also take the bigger step to completely repeal and replace the AIA. The AIA is hostile towards patent owners and there is no room for window dressing. Innovation has been crippled and we continue to lose revolutionary inventions as more and more inventors choose to forego the USPTO and go underground, keeping their ideas as trade secrets. As CEO of a company with more than 20 U.S. patents, and myself personally a named inventor on two patents, I could never with good conscience advise anyone to file for a patent with the USPTO until the AIA is repealed and the Alice law on patent eligibility under Section 101 as we know it is cancelled.

Stolen Profits

While the Chinese may be guilty of stealing more than $600 billion of American IP annually, I would estimate that to be small in comparison to the enormous value of IP stolen by American big tech companies since the passage of the AIA. The value of that theft could easily top $1 trillion or more. Big tech companies have experienced astronomical growth in the eight years since the AIA became law.  Today, the top 10 U.S. technology companies have a combined value of more than $5.25 trillion. On the day the AIA was signed into law, those same companies had a combined valuation of $1.36 trillion. That’s a nearly fourfold increase in just eight years. No doubt, much of that increase was the result of stolen IP.

My advice to inventors is to keep your inventions trade secrets and, for the time being, do not patent with the USPTO.

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Copyright: stuartmiles