“The U.S. share of global venture capital fell from 66% in 2010 to 40% in 2018, while China’s share increased from 12% to 38% in the same time period…. The STRONGER Patents Act would help reverse this alarming trend by taking critical steps to shore up our patent system.”
Brian Pomper is Executive Director of the Innovation Alliance.
The bipartisan STRONGER Patents Act of 2019 took an important step forward last week, as the Senate Judiciary Subcommittee on Intellectual Property held a hearing on the proposed legislation. Senators Tillis and Coons, the Subcommittee’s Chairman and Ranking Member, should be commended for holding the hearing and focusing attention on our patent system’s role in promoting American innovation and job creation.
As several of the hearing witnesses made clear in their testimony, our patent system has been dangerously weakened in recent years through a series of judicial, legislative, and administrative changes. These changes have undermined patent rights and made it difficult for inventors to protect their innovations from infringement. Meanwhile, our foreign competitors, including China and Europe, have strengthened their patent rights.
This has put us at a competitive disadvantage and helped contribute to a trend of both innovation and venture capital increasingly moving overseas. For example, the U.S. share of global venture capital fell from 66% in 2010 to 40% in 2018, while China’s share increased from 12% to 38% in the same time period. And despite more than a decade of economic growth following the Great Recession of 2007-2009, startup formation has failed to return to its pre-recession levels.
In yet another disturbing sign, the 2019 Bloomberg Innovation Index ranked the United States as 8th in the world for innovation. While this marked a small improvement over our 11th place ranking in 2018, it is still well below our previous #1 ranking, which we held until last year.
The STRONGER Patents Act would help reverse this alarming trend by taking critical steps to shore up our patent system. Perhaps most importantly, it would restore the ability of inventors to obtain an injunction—a judicial order stopping a proven infringer from continuing to use or sell an invention. Since the Supreme Court’s 2006 eBay decision, the rate of injunctions granted has dropped by over 85% in the United States. The eBay decision has been misapplied by many lower courts as a categorical rule against injunctions for inventors who license their patents. This inability to obtain injunctions has left many individual inventors and small businesses with little recourse in the face of infringement by large corporations. It has also contributed to American innovation moving abroad, as courts in major Asian and European countries continue to grant injunctions in such cases, providing real protection for their patent holders.
The STRONGER Patents Act would also ensure a better balance between patent holders’ and challengers’ interests in administrative proceedings of the USPTO’s Patent Trial and Appeal Board (PTAB) by limiting repetitive and harassing challenges against inventors. The PTAB was intended to be a quicker and cheaper venue to challenge the validity of questionable patents, not an easier venue. In practice, it has been easier to invalidate patents in the PTAB than in district court, and the PTAB process has been abused by large corporations who have initiated repeated PTAB challenges against valid patents in ways not intended by Congress or tolerated in district court.
In fact, a recent study found that for the top filer of patent challenges at the PTAB—Apple—56% of its challenges were duplicative (i.e. Apple filed multiple petitions challenging the same claims). Furthermore, patent infringers have begun to institute proceedings attempting to invalidate patents by filing with both the PTAB and in federal court simultaneously, directly contrary to the America Invents Act’s goal of providing an alternative to resolving validity challenges in expensive district court litigation. These duplicative proceedings only add expense and uncertainty for patent holders, rather than providing the promised alternative to prolonged, resource-intensive litigation.
The STRONGER Patents Act is urgently needed to maintain our patent system’s role as an engine for U.S. economic growth and job creation, as it has been for more than 200 years. Thankfully, the bill has growing bipartisan support in Congress, with Senators Chris Coons (D-DE.), Tom Cotton (R-AR.), Dick Durbin (D-IL.), Mazie Hirono (D-HI), John Kennedy (R-LA.), and Kevin Cramer (R-ND) co-sponsoring in the Senate, and Representatives Steve Stivers (R-OH) and Bill Foster (D-IL) serving as the lead co-sponsors in the House.
The Senate Judiciary Subcommittee on Intellectual Property took an important step by holding a hearing on the STRONGER Patents Act. Now we need the full Committee and the rest of Congress to take up and pass this legislation as soon as possible.
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18 comments so far.
BenNovember 14, 2019 12:00 pm
I worked for a major tech company and would like to admit they have killed of patent rights so they can openly take what ever patents they want with out any kind of repercussions. “Patent Troll” was blown up to created a boogeyman so FAANG could get the bills passed to stonewall an inventors from collecting a licensing royalty. Its all based on Greed. If you do not believe what im saying just take a looking at FAANG’s stock price before the AIA Act was introduced in 2011 and take a look at the payouts that have gone to IP holders. Government works for who signs the biggest donation. Its a Corporatocracy and they will apply the same formula to Europe and Asia. No one can stop them.
AnonSeptember 30, 2019 03:32 pm
I am not sure that such should be looked at in such glowing terms on a blog that is focused on the law. I am uncertain just what “getting over yourself” means in this context, nor, if by implication you mean to suggest something that you cannot possibly know about (which would only serve to reinforce the “not positive” aspect of whether you were an attorney in the first place.
Nothing wrong mind you with not being an attorney. But very often, the opinions of such are only opinions as opposed to being informed opinions..
BillSeptember 30, 2019 09:52 am
Anon, you’re not the first person who was surprised to learn I’m an attorney. I actually take it as a compliment. I got over myself a long time ago.
AnonSeptember 26, 2019 01:00 pm
You dug too quickly.
“US constitution section 8 cl 8, required congress to pass”
The use of the word “required” is not correct. That constitutional section is the provision of authority. It is NOT a mandate of “must have.”
AnonSeptember 26, 2019 12:58 pm
Apologies Bill – you did answer my question. (that disguise works only TOO well)
AnonSeptember 26, 2019 08:16 am
It was illogical — and showed that you do not understand the constraints that exist in law.
That is why I responded as I responded.
Is there a reason why you are not directly answering my question as to you being an attorney?
What is your background?
ATM KhalidSeptember 26, 2019 03:46 am
Recently I started to dig into patent law. US constitution section 8 cl 8, required congress to pass law to secure “the exclusive Right” to inventor. Founding fathers definitely knew terms like investors, employers etc. But rather than using those words they wanted to secure invention to inventor. ‘Secure’ was used in the constitution 3 places. In the preamble as “secure the Blessing of Liberty” and in 4th amendment privacy is secured in person. Those simply tells me the right to inventor was guaranteed as freedom as much as voting right, I started to realize that the right should only vest in inventor, can’t be unsecured by law, inventor can assign to its agent to exercise that right on behalf of him, and can revoke any time because it was his freedom. Patent law should be built on this founding principle. AT the present corporations can unsecure all patents from inventors and pool all rights to use against inventors.
BillSeptember 25, 2019 08:31 pm
Anon, when you said my suggestions would move us in “the absolute wrong direction,” was it illogical to conclude you would prefer we move in the opposite direction?
I’ve been practicing patent law for almost 35 years now. I just disguise it well.
AnonSeptember 25, 2019 06:16 pm
“More” in the opposite direction is NOT a logical extension of my post, Bill.
That you would attempt to do so informs me that you are not an attorney, and are unfamiliar with the legal concepts involved here (note that this is not a snarky putdown, but more of a item that may affect the level of detail that I may want to include in the conversation).
As it is, the system we have delegates certain matters to juries and changing that is simply untethered to the fact that a patent matter is before such a jury.
Instead, I took it from your comments that you would prefer a certain state and THAT state was for a decidedly weaker patent right (as would be provided in the several factors of your desired state).
BillSeptember 25, 2019 01:03 pm
Interesting take, Anon. So, you think it would be preferable to broaden the scope of discovery, increase damage awards, and allow juries to decide everything (including claims construction issues)? That would certainly make IPR proceedings even more attractive to accused infringers.
AnonSeptember 25, 2019 12:33 pm
NONE of your three suggestions sound in equity and each sound in creating a more Efficient Infringer friendly system.
Such is the absolute wrong direction to go.
BillSeptember 24, 2019 10:34 am
Clay, I agree with you. Patent examiners do not have the resources that are brought to bear in an IPR proceeding, so they cannot examine applications with the same degree of scrutiny as the PTAB. I think the PTAB is doing a good job.
If Congress really wants to make our enforcement system more like China and Europe by making it easier to get an injunction, they should also: 1. eliminate, or severely restrict, discovery; 2. limit damages awards, and 3. do away with jury trials in patent cases.
AnonSeptember 19, 2019 04:16 pm
Clay. I “get” your thrust but balk at the notion of making examination be such a function of “monied interests.”
The better answer is to make the government function of examination better.
Clay MatthewsSeptember 19, 2019 10:50 am
As a chemical patent attorney representing a company in a crowded space I’m glad we have the IPR to kill “bad” patents. Companies play games with nomenclature to hide the ball against examiners making it difficult for them to find prior art. It’s much more difficult to hide the ball against competing companies. I’m sure similar games are played in the electronic/software industries. This bill looks like it was written for big pharma to make it more difficult to challenge their drug patents. I can understand this, but for most of the country, the IPR system is good and the PTAB is doing a good job. If we really want to improve the quality of issued patents we need to improve our ability to submit third party art directly to our Examiners. The EPO has given us the model to do this. Let business competitors help Examiners when folks are trying to hide the ball.
Jason LeeSeptember 18, 2019 11:02 am
@ anon19 here is your link; https://www.judiciary.senate.gov/meetings/innovation-in-america-how-congress-can-make-our-patent-system-stronger
I agree that “the Stronger Patent Act” must be passed in order to bring back protection to IP holders. But Silicon Valley will not let it happen and have bought up all the Rep. Dems. to make sure they get the votes they need to keep patents weak so they can continue their theft with out having to pay for IP licenses. Big Tech have made Billions in stealing IPs and have helped create the laws to drain out small patent holders in the courts and have taken out Injunction Relief so they can continue to appeal a verdict indefinitely.
Night WriterSeptember 18, 2019 06:33 am
My prediction is that this will never pass in a form that is helpful to patents. If it passes it will have enough strangeness in it that judges can use whatever is in it to invalidate any patent they want.
Yang ChiSeptember 18, 2019 12:34 am
I agree with Mr. Pomper overview and he a bang on that we need the STRONGER Patent Act passed. The problem is Silicon Valley will NOT let it pass. You see Silicon Valley donates more money lobbying government then the NRA. Companies like Apple and Google do not want to pay for patent licences and have made billions by bring in laws like the AIA Act PTAB to help them take patents for free with out having to pay ip holders a licence fee and use the court to drain out small patent holders. There is a 13% chance of seeing this bill passed and it’s because most of the house and senate have all been bought up by Big Tech. It’s wishful thinking to think this bill will see the light of day but greed is stronger then doing the right thing. It’s better to file for patent protection in Germany or China where they have injunctive relief which no longer exists in the U.S. because Silicon Valley EBay 101 killed it off for good so they can continue to fleece ip holders. Sad reality but it’s not going to change.
anon19September 17, 2019 02:47 pm
Where can one find the written testimony of the witnesses who later appeared at the hearing?