“These two counterpoints are difficult to reconcile, but it is important to be truthful about what they are: the self-serving statements of one of the biggest companies in the world vs. the warnings from a respected jurist who has no personal stake in the matter.”
On April 28, Google published a blog by their general counsel, Halimah DeLaine Prado, about the crisis condition of the U.S. patent system. Prado portrays Google as a strong supporter of the patent system, citing their history in initiatives to spur new inventions and technologies. For example, Google was a key player in 2013 in starting the Open Patent Non-Assertion Pledge (to not sue on open-source software). Google was also instrumental in the beginnings of the License On Transfer network (which helps members who have been sued by “patent trolls”). Google has provided technical support for the Prior Art Archive. Prado notes that Google has 42,000 patents, which she says they license at “fair value,” and sell to grow the portfolios of other companies, all in the interest of small businesses.
Prado declares that the U.S. patent system fails to promote innovation and progress, citing poor patent quality (though patent “quality” is a nebulous term that lacks any consistent definition). Prado also cites wasteful patent litigation as another culprit in the threat to innovation, with a 46% increase in the last four years (2018-2021). The blog also warns against unnamed “patent trolls” (another nebulous term).
Google encourages Congress to support the United States Patent and Trademark Office (USPTO) financially, so as to prevent issuance of “invalid” patents (though by law, patents are presumed to be valid (35 U.S.C. 282), and the U.S. Court of Appeals for the Federal Circuit (CAFC) has stated that USPTO examiners are presumed to do the work properly (See American Hoist & Derrick Co. v. Sowa & Sons, 725 F.2d, 1350, 1359 Fed. Cir 1984)). Google also urges Congress to end abusive litigation by eliminating the discretion of the USPTO to deny petitions challenging patent validity that are also the subject of ongoing litigation in federal court. (Google, which is a frequent filer of petitions to invalidate patents at the USPTO, has been trying to get this procedural discretion changed, without success for some time). Google further encourages the courts to act to prevent gaming the system by patent owners to get favorable jurisdictions, but Google does not explain how this game is being played.
In short, Google’s general counsel paints Google as a savior of the patent system.
Michel: Big Tech is the Culprit
On the other hand, only a few days later, on May 2, retired CAFC Chief Judge Paul Michel opined that Big Tech is hurting innovation and small inventors with their business model of infringement. Michel cites, for example, recent court orders for Google to pay $20 million in one case and $26 million in a second case for patent infringement. Apple is potentially liable for over $1 billion in one case for patent infringement, and another $300 million in a second infringement case. Google and Apple have appealed these district court decisions.
Michel criticizes the strategy of Big Tech companies, who he asserts deliberately infringe patents based on their financial ability to outspend the smaller patent owners who try to enforce their patent rights. Big court judgments might help change these tactics by the Big Tech companies. Michel suggests that more can be done by the courts to defend the U.S. patent system.
For example, he would like to see judgments upheld by the appellate court (absent reversable error), so that companies learn that infringement does not pay. Big awards are based on big sales, so complaints by Big Tech about large damages should be tempered. Michel believes that without the threat of a big judgment for infringement, these gigantic companies will continue to steal their small competitors’ technology, thereby threatening the patent system which supports innovation. Serial, willful patent infringement is a problem, according to Michel.
He also suggests there is a need for more uniformity from the courts in how to determine damages for patent infringement. Also, courts should not hesitate to find continuing infringement to be willful and to impose treble damages (as allowed by patent statute 35 U.S.C 284).
As Michel explains, investments in startup companies is at risk if Big Tech can simply take the inventions without significant consequences. This scenario will destroy entrepreneurs and their investors, thus discouraging innovation and prosperity. He believes that handing down large verdicts, and upholding them on appeal, is the only way to stop the business model of serial infringement by Big Tech.
On Closer Examination, an Easy Road to Choose
These two counterpoints are difficult to reconcile, but it is important to be truthful about what they are: the self-serving statements of one of the biggest companies in the world vs. the warnings from a respected jurist who has no personal stake in the matter. Since the first Patent Act of 1790, the American dream has been driven by innovation and the protection that the patent system provides. Startup companies grow and prosper through their creativity and new products and services. Patents have provided the incentives to invest time and resources to develop solutions to problems and better ways to do things in all industries. However, since the eBay decision, these benefits of the patent system have made it difficult for patent owners to get injunctions. Infringement without significant financial risk does not promote the progress of science and the useful arts. A wise statement, and good advice learned many years ago, is that a truly good and successful person (or business) does not need to blow their own horn because others will do it for them. Google’s boasting when compared with Judge Michel’s heartfelt concern about the U.S. patent system should make the road to follow on patent reform easy to choose.
Image Source: Deposit Photos