Answering the Question, ‘What is the Conservative View of Patent Rights?’

“It is proven in this errant PTAB experiment…that it is impossible to thwart corruption when power is consolidated and controlled by a single person. This fact is not conservative or liberal, Democratic or Republican. It is fact of human nature.”

conservativeJoe Matal, the former Acting Director of the U.S. Patent and Trademark Office (USPTO), recently posed as a question to those sponsoring H.R. 5874, the Restoring America’s Leadership in Innovation Act (RALIA): “What is the ‘conservative’ position on patents and other intellectual property?”

It is an interesting question. What is it about property that makes it property? That’s not a liberal or conservative, or a Democratic or Republican question. Property rights are something everyone learns about early in life when your older sibling grabs your teddy bear and takes it away from you. Property rights are innate in humans. Just about everyone would proffer a similar definition: that’s mine and you can’t take it away – at least not without a fight.

Because fights turn into battles and battles into wars, we created a government to ensure that our property rights are protected from those who would unjustly take them. This, we hoped, would keep us from bludgeoning each other and keep foreign invaders from taking our stuff.

Matal’s question should be directed to how a government protects its citizen’s property rights.

Separate and Distribute Power

If you look at any low income country (LIC) and wonder if they will remain a LIC, look at their property rights system. If the dictator can grant you property and then take it away, nobody will invest in that property because nobody can know if the dictator will just take it back, resulting in all that was invested being lost.

In American government, the power over property rights is both separated and distributed. The executive branch grants the property right. A separate branch, the judicial branch, has the sole and exclusive power to take it away.

Further protecting property rights, judges are distributed across the many states and do not have a reporting hierarchy. Judges report to the Constitution only. Appeals courts can overrule them, but they can’t tell them what to do.

Your property rights are protected by this separation and distribution of power.

The PTAB is Like a Dictatorship

Matal argues that patents should be treated like any LIC treats their property rights. The Patent Trial and Appeal Board (PTAB) was created in the America Invents Act of 2011. Matal was the senior Senate Judiciary staffer at that time and a key player in its passage.

The PTAB is an administrative tribunal with the sole mission of invalidating patents. It is a division of the U.S. Patent and Trademark Office (USPTO) with the power to grant patents. In other words, the USPTO Director has the dictatorial power to both grant and take away patent rights, a personal property right under black letter law.

Just like dictatorships, the PTAB has the power to drive entire industries and to break up monopolies. This has brought incredible political pressure on the PTAB from Big Tech and Chinese Communist Party (CCP)-controlled multinationals.

Most patents challenged at the PTAB are challenged by Big Tech and CCP multinationals. Of the top ten challengers, Apple is on top (most of its manufacturing is in China) and three others are CCP controlled multinationals with total challenges of over 1,000 patents.

The PTAB invalidates an unbelievable 84% of the patents it fully adjudicates. Almost all are invalidated as obvious using multiple dubious prior art references. In one case, a Swiss Army Knife was used to invalidate an automatic door lock.

Molly Metz’s jump rope is another case where patents were unjustly invalidated as obvious. The infringer, Rogue Fitness, met with Metz and discussed licensing her jump rope. Rogue did not have a similar product on the market. In fact, they had not thought of a similar product until they saw Metz’s jump rope. Certainly, Metz’s jump rope is a commercially successful product, so if it was obvious before Metz invented it, why was Rogue not already selling it?

Matal makes the argument that PTAB Administrative Patent Judges (APJs) are experts in the technology that they review. He is mistaken. APJs have technical undergrad degrees, but a whopping 76% of APJs have two years or less of technical experience, and 60% have no technical experience at all. APJs are government lawyers; they know law, not technology.

Some APJs have come from Big Tech companies, taken cases where their former employer is a party, found for their former employer, and some have even gone back to work for their former employer, either as an employee or as outside counsel. There is no judicial code of conduct governing anything that they do.

It is proven in this errant PTAB experiment (as it is has been throughout all of human history) that it is impossible to thwart corruption when power is consolidated and controlled by a single person. This fact is not conservative or liberal, Democratic or Republican. It is fact of human nature.

H.R 5874 – the Restoring American Leadership in Innovation Act.

Matal argues that H.R. 5874 will ship manufacturing and jobs to China. He is mistaken here, too. For over 200 years, the U.S. patent system drove the United States to lead the world in virtually every area of technology.

This started to change in 2006, with eBay v. MercExchange, where the Supreme Court established a public interest test effectively eliminating injunctive relief. Under eBay, if they steal it, they keep it – even if they lose in court. This opened the floodgates to massive infringement on the patents of small entities by multinational corporations.

Then came the America Invents Act (AIA) with its creation of the PTAB (2011). As described above, if they steal it, they will likely invalidate the patent at the PTAB, thus cutting their costs of stealing it.

In Alice v. CLS Bank (2014), the Supreme Court again legislated public policy creating an exception to patentable subject matter called the “abstract idea.” Unfortunately, they did not define what that is and thereby released a demon into the patent system that effectively neuters most tech patents killing emerging competition to Big Tech and CCP- controlled multinationals.

These errant policy actions have enabled Big Tech to monopolize and destroyed early-stage investment into U.S. startups, moving that investment to China.

All H.R. 5874 does is return patent law back to what it was prior to 2006. It worked for over 200 years. It will work again. Matal is wrong.

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Author: tashatuvango
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15 comments so far. Add my comment.

  • [Avatar for Anon]
    Anon
    December 3, 2022 10:27 am

    mike,

    The Massie link is awesome.

    I listened all the way through, and would but add to the last bit (power of injunction) my previous points concerning that the sharing of authority (as authorized through the Constitution) from the Legislative Branch to the Judicial Branch — at the point of 35 USC §283 — falls to strict interpretation of shared Constitutional powers.

    See: https://www.law.cornell.edu/uscode/text/35/283

    Copied here in total for convenience (my emphasis added):

    35 U.S. Code § 283 – Injunction

    The several courts having jurisdiction of cases under this title may [Note 1] grant injunctions in accordance with the principles of equity [Note 2] TO PREVEN THE VIOLATION OF ANY RIGHT SECURED [Note 3] secured by patent, on such terms as the court deems reasonable.

    Note 1: this power to the courts is not an edict, which means that the power shared is one the Courts may or may CHOOSE to use.

    Having chosen to use, the Courts need be consistent in its use.

    Note 2: As I have outlined, the principles of equity have been misplayed by the Courts, who have NOT taken in context the nature of the right transgressed in multiple ways – which include at a minimum:

    2A: The actual right transgressed is ONLY a negative right of NOT ALLOWING OTHERS – there is NO positive right of making a product.

    2B: This actual right is almost PERFECTLY aligned with the power of injunction.

    2C: Traditional view of “injunction” as an equitable ‘atom bomb’ is NOT APPROPRIATE given 2A and 2B above.

    Note 3: This sharing of power was designated strictly for the benefit of the one that has obtained the property rights of a granted patent. It is expressly stated that the intent of the shared power is FOR the benefit of the transgressed. The Courts have misapplied “equitable concerns” in any deliberation once the matter of a transgression has been found. Certainly, preliminary injunction reasoning MAY be different based on the proper use of the Constitutionally shared power, but notions of Injunction after transgression has been found must adhere to the strict sharing of power.

    Thank you for sharing the link.

  • [Avatar for Anon]
    Anon
    December 2, 2022 01:22 pm

    xtian,

    https://youtu.be/JB8BLMMVFLg

  • [Avatar for mike]
    mike
    December 2, 2022 02:27 am

    No inventor or small business should trust Matal. Earlier this year in a House Judiciary Committee Hearing, Congressman Massie asked Matal who are the most frequent filers at the PTAB. After Matal replied with “basically the people who get sued the most often”, he rambled on and on, trying to justify their use of the PTAB against smaller companies. He apparently is oblivious to the fact that the reason they “get sued the most often” is because they infringe the most often.

    Don’t believe me? Just watch his word salad, and you’ll see Massie bring Matal back to Earth when he cuts him off and asks “Ostensibly, what are these companies getting sued for?” Matal then confessed, “for patent infringement”. Video is here: https://www.youtube.com/watch?v=Fr_IzvJp_t8

    That House hearing video reveals many problems with the PTAB and how it is not being used as designed. For example, only 2% of the 14,000 PTAB cases are small businesses vs NPEs. Plus, the PTAB is used by Korean and Chinese companies to take away US patents, even from US citizens. From the hearing, Samsung was reported to have filed 549 IPR petitions, Huawei 114 petitions, HTC 115, and ZTE 127.

    Make no mistake, these “poor little infringer-companies” that use the PTAB get sued because it is they who are breaking the law and disrespecting patent rights of inventors. Not the other way around. The infringers are the true cause of the problem.

  • [Avatar for CharlieSeattle]
    CharlieSeattle
    December 1, 2022 08:02 pm

    PTAB was created purposely to deny Due Process. PTAB is illegal and must be eliminated.

  • [Avatar for jeffswaterworks]
    jeffswaterworks
    November 30, 2022 07:23 pm

    Bob, most technical patent trials that I’ve looked at more than casually have had the district court judge employ a technical expert who is paid by both parties to the lawsuit.

    I’ve also seen where the author of a CAFC opinion wrote; 1) “…While the Board confusingly states at different points…”, 2) “…The
    Board at different points confusingly relied on…” AND called the Final Written Decision by the PTAB panel as “incomprehensible” and noted that it made her uncomfortable. Experts my donkey! I

  • [Avatar for Not disclosed]
    Not disclosed
    November 30, 2022 05:52 pm

    As someone who led an effort to prevent a chinese company from continuing to blatently infringe our patents, I know from firsthand experience how CLS Bank v Alice is used to not only destroy innovation, but also damage the inventors respect for the patent system at all? How in the world could Justice Thomas allow lower courts to invalidate upon “abstract ideas” when every single tech patent has abstract ideas ideas reduced to practice?

    Worse, my firm invented whole lines of technology later appropriated by other firms. We had over 400 other inventors reference our patents. But when it got to the courts, attorney-judges told these inventors that our inventions were nothing special. End this madness now.

  • [Avatar for Anon]
    Anon
    November 30, 2022 11:09 am

    Sam,

    Where are the (any) “D’s”…?

  • [Avatar for xtian]
    xtian
    November 30, 2022 11:01 am

    What is the “conservative view” of real property? Should this be any different? Why can’t we treat real and intangible property like one of my favorite characters:

    “Question. What if I see something that I wanna take and it belongs to someone else?”
    “Then you will be arrested.”
    “But what if I want it more than the person who has it?”
    “Still illegal.”
    “That doesn’t follow. No, I want it more, sir. Do you understand me?”

    Movie and character?

  • [Avatar for Max Drei]
    Max Drei
    November 30, 2022 10:34 am

    Paul, my answer to the question, what is the “conservative” position in patent law would be that i) good patents must be swiftly and efficiently enforceable while bad patents must be swiftly and efficiently revoked (because they are inherently a restraint on free trade and free trade is an important public good) and ii) the courts have a duty to craft the law so that one can swiftly and efficiently distinguish the good patents from the bad, the obvious claims from the ones that aren’t obvious.

    The PTAB is (presumably) inspired by the post-issue opposition procedures of the 1973 European Patent Convention. The opposition process at the EPO is (still, after 40 years) routinely used by all types of user at the EPO, big, medium and small, European, American and Asian. It is very efficient, can be very swift and nobody dubs it a dictatorship. Why it can’t be replicated in the USA is (I suspect) a function of your legal system in general, not something specific to patent law, and nothing to do with China.

  • [Avatar for Curious]
    Curious
    November 30, 2022 10:02 am

    Matal makes the argument that PTAB Administrative Patent Judges (APJs) are experts in the technology that they review. He is mistaken. APJs have technical undergrad degrees, but a whopping 76% of APJs have two years or less of technical experience, and 60% have no technical experience at all. APJs are government lawyers; they know law, not technology.
    This identifies is one of the biggest overselling of the PTAB by the AIA defense league. The fact that an APJ has a technical degree doesn’t mean that the APJ actually understands (or has to the background to understand) the technology in front of him/her.

    Moreover, as for the “they know law,” I wouldn’t necessarily concede that point. APJs are not necessarily the cream of the crop when it comes to patent attorneys. A 10-year patent attorney with litigation experience is going to make two times (at a bare minimum) in private practice than they would as an APJ. And that 2x is more likely 3x or 4x (if not much more). While I know of some talented patent attorneys that have gone to the USPTO, the USPTO attracts more dregs than it does cream.

    BTW — you missed this blatantly incorrect statement by Matel:
    If RALIA were enacted, such USPTO review would be eliminated — the only way to contest the validity of a patent would be in a jury trial in civil court.
    Issued patents have long been contested at the USPTO via the reexamination process, which was not eliminated by HR5874.

    This is a profile of Joe Matal published 5 years ago on IP Watchdog.
    https://ipwatchdog.com/2017/06/08/meet-joe-matal-profile-uspto-interim-director-joseph-matal/id=84243/
    A couple of interesting things from the bio. One, “he was recently detailed to senior staff to be Chief of Staff to Michelle Lee for several months before returning to the Solicitor’s Office.” Anybody who worked in a prominent role for the worst Commissioner in USPTO history (Michelle Lee) is automatically suspect in my book. Second, this is his education background: “Matal completed his undergraduate studies at Stanford University in 1993, graduating with a bachelor’s degree in public policy and English.” Public policy and English? Seriously?? Matal doesn’t even have the necessary background to be registered to practice before the USPTO.

  • [Avatar for Breeze]
    Breeze
    November 30, 2022 09:16 am

    “And district court judges? ?”

    I think district court judges, and juries, have a healthy skepticism of the 4, 5, 6+ reference hindsight combinations that APJ’s swallow hook, line, and sinker. Our system could certainly use more of that skepticism.

  • [Avatar for concerned]
    concerned
    November 30, 2022 06:20 am

    Just take me back to 2014 when my business partner said “Get a patent.”

  • [Avatar for Sam]
    Sam
    November 30, 2022 12:24 am

    Cosponsors of H.R.5874 – Restoring America’s Leadership in Innovation Act of 2021

    *indicates original cosponsor

    11/04/2021 – Rep. Gohmert, Louie [R-TX-1]*

    11/04/2021 – Rep. Gosar, Paul A. [R-AZ-4]*

    11/04/2021 – Rep. McClintock, Tom [R-CA-4]*

    01/12/2022 – Rep. Sessions, Pete [R-TX-17]

    01/25/2022 – Rep. Greene, Marjorie Taylor [R-GA-14]

    03/07/2022 – Rep. Steube, W. Gregory [R-FL-17]

    03/17/2022 – Rep. LaMalfa, Doug [R-CA-1]

    03/24/2022 – Rep. Moore, Barry [R-AL-2]

    03/24/2022 – Rep. Donalds, Byron [R-FL-19]

    03/31/2022 – Rep. Boebert, Lauren [R-CO-3]

    03/31/2022 – Rep. Tiffany, Thomas P. [R-WI-7]

    04/04/2022 – Rep. Fallon, Pat [R-TX-4]

    04/04/2022 – Rep. Gooden, Lance [R-TX-5]

    04/05/2022 – Rep. Davidson, Warren [R-OH-8]

    04/06/2022 – Rep. Mooney, Alexander X. [R-WV-2]

    04/07/2022 – Rep. Norman, Ralph [R-SC-5]

    04/14/2022 – Rep. Johnson, Dusty [R-SD-At Large]

    05/03/2022 – Rep. Cloud, Michael [R-TX-27]

    05/06/2022 – Rep. Roy, Chip [R-TX-21]

    05/06/2022 – Rep. Buck, Ken [R-CO-4]

    05/17/2022 – Rep. Posey, Bill [R-FL-8]

    07/01/2022 – Rep. Good, Bob [R-VA-5]

    07/28/2022 – Rep. Herrera Beutler, Jaime [R-WA-3]

    08/12/2022 – Rep. Arrington, Jodey C. [R-TX-19]

  • [Avatar for Josh Malone]
    Josh Malone
    November 29, 2022 06:22 pm

    Take us back to 2006 — no compulsory licensing, no crony PTAB, no trillion dollar monopolies, and access to justice — where inventors and startups flourished.

  • [Avatar for Bob]
    Bob
    November 29, 2022 06:07 pm

    “APJs have technical undergrad degrees, but a whopping 76% of APJs have two years or less of technical experience, and 60% have no technical experience at all”

    And district court judges? ?

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