New Group Launched by IP VIPs Promises to Protect Inventors’ Right to Access Capital

A new inventors’ rights group was launched Thursday, September 19, with the aim of “helping startups, small businesses, and entrepreneurs defend their intellectual property rights and access capital.”

The Inventors Defense Alliance includes Professor Kristen Osenga, professor at the University of Richmond School of Law, as its chief policy counselor, and boasts a board featuring the Hon. Paul R. Michel, former Chief Judge of United States Court of Appeals for the Federal Circuit (CAFC); Russell Slifer, former United States Patent and Trademark Office (USPTO) Deputy Director; Alan Heinrich, attorney and adjunct faculty member at the UCLA School of Law; and Earl “Eb” Bright, president and general counsel of ExploraMed Development.

According to the IDA website, its objectives are to:

• “Serve as the voice for American inventors seeking access to capital through a range of advocacy programs and educational initiatives.
• Build public support for inventors’ rights by highlighting the value of intellectual property and the role IP protections play in supporting the economy and enabling entrepreneurs to create and build wealth, compete in the marketplace, and pursue the American dream.
• Support legislators and government leaders who understand the importance of strong IP rights and equal justice under the law.
• Build a broad-based coalition of pro-innovation stakeholders to fight for inventors’ rights.”

The IDA is a 501c(4) nonprofit organization, which allows it to lobby for causes, but it cannot receive tax-deductible donations.

“These giant companies figure that their smaller rivals can’t afford the long, costly lawsuits necessary to enforce those patents,” said Osenga in a statement. “And sadly, they’re often correct.”

Judge Michel, who is also a board member for the Council for Innovation Promotion (C4IP), said in the press release issued today that the IDA will be focused on protecting the right of inventors to partner with litigation finance companies so “they’re able to afford the steep legal bills associated with defending and enforcing their patents.”

An op-ed featured on the IDA website that was written by Michel for RealClear Policy in March 2023 was critical of recent efforts by Judge Colm Connolly of the U.S. District Court for the District of Delaware to impose disclosure requirements that Michel said would adversely impact smaller companies that use third-party funders for litigation.

Judge Connolly’s standing orders, issued in 2022, provide for heightened reporting requirements for the identities of real parties in interest and third-party litigation financiers and have created some controversy regarding disclosures of sensitive corporate information. Michel said in his op-ed that “the new requirements will make it even easier for Big Tech firms to employ a strategy of ‘efficient infringement’ — willfully stealing smaller rivals’ technology and then mustering armies of lawyers to drag out any lawsuits until the cash-strapped startups cry uncle and settle out-of-court for pennies on the dollar.”

An explainer posted to IDA’s website this week calls litigation funding partnerships “perfectly ethical” and “no different than an individual finding a lawyer who will work on contingency in a medical malpractice or wrongful termination case.”

“Our educational and advocacy efforts will help ensure inventors have the policy environment and financial resources they need to thrive and drive economic growth,” said IDA board member Heinrich.

The IDA website also includes a link to an article by the International Legal Finance Association (IFLA) criticizing witnesses who testified at a hearing of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, titled the “The U.S. Intellectual Property System and the Impact of Litigation Financed by Third-Party Investors and Foreign Entities,” earlier this year. The article referenced a piece published on IPWatchdog, authored by Gautham Bodepudi of IP Edge, which charged that the hearing and certain witnesses incorrectly characterized the economic realities of the patent market.

In a statement sent to IPWatchdog, Osenga said that the impetus for focusing on inventors’ right to capital “is about empowering inventors in a landscape that frequently sidelines their rights.”

She added that the organization will also distinguish its legislative advocacy efforts by telling the “other side of the story.”  She explained:

“So far, most of the stories being told are from the perspective of the big companies who can sustain expensive litigation battles. IDA will be able to serve [in] an educational and advocacy role for the larger public and lawmakers engaged on this issue through speaking to the media, writing op-eds, etc., to explain the inventor’s side and why having access to financial partnerships is critical to innovation.”

The IDA’s launch comes on the same day three key pro-patent bills were scheduled for mark-up by the Senate Judiciary Committee. However, the bills, which would introduce major reforms in the areas of patent eligibility, Patent Trial and Appeal Board (PTAB) procedures and information collection processes around innovation, were held over because Senator Thom Tillis (R-NC), a key sponsor, was unable to attend the hearing.

This article was updated on September 19 to add Kristen Osenga’s comments.

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