Posts in Guest Contributors

As is evident from Figure 2, a significant problem affecting USPTO performance has been identified as the Request for Continued Examination (RCE) Backlog, which grow dramatically from 2009 into 2013. The intricacies of RCE practice go beyond the scope of this article, but it is RCE practice that is a primary problem facing the USPTO. At the end of the USPTO’s 2013 End of Fiscal Year, approximately 78,272 RCE applications were awaiting examination at the USPTO. These RCEs divert resources away from the examination of new applications.

In this Part III, we will discuss the Covered Business Methods (CBM) expansion and the proposed elimination of post grant review estoppel. If these provisions are enacted it will provide greater incentive to challenge granted patents, making serial challenges the new norm. This will substantially and negatively impact small business innovators who will be forced to continually fight to keep the patents they have obtained after having already spent many years during patent prosecution to obtain the rights. This means patent rights will never be more than an expectation and not a true property right. Therefore, if these provisions are enacted it will mean no patent is every truly safe, no title is every quieted, and this will substantially, and negatively, impact investment opportunity and ultimately the commercialization of innovations.

The US House passed the Innovation Act (HR3309) in December 2013. The Senate is now well on its way to incorporating this legislation which will make Americans poorer. The bills have many problems that will inhibit small inventors, but the most insidious are “Loser Pays” and “Pay to Play”. It changes the law, singling out inventors as a class so onerous that only they must pay the other side’s legal fees if they don’t win every claim. Pay to Play makes inventors guarantee payment up-front. Some proposed Senate bills (e.g.: S.1013 & S.1612) make sure that almost all Americans and most small companies will never be able to afford to enforce their patents on their inventions.

For small business, patents will become mostly unenforceable due to the proposed much higher upfront cost of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation. Legislating disincentives for capital investments will result in the loss of many hundreds of billions of dollars of wealth in America and dry up the major source of new jobs, small inventing businesses… Patents are the number one indicator of regional wealth according to the Federal Reserve Bank… If these “Patent Reform” bills are signed into law, they will discourage small business patents, and the contrapositive indicates that we will be a poorer nation.

The above-enumerated problems of the current patent system are real and barriers to further innovation and job creation. But the solutions do not require a comprehensive definition of a troll to fix the patent system. Lady Justice is blindfolded for a purpose. Justice in the US should be meted out objectively regardless of identity. So too in the instant situation. It is not the identity of the actor that needs to be evaluated, but the character of the action. We need to assure that frivolous, predatory actions are penalized and prevent the abusive tactics used by many that harm our innovative culture.

“Without a strong healthy business nothing else really matters–not even IP. A successful IP [plan] is one that follows the business and strategizes to meet its goals,” says Cynthia Raposo, Senior Vice President of Underarmour. The questions that need to be answered that go into formulating an intellectual property strategy–like when the company wants a profit, whether it is interested in attracting investors or academic collaborations or buyers, whether it will become a public or global company, what its niche in the market is, how fast developments in the field are– can’t be fully answered without not only consulting the business people, but being on the exact same page as them.

As Eric Schmidt, CEO of Google, spoke about on 60 Minutes, true innovation does not come from the large corporations. Instead, it is some “graduate student” or “crazy person” that makes change, such as the obscure Wright Brothers warping the airplane wings to control flight. Without a patent system, innovators and inventors from all walks of life will be unable to safeguard their intellectual property and profit, violating a central tenet of the patent system. Penalizing the poor students and the visionaries by hindering their chance to protect their technological advances in patent litigation is not justifiable and is not right. Legislation making fundamental changes to the law to thwart innovators (and their backers) getting their say in court is highly suspect and perhaps unconstitutional. Further, in a time when Americans have lost countless manufacturing jobs and have retooled, it does not make sense to weaken something at which Americans are good: innovating and inventing.

What if (Almost) Everything You Thought You Knew About America’s “Broken” Patent System Was Wrong? What follows is the fourth and final installment in the “Myths of the Patent Wars” series. The necessary legislative effort to curb bad actors in the patent industry has been “hijacked” by a small handful of very powerful global technology companies intent on forcing broader…

Professor Paul Janicke of the University of Houston Law School conducted a study of all damage verdicts in patent infringement cases between 2005 and 2007. He found no pattern of “runaway jury awards.” In fact, many of the biggest damage awards of that time, including the $1.5 billion award Lucent won from Microsoft, were set aside or greatly reduced by the judges. Even Apple’s $1 billion 2012 patent verdict against Samsung was recently slashed 43 percent. Why, then, are claims of a “broken” patent system rife with “excessive damage” awards so widely believed?

In a magazine with the name Fortune—devoted to capitalism and free markets—it is surprising to see an article that would promote closed markets and limited ownership of property within its pages. I doubt Fortune would support laws restricting real estate ownership to those who build on the land and live on it. I doubt Fortune would consider supermarkets to be “grocery trolls” because they sell goods from others that the stores never actually produce. It is time to reconsider these foolish restrictions on intellectual property ownership and return to treating intellectual property as we do all other property.

Patent licensing, in fact, was the principal means by which new inventions were commercialized during the decades before in-house corporate R&D departments emerged in the early 20th century. Publications such as Scientific American were founded expressly to facilitate the trade in patents, and it regularly featured descriptions of new and interesting patents, which commercial enterprises then licensed or purchased to use in their product development efforts. American Bell Telephone’s new product pipeline, for example, operated like most others at the time. According to its 1894 annual report, the company’s R&D department licensed 73 patents from outside inventors, while developing only 12 from its own employees.

IDRI granted license rights to its world-class vaccine adjuvants to Immune Design Corporation (IDC), which was established in Seattle in 2008 with a focus on cancer, allergies and certain infectious diseases. The royalties and other funds received from IDC have helped to support IDRI’s programs, and IDC’s clinical safety data relating to the adjuvants have been vital in IDRI’s ability to accelerate the development of vaccines for tuberculosis and leishmaniasis, two diseases with an immense global health burden.

These deceptive claims are meant to justify and buttress a legislative agenda aimed at immunizing this small coterie of technology giants from the costs of their patent infringing behavior… The estimated 124-plus smartphone patent suits filed between 2009-2012 are less than one-quarter the number of patent suits filed during the first “Telephone Wars” of Alexander Graham Bell’s time. Back then, the American Bell Telephone Company and its successor, AT&T, litigated an astonishing 587 patent cases alone. Even more surprising, given the common belief in a patent litigation “explosion” today, patent and legal records from the golden age of the U.S. Industrial Revolution in the mid-19th century show that the patent litigation rate at that time — defined as the number of patent suits filed in a decade divided by the number of patents issued in that decade — reached 3.6 percent.