Posts Tagged: "US Patent System"

“Wrongdoing should be punished more severely so that IP infringers will pay a heavy price,” Xi said. At a time when President Xi is actively moving China’s IP policy to a place where infringers are met with harsher penalties, U.S. leadership in Congress, especially in the House of Representatives, seems to be opening their arms yet again to the efficient infringer lobby. Congressman Bob Goodlatte (R-VA), chairman of the House Judiciary Committee, and Congressman Darrell Issa (R-CA), chairman of the House IP subcommittee, support legislation and poor narratives that continue attempts to further gut the U.S. patent system, allowing infringers a free holiday and the ability to infringe without consequence or penalty.

All too often I’m reminded that today’s American patent system is more droit du USPTO than it is the system for the innovative masses as envisioned by Thomas Jefferson and other of our Founding Fathers. It costs thousands of dollars to obtain a patent. It costs millions to defend that patent against an infringer. Yet insidious narratives on “patent trolls” continue to echo in the rank and file at Congress as if infringement suits brought by tech licensing companies is somehow a new phenomenon and not a system which turned Thomas Alva Edison and Alexander Graham Bell into storied heroes of American innovation. Today’s Standard Oils, the Alphabets and Apples of the world, have mounted an impressive smear campaign that has whipped up a debate which is completely out of proportion with the real problem at hand. For every MPHJ Technologies, there are a thousand Smartflashes, companies who had good ideas stolen and have a rightful case of infringement to take to district court. For every Jay Mac Rust, there are countless Josh Malones: good, decent, forthright individuals who believed in a good idea, took a leap of faith, and are worse off for it. They are worse off for having invested in the patent system in the first place even as their invention is proven valuable by the activities of infringers.

Overall, incoming USPTO leadership must have the capacity to see the “big picture” and weigh options for improving our innovation economy. Recognition that recent changes have weakened the patent system too much, and the leadership ability to make changes that achieve the appropriate balance between enforcing strong patents and limiting abusive enforcement of meritless patents, should be criteria in selecting the next Under Secretary of Commerce for Intellectual Property and Director of the USPTO.

It is imperative that the next PTO Director hold certain fundamental believes. At a minimum, the next Director must: (1) View issued patents as an important and valuable private property right; (2) Believe issued patents are entitled to the statutory presumption of validity in all forums; and (3) Be committed to fundamentally reforming post grant procedures in order to guarantee both procedural and substantive fairness.

A $1 trillion a year industry not wanting to pay innovators less than a 1% royalty on the innovations they appropriate (i.e., steal) for their own profits seems like a terrible price to pay given the national security and economic consequences of forfeiting our world leadership to the Europeans and Chinese… Google and Uber are locked in a patent battle over self-driving automobiles, so does that make Google or Uber a patent troll? What about General Electric, Apple, Samsung, Microsoft, Cisco, Oracle, Whirlpool, Kraft Foods, Caterpillar, Seiko Epson, Amgen, Bayer, Genzyme, Sanofi-Aventis, and Honeywell, to name just a few?

despite the media widely lambasting Smartflash as a patent troll, inventor Patrick Racz actually created a company called Internet plc “to develop, manufacture, and commercialize the invention”; Smartflash was created as an entity to hold the intellectual property… One reason why this case might warrant an en banc rehearing includes the fact that the case was decided by a different judicial panel than the panel which heard Smartflash’s arguments in the case. The March 1st decision was handed down by a panel which included Chief Judge Sharon Prost, Judge Pauline Newman and Judge Alan Lourie. An order entered in the case last June, however, lists a Fed. Cir. panel which includes Judge Jimmie Reyna, Judge Richard Taranto and Judge Kara Stoll. It appears to be unclear why a wholesale change of judicial panel was made leading up to the March 1st decision of the Federal Circuit.

Phyllis Schlafly was a giant who well understood the importance of the U.S. patent system, why structural choices were made that lead to a unique patent system compared to the rest of the world, and how vital it was to our national and economic security. In the end, as she knew she would not live forever, she wanted those similarly dedicated to the mission to understand the that work must continue, which was a recurring theme of the celebration and remembrance of Schlafly last night.

The true agenda of those who support further reform of the U.S. patent system is as follows: to discriminate against entities which license technologies instead of manufacture; to increase the costs of asserting patent rights to the detriment of individuals and startups; and to stilt the conversations surrounding tech licensing in favor of the infringer bringing a product to market. “If you trip over our patent, you’re a thief. If we trip over your patent, you’re a troll,” Giancarlo said… “Let’s call patent reform for what it is: a blatant economic and power grab by tech firms to infringe on technology created by others,” Giancarlo said. In his opinion, the true trolls are the entities trolling Congress to get a competitive advantage over smaller entities.

Typically, the reform debate over the U.S. patent system features smaller players, but America’s largest tech firms also have issues with the patent system, which go way beyond any single company’s ability to sustain success… Leading off the panel’s remarks was Manny Schecter, chief patent counsel for IBM, who noted that innovation is a risk-bearing operation. “The likelihood that you ever make an investment [into research & development] is based on the return you anticipate on getting in that investment,” Schecter said. Any reduction to the anticipated return caused by uncertainty in IP policy discourages R&D investment. Schecter added that one of the ways in which intellectual property promotes innovation is by preventing others from taking innovations which are not their own. “We want to minimize or control uncertainty in the IP space if we want to maintain an IP surplus and promote the viability of the economy,” he said.

As you read about the truly mind-numbing stupidity coming from decision makers, whether it is MRI machines declared to be abstract ideas or diagnostics for various forms of cancer not being patent eligible, realize that the overwhelming bulk of this stupidity relates to inventions you cannot touch or operate in any real world sense. While America’s patent remains adrift, shift innovation into the real world if you are interested in a U.S. patent. Truly groundbreaking advances in computer technologies and in the life science sector should only be undertaken if you have a global patent strategy that does not require obtaining useful patent protection in the U.S.

We need to remember that we’ve seen America’s patent system in near complete collapse before. In the 1960s and 1970s the Supreme Court never saw a patent that was valid, which lead to the creation of the United States Court of Appeals for the Federal Circuit. In the 1970s and early 1980s there was great concern that Japan would win the technology future and America would become an also-ran in the burgeoning technological revolution, but that never happened… In the 1980s, a strong patent system was the primary driver for the economic achievements that unleashed American enterprise and allowed the United States to compete on the world stage. It worked in the 1980s to address what was a similarly difficult time, and it will work today.

At the same time that America’s business climate has become too acidic for a vast majority of domestic startups, the nation has also been losing its place in the global supply chain while other major global economies, like China’s, are becoming increasingly self-reliant… This report identifies trending emerging tech like virtual reality, augmented reality, machine learning, smart robots, gesture control devices, smart data discovery and virtual personal assistants, as well as consumer expectation levels and the length of time until the emerging tech becomes fully commercializable. As Aronoff noted, much of the innovation in those sectors relies on software. “Is that even protectable anymore?” Aronoff asked… With the new patent enforcement gauntlet in the U.S., what does it really take for a small company to protect its IP in the current system?

The experts in attendance reminded us of the insanity of the compulsory licensing system that now pervades the U.S. patent marketplace, which when explained in terms of real estate is obviously absurd. A man came home from work one day to find a strange family living in his dining room. He wanted to have them evicted but was told he would have to spend five years and millions of dollars proving in court that he owned the room where the invaders had pitched their tent. A judge finally found that indeed he owned his dining room. But instead of ordering the family’s eviction she ordered the invaders to pay rent to the homeowner in an amount hypothetically determined by calculating what he and the squatters would have agreed to before his unwelcome visitors moved-in.

“The results from the Patent Trial and Appeal Board reflect the procedures it applies, and in my judgment the procedures are wildly off base,” Judge Michel explained… “We’ve had PTAB final results… whatever the intentions were we don’t have to speculate… we have ample evidence of how it worked in practice. We know it doesn’t work satisfactorily.” *** “I don’t think things are really getting much better,” Kappos said. “We are in what I refer to as the leaky life raft.” When you are stranded and a leaky life raft comes along it looks great, but it doesn’t change the fact that it is still a leaky life raft. “The best you can say about 101 is that it has stabilized in a terrible space.”

For more than two centuries, the U.S. Constitution, black letter law and precedent construed a patent as a property right. This is important because it is the nature of property rights that enables investment in early stage startup companies, especially those with cutting edge technologies in highly competitive fields like pharmaceuticals, biotech, smart phones, enterprise software, internet, semiconductors and other technologies critical to our infrastructure, military and much more… The same agency that takes inventor money to grant patents takes infringer money to destroy them. This creates an appearance of double dealing, and inventor belief that the USPTO is breaching the “grand bargain” of the patent system. Inventor confidence is at an all-time low because inventors are lured away from using trade secrecy protection, but then given nothing in return for disclosure. The effect of PTAB on inventors is devastating. Since institution of PTAB, over 50% of inventors simply quit rather than suffer the financial and stressful indignation of post grant invalidation.