Save the Inventor

The New York Times Got It Wrong on Patents

rich — Sat, 16 Apr 2022 22:41:31 +0000

On Saturday, April 16, 2022, the New York Times posted an opinion piece called “Save America’s Patent System”, calling for an overhaul of the U.S. patent system. This piece is deeply flawed and reinforces the narrative of those engaged in weakening the U.S. patent system. Here are just a few of the key issues the NY Times got wrong:

The 2011 America Invents Act did not help U.S. inventors and has resulted in a weakening of U.S. patents with the result that America has slipped from number one to number 11 in global innovation, according to Bloomberg.
The Times states “…one simple thing that officials can do right now is give patent examiners more time and resources to do their jobs.” We agree and if the USPTO’s fees were not regularly diverted away from the job of reviewing patents there would be more examiners resulting in more time for thorough reviews. Fully funding the USPTO as recommended in the STRONGER Patents Act is a key step, but the Times seemed unaware of the monetary diversion or this legislation which would better support inventors than the legislation promoted in the piece.
The Times conflated weak patents with patent trolls and the need for more process to challenge bad patents. Once again, the patent troll narrative is trotted out to support spurious policy changes for challenging patents. The data shows that operating companies have brought most infringement lawsuits, not bad actors holding patents just to sue.
To combat so-called patent trolls and these weak patents, the Times calls for passage of the Restoring the American Invents Act. As we have written previously, PTAB trials should be a cost-effective alternative to district court litigation, not an additional avenue for challenging patents. The USPTO has updated the post-grant system at the PTAB to make it a fairer and more balanced system. The RAIA would reestablish PTAB trials as a parallel avenue, thus stacking the deck against small inventors and innovators.
In its focus on supporting efforts that would actually weaken rather than strengthen the U.S. patent system, the editorial board completely missed the racial, gender-based, and socioeconomic barriers to inventing and patenting. Passing legislation like the Inventor Diversity for Economic Advancement (IDEA) Act would help close the gaps in our innovation ecosystem, making America more competitive and the USPTO an innovation engine.

Save the Inventor hopes the New York Times will take the time to listen to small inventors and rethink its position on what will save the U.S. patent system.

Why Big Tech is Seeking to Undermine PTAB Reforms

admin — Wed, 05 Jan 2022 16:39:16 +0000

As we explained in an earlier blog, Big Tech companies are now pushing legislation that would reverse recent reforms at the PTAB (Patent Trial and Appeal Board). These reforms have made the Board fairer and more balanced, including reinforcing Congress’s original intent that the PTAB should be a cost-effective alternative to district court litigation, not an additional avenue for challenging patents.

If successful in reversing these reforms, Big Tech will tilt the balance further in their favor and make it even harder for patent owners to defend their intellectual property. This is a blatant effort by them to gain more power, allowing them to crush small competitors and maintain their market dominance.

Big Tech companies and their lobbyists promote the PTAB as the saving grace for startups and small businesses seeking a low cost and efficient tool for challenging and invalidating “bad patents” that they are accused of infringing. But the reality is very different. Instead of startups and small businesses, the biggest users of the PTAB are, in fact, Big Tech companies themselves. These Big Tech companies like the PTAB because it provides them with an additional tool to drag out infringement disputes and increase the cost of enforcing patents for smaller innovators.

As shown in the chart below, compiled from USPTO data on Docket Navigator, Big Tech companies represent the bulk of the top 20 petitioners at the PTAB, filing hundreds of petitions challenging the patents of smaller innovators since the Board was established in 2012.

How Can We Fight Back Against Big Tech’s Effort to Undermine PTAB Reforms?

Head over to the Save the Inventor Take Action page and voice your support for the bipartisan STRONGER Patents Act, which would reinforce recent PTAB reforms by putting them into law. You can use the form on our Take Action page to send a letter to your congressional representatives or tweet at them.

And please retweet our chart showing that Big Tech are the biggest users of the PTAB: https://twitter.com/SavetheInventor/status/1474047149117624320

The Patent Eligibility Crisis Threatens Investments in Breakthrough Technologies

admin — Fri, 03 Dec 2021 16:54:04 +0000

by: Chris Israel

One of the most pressing issues hindering innovation in the United States is the uncertainty surrounding patent eligibility jurisprudence. Since 2005, the Supreme Court has issued four unprecedented rulings related to Section 101, the section of the Patent Act addressing determinations of what is and what is not eligible to be patented. In these rulings, the high court collectively demonstrated its willingness to substitute its own judgment for the statutory language adopted by Congress and thereby significantly expand the types of inventions that no longer are deemed “patent eligible.” These rulings ignore the actual language of the statute, replacing it with a “judicial exception” that allows the Court to impose its own views as to what is eligible for protection. Section 101 is simple and clear:

“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

The Supreme Court has long held that products of nature, laws of nature and abstract algorithms, formulas and equations are not eligible for patent protection. No one can quarrel seriously with that list, because none of those phenomena fall into one of the four statutory categories. It is more convenient, however, for the Court to refer to the non-statutory nature of the list as “judicially created exceptions” to the law as written by Congress, because this characterization provides greater license for the Supreme Court to rewrite the law unconstrained by the patent statute.

Taken as a whole, the Court’s rulings and their implementation by the lower courts have made it vastly easier for infringers to invalidate patents or – barring that – simply to ignore the patents without consequence. This, in turn, has diminished the level of entrepreneurship and investor appetite for starting new companies and pursing new technologies in industries that are dominated by large, well-funded incumbents, such as those that dominate digital technologies.

Fortunately, several key senators are paying attention to this issue and working to advance a legislative fix. Earlier this year, Senate Judiciary IP Subcommittee Ranking Member Tillis (R-NC) and several of the IP subpanel members – Hirono, (D-HI), Cotton (R-AR), and Coons (D-DE) – asked the USPTO to collect comments on the state of patent eligibility jurisprudence in the United States and prepare a detailed summary of its findings. According to the letter, the study will help the senators consider “what legislative action should be taken to reform our eligibility laws.”

The Alliance for U.S. Startups and Inventors for Jobs (USIJ) – an association of inventors, startups, venture capital investors, entrepreneurs, and supporters – submitted comments to USPTO detailing how the uncertainty surrounding patent eligibility is hindering investment in critical breakthrough technologies. The comments note that several investors who form part of the USIJ community report having decided not to invest in certain areas of technology, such as diagnostic procedures, as a result of the manner in which the Mayo decision, one of the four key Supreme Court decisions related to Section 101, is being applied by the Federal Circuit.

USIJ members are hopeful that this study will demonstrate the dire need for legislative reform to Section 101, a crucial step in renewing this country’s commitment to the startups, entrepreneurs, and inventors who have played such an important role in ensuring U.S. dominance of critical technologies. By providing clarity on this matter in statute, Congress can help ensure that America’s unique ability to translate scientific learning into new products and services is fully harnessed.

Chris Israel is Executive Director of the Alliance for U.S. Startups and Inventors for Jobs (USIJ) and a Senior Partner at ACG. He previously served as Deputy Chief of Staff to the Secretary of Commerce and as the first U.S. International Intellectual Property Enforcement Coordinator.

Leahy-Cornyn Bill Would Allow Gaming of PTAB by Big Tech

admin — Sat, 02 Oct 2021 00:59:46 +0000

As the fight continues to protect inventors against the deep-pocketed threat of Big Tech and those who seek to engage in predatory infringement, Senators Patrick Leahy (D-VT) and John Cornyn (R-TX) introduced a piece of legislation recently that would weaken critical IP protections the USPTO had enacted to the post-grant system at the PTAB during the previous administration.

On September 29th, Innovation Alliance Executive Director, Brian Pomper, issued a statement laying out the issues his organization sees with the Restoring the America Invents Act. In the statement, he explains:

“In recent years, USPTO updated the post-grant system at the PTAB in a variety of ways to make it a fairer and more balanced system, and one that we believe more accurately reflects congressional intent in the America Invents Act. Those updates reinforced that PTAB trials should be a cost-effective alternative to district court litigation, not an additional avenue for challenging patents. Before those updates were adopted, more than 85% of PTAB reviews were filed in parallel to district court litigation, forcing inventors to defend their patents in simultaneous and duplicative proceedings. The bill introduced today would eliminate many of those updates and reestablish PTAB trials as a parallel avenue, as opposed to an alternative to district court trials.”

Clearly, this stacks the deck against smaller inventors and innovators. Pomper continues:

“That would place an often insurmountable burden on smaller companies and inventors who don’t have the resources to continue fighting to enforce their rights.”

While Pomper and the Innovation Alliance look forward to working with the Senators on improving this legislation, those who believe that strong patents and IP rights are critical to innovation and economic growth in the United States should not hesitate to make their voice heard. Take action on our website here.

The Injunction Function: Why It Matters to Secure Patents as Property Rights

admin — Tue, 04 May 2021 20:16:45 +0000

by: Adam Mossoff

Today, patent policy often seems mired in complex legal debates. For instance, the Patent Trial and Appeal Board (created in the America Invents Act of 2011) has led to five Supreme Court cases raising intricate questions and complex disputes in administrative law, the interpretation of statutes, and constitutional law. Longstanding issues in patent law, such as what makes a patented invention nonobvious or how to construe patent claims, seem quaint by comparison.

But these basic legal issues still matter, especially for the inventors, startups, and other companies working in the innovation industries that create and market the technologies that make modern life a veritable miracle by any historical standard. One such pressing legal issue is whether patents owners should receive injunctions to stop ongoing or willful infringement of their property rights. No one doubts that property owners should be secured against a trespasser who deliberately invades a farmer’s field or against a trespasser who repeatedly cuts down a landowner’s trees without permission to sell the lumber. Injunctions in these cases issue presumptively against the wrongdoers. Should owners of patents—property rights in inventions—receive the same protections against violations of their rights?

The Loss of the Key Legal Remedy for Patent Infringement

Until recently, courts answered this question with a resounding yes (as I explained in a recent article). This began to change after the Supreme Court’s 2006 decision in eBay v. MercExchange, in which the Supreme Court created a four-factor test for determining when injunctions should issue as a remedy for ongoing or willful infringement of a valid patent. In the ensuing years, the rates at which injunctions have issued to stop willful or ongoing patent infringement have dropped dramatically.

The reason is that judges and officials became swept up in the “patent troll” narrative and mislead by junk science statistical studies about patent litigation by licensing companies. This policy rhetoric was pushed in the patent policy debates by Big Tech companies, activists, and lawyers. Confused by policy narratives loudly complaining about a “broken patent system” and “abusive patent litigation,” judges departed from historical norms in which patent owners could rely on effective legal security in their property rights in creating and commercializing new innovations. An empirical study from several years ago confirmed a statistically significant decline in issuance of injunctions, and not just for licensing companies. Manufacturers have also felt the sting of increased denials of injunctions for violations of their patent rights.

Why Injunctions Matter for the Innovation Economy

The negative economic impact of this legal development in the loss of injunctive remedies for patent infringement is clear. It is as predictable as if homeowners could no longer evict squatters or could not prevent continuing trespassers or encroachers on their land. If landowners could not protect their rights in these cases, their willingness and ability to develop their property, as well as their ability to sell their property in the marketplace, would be massively undermined. These interferences with their rights—permitted by the courts that are specifically charged with stopping them—would be discounted in any investment or purchase decision.

The same has occurred for inventors and companies working in the U.S. innovation economy. Predatory infringement by large companies with the financial and legal resources to make patent piracy profitable has become commonplace. Patents as an asset class have been devalued; venture capitalists and business partners working in the value chain are less willing to make investments in or pay licenses for uncertain and unenforceable property rights. Studies show that investments are shifting from patent-intensive sectors of the innovation economy, such as in medical devices and in enterprise software, to non-IP-intensive industries, like hotels and restaurants.

Reliable and Effective Patents are a Launching Pad for the U.S. Innovation Economy

As I explained in a recently published article, courts historically secured reliable and effective property rights in innovation. By the end of the 19th century, the U.S. patent system became the “gold standard” throughout the world. Patents spurred the explosive growth in the U.S. economy from the Industrial Revolution in the 19th century to the digital revolution in the 20th century to today’s biotech and mobile revolutions.

The reason is simple: patents secure the fruits of productive labors of the innovators who create the new products and services that drive economic growth, create jobs, and ultimately contribute to a flourishing society. This is what property rights do for everyone—from innovators to farmers. Supreme Court Justice Levi Woodbury succinctly stated this point in a patent case in 1845: “we protect intellectual property, the labors of the mind … as much a man’s own, and as much the fruit of his honest industry, as the wheat he cultivates, or the flocks he rears.”

Justice Woodbury’s comparison of patents to farms was not rhetorical flourish. No farmer would invest a year of one’s life tilling the soil, planting seeds, protecting the crops from the ravages of insects, animals, and weeds, harvesting the crops, and ultimately converting crops into food, such as seed or bread, if the law did not secure exclusively to this farmer the fruits of his productive labors. The same is true for innovators, who spend as much or more time and effort to create the valuable devices and processes necessary for all people to produce and create themselves, including farmers, such as Cyrus McCormick’s patented invention of the mechanized reaper.

This is why U.S. law secures a domain of liberty from interference from others so that people are free to create, use, and trade the products of their labors—the exclusive right we call property.

The Founders who created the Constitution recognized that patents are indeed property, as did the majority of judges, congresspersons, and prominent American legal scholars who implemented the system they created (as detailed here). The Constitution authorizes Congress to enact patent laws to “secure” the “exclusive right” of inventors to their discoveries. James Madison wrote in the Federalist No. 43, in justifying this constitutional power to protect both patents and copyrights, that “The public good fully coincides in both cases with the claims of individuals,” a point the Founders repeatedly recognized about all property rights.

Reliable and effective property rights are a key factor in creating growing innovation economies and flourishing societies. This exclusive protection makes possible the contracts and other commercial dealings that comprise the free market. Historians, political scientists, economists, and other scholars have overwhelmingly recognized that this key economic insight applies as much to property rights in inventions as it does to other goods and services. This is what is at stake in the seemingly esoteric legal debate over whether patent owners should be secured by injunctions against willful and ongoing violations of their property rights.

Adam Mossoff is a patent law expert who teaches at George Mason University, he is a Board Member at the Center for Intellectual Property Understanding, and he is a Senior Fellow at the Hudson Institute.

National Security Commission on AI Report Highlights Need for Strengthening U.S. Patent System

admin — Wed, 24 Mar 2021 13:44:19 +0000

The National Security Commission on Artificial Intelligence (NSCAI) – a congressionally mandated, bipartisan committee, comprised of technologists, academic leaders, business executives and national security professionals – was created in 2018 “to consider the methods and means necessary to advance the development of artificial intelligence, machine learning, and associated technologies to comprehensively address the national security and defense needs of the United States.” The Commission, co-chaired by former Google CEO Eric Schmidt, submitted its final report to the President and Congress earlier this month.

Strikingly, the report finds that weaknesses in the U.S. patent system, particularly around issues of what is eligible for patenting, are undermining U.S. leadership in AI and other technologies critical to our national security. It states:

“The United States lacks the comprehensive IP policies it needs for the AI era and is hindered by legal uncertainties in current U.S. patent eligibility and patentability doctrine. The U.S. government needs a plan to reform IP policies and regimes in ways that are designed to further national security priorities.”

The report further concludes that China, our strongest competitor in the AI space, is effectively using patents and IP policy to catch up with the U.S. in the development of AI and other critical technologies. It states:

“China is both leveraging and exploiting intellectual property (IP) policies as a critical tool within its national strategies for emerging technologies… The United States has failed to similarly recognize the importance of IP in securing its own national security, economic interests, and technology competitiveness…”

“China is poised to ‘fill the void’ left by weakened U.S. IP protections, particularly for patents, as the U.S. has lost its comparative advantage in securing stable and effective property rights in new technological innovation.”

It is made clear in the report that without substantive IP reform and the strengthening of U.S. patent rights, the U.S. will lose its technological leadership position within a few short years.

We urge Congress to pay close attention to the warnings provided in the NSCAI report and undertake the critical changes needed in patent policy to keep America secure and globally competitive.

To learn more about the need for strong U.S. patent rights, visit SavetheInventor.com.

Predatory Infringement: Another Market Abuse by Big Tech

admin — Tue, 19 Jan 2021 01:19:21 +0000

While much of the recent antitrust scrutiny of Big Tech companies has focused on their abuse of market dominant positions in areas of pricing, search, advertising and publishing, there is another important area where these companies have been abusing their positions to squash competition: patents.

For years now, Big Tech companies have successfully advocated for and taken advantage of weakened patent protections in the United States to infringe on the patents of smaller inventors with impunity. These large corporations now often find it is cheaper to steal the ideas of a smaller inventor and fight off any legal challenge in court than it is to pay a fair licensing fee for the use of an invention. They know they can use their wealth, legal resources and weakened patent laws to drag out legal proceedings until small inventors give up or go under. This practice is known as “efficient infringement” or “predatory infringement,” though a more accurate term is “theft.”

Not only does “predatory infringement” result in lost revenue for small inventors, it also undermines our entire innovation economy. If smaller inventors know how hard it is to enforce their patents against Big Tech companies, who are willing to use every legal tool to delay and increase the costs of enforcement for inventions they are knowingly stealing, those inventors won’t take the risk of devoting their time and resources to innovation, and investors will no longer fund them. The result will be less innovation, less competition and less economic growth and job creation in the United States.

The case of Google and Sonos is a recent example of predatory infringement by a Big Tech company:

Google’s Infringement of Sonos

Sonos is a California-based developer and manufacturer of wireless home audio products, including smart speakers. In 2013, Sonos worked with Google to allow Google’s music service to work with Sonos’s home speakers. For the project, Sonos gave Google engineers detailed diagrams on how its speakers interacted wirelessly with one another. At the time, Google was not a competitor in the home speaker industry.

A few years later, however, Google began selling wireless home speaker products that were similar to what Sonos was offering, but at lower prices. Sonos bought the Google devices and conducted analyses that determined that Google was using Sonos’s patented device communication technology, including synchronizing audio across groups of speakers, adjusting the group volume, and setting up devices on a local wireless network. In August 2016, Sonos told Google that it was infringing.

Google largely ignored Sonos and even released more products that violated more of Sonos’s patents over the following years. Sonos eventually identified 100 patents it believed Google had violated. Sonos proposed a model for Google to pay licensing fees for its technology, but Google declined, instead offering a model in which it would pay almost nothing.

After suffering years of having its technology stolen and losing revenue to Google’s competing products, in January 2020, Sonos finally sued Google for infringement of five of its patents and filed a separate case with the International Trade Commission calling for a ban on the import of certain infringing Google products.

In a statement on the case, Sonos CEO Patrick Spence said: “Google has been blatantly and knowingly copying our patented technology. Despite our repeated and extensive efforts over the last few years, Google has not shown any willingness to work with us on a mutually beneficial solution. We’re left with no choice but to litigate.”

In testimony before a House Judiciary Antitrust Subcommittee hearing, Spence further remarked: “These dominant companies disregard inventor's patents because they are so powerful and they are doing the cost-benefit analysis of infringing now and paying later once they have achieved dominance and moved past the point where they have to worry about competition in that market. They are exploiting today's system of enforcement to extend their dominance from one market to the next.”

Rob Strayer, Deputy Assistant Secretary of State for Cyber and International Communications Policy, Explains What International IP Espionage Looks Like

Anonymous — Fri, 26 Jun 2020 16:18:13 +0000

Rob Strayer is the Deputy Assistant Secretary of State for Cyber and International Communications Policy. His duties include development of policy as it pertains to international cybersecurity, as well as leading dialogue on related subjects with foreign governments. Prior to his current position, Mr. Strayer was general counsel for the U.S. Senate Foreign Relations Committee. Read his bio here.

What International IP Espionage Looks Like

“So, we're seeing threats from a couple different angles. First, we're seeing some standards bodies being altered in the way that countries are approaching it. They're seeking not to have the best technology or the best solutions win, but in some cases they're seeking to influence the process and politicize it unnecessarily so that we'll see a thumb on the scale toward a certain outcome that may not be the best technology. In addition, in some cases we're seeing countries approach fields in subsidizing companies or otherwise altering the playing field in ways that will not ensure that the best competitors win. For example, in China we've seen a set of unfair practices including the theft of intellectual property and trade secrets. Sometimes that's been enabled through cyber means—that is the Ministry of State Security being involved in intellectual property theft.

“The United States along with 13 other countries in December of 2018 said that China had been involved in massive theft of intellectual property from many countries.”

The United States along with 13 other countries in December of 2018 said that China had been involved in massive theft of intellectual property from many countries. This was known as the cloud hopper set of attacks where they steal terabytes of data, in some cases the entire databases of some companies. They then used that information to provide to their own companies. So, this form of economic espionage is very harmful to global trade and to the prosperity of companies who are following fair practices in the way they conduct their business.”

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ICYMI: Former Chief Judge Paul Michel Gives Congress Nine Reasons Why Patents Matter

Anonymous — Fri, 24 Nov 2017 13:00:08 +0000

Patents are crucial to the U.S. economy. That’s what Paul R. Michel, former chief judge of the U.S. Court of Appeals for the Federal Circuit, told members of the U.S House of Representatives’ Judiciary Committee. Both in-person and in supplemental testimony, Michel strongly urged Congress to strengthen the patent system in order to support the nation’s economy.

He wrote: “Without the proper incentives provided by the patent system, investment in innovation will falter, and the U.S. economy will suffer. The health of the American patent system is therefore of the highest national importance.”

Michel went on to list nine key benefits of improving the U.S. patent system:

Economic growth
Creation of net new jobs with competitive salaries
Productivity increases
Enhanced global competitiveness
Increased family and individual incomes
Increased tax revenues to support crucial upgrades in citizen welfare and physical infrastructure
Technological leadership
Technological developments to address environmental issues
Economic and national security

Read Judge Michel’s full supplemental testimony here.

Learn about how a weakened patent system is hurting small inventors by reading our recent blog, Why the U.S. Patent System is Losing its Luster.

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Financial Times Says Strong Patent Protections Promote Strong Economic Growth

Anonymous — Wed, 15 Nov 2017 02:49:23 +0000

Financial Times global business columnist Rana Foroohar published an insightful and well-researched column in October that highlighted the importance of strong patent protections to the U.S. economy. She wrote:
“There is little doubt that strong IP protection is linked to stronger economic growth. A recent paper from the National Bureau of Economic Research found that holding a patent (and being able to defend it) increases the probability of securing venture capital funding by 53 per cent, start-up job growth by 36 per cent and start-up sales by 51 per cent. Another paper, “Patents and the Wealth of Nations” by Stanford academic Stephen Haber, found that countries that protect patents enjoy stronger economic growth.”

Foroohar described how a large coalition of inventors, life sciences and tech companies, universities, venture capitalists and others believe patent rights have been dangerously weakened in recent years and a rebalancing of the system in favor of inventors is needed. She wrote:
“Indeed, the only ones that seem not to be complaining about the current system are a handful of the biggest Silicon Valley companies – including Google, Apple, Intel and Cisco…""But small and mid-sized software and hardware suppliers as well as life sciences companies have very different business models... For many of these companies, the shifts in the system that began a decade ago have gone too far.”

Foroohar also explained that the “patent troll” narrative that has driven the push for further patent-weakening legislation has no basis in reality, writing:
“In 2013, then president Barack Obama issued a report saying that patent lawsuits were rising, and two-thirds of all patent suits were brought by trolls. But that report was itself influenced by the Big Tech narrative on patent trolls…

“The White House report didn’t account for the fact that the America Invents Act itself artificially jacked up the number of cases by changing rules to disallow plaintiffs from suing multiple defendants in a single suit, thus necessitating that the number of suits equal the number of defendants…"

“The conclusion? Trolls have been overblown as a patent issue.”

Learn more about patent rights and the fight to keep the patent system strong by reading our blog here.

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