Archive for June, 2017

Jun
26

America’s Patent Apocalypse and the USPTO’s Patent Death Squad

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For those of us working with innovators seeking to build and grow much-needed businesses and bring new valuable new products to the world, it’s painful to survey the damage that has been done to the patent system in the United States over the past decade and the corresponding damage to innovation. Many factors have come together in a perfect storm of patent hostility, driven in part by rhetoric about dread “patent trolls” spread by Silicon Valley giants whose business models are threatened by the pesky patents of other parties but also by political hostility to pharma patents, perhaps because the unmanageable costs of Obamacare might be reduced somewhat if drug costs could be driven down by reducing the value of IP.

The hostility came in several waves. The American Invents Act created several new ways to gut patents, most particularly the Inter Partes Review (IPR), which would allow opponents and their allies to file endless actions against existing patents to wear down the owner and in nearly 90% of the cases so far, eventually eradicate key claims. There would also be a series of Supreme Court decisions such as the Alice decision that would make it easier for the USPTO to reject patents by declaring the invention to be “abstract.” What does “abstract” mean? The Supreme Court refused to define the term in their decision, giving examiners and courts a hammer they can swing any way they want. And then there would be a series of actions from the USPTO itself, headed by a former Google attorney highly sympathetic to the anti-patent sentiments of Silicon Valley, which went beyond the requirements of the law and of judicial decisions to exacerbate the hostility toward patents.

One of the most shocking aspects of the war on patents has been the discovery that the judges of the PTAB, the Patent Trials and Appeals Board the runs the IPR system, have no code of ethics beyond the basic requirements for any employee in the Dept. of Commerce. Thus, unlike judges in any other area, the judges of the PTAB can take cases from their former clients. General rules for Commerce employees requires a one-year buffer for cases with a potential conflict of interest, but for judges in the US judicial system, the distance must be much greater. In general, a judge simply should not take a case involving a former client regardless of how long ago the financial relationship ended. But with the scandalous lack of a judicial code of ethics for PTAB judges, questionable cases occur and with easily predicted results. Gene Quinn and Steve Brachman of IPWatchdog write forcefully on this scandal here and here.

The PTAB has been called the “death squad” of American patents, and some of its judges seem to relish that role.

Michelle Lee, the Google-tainted director of the USPTO, has at least been removed from that position, and many patent practitioners and patent seekers hope that the new leader will be free from heavy Silicon Valley influence and will take bold steps to curtail the damage being done to the US patent system. Meanwhile, many innovators are looking to other countries to develop their innovations, including places like China where IP is increasingly valued and supported. May the US catch up!

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