Breaking Bad Patents
Proposed new measures designed to kill patent trolls may destroy what few advantages the small inventor and small companies may have to enforce their rights. For example, there is a fee-shifting provision in a current bill that would shift attorney fees onto an unsuccessful troll. Although penalizing a troll sounds OK, who is the troll? Answer: anyone given the label.
10/01/13 11:12 AM PT
In AMC's Breaking Bad, high school chemistry teacher Walter White, although starting out as a protagonist, descends into depravity and ruin. Clearly, not all high school chemistry teachers are Walter Whites. Similarly, not all scientists, innovators and patent owners are evil. Yet Congress, at the urging of lobbyists, is ready to label many innovators and patentees as "patent trolls," categorically unworthy of participating in the patent process and subject to stiff penalties.
It seems that patents are always in the news. The reason is their value and the market power involved. A patent is a limited, exclusionary government grant designed to protect an inventor from infringers -- i.e., copyists and others who desire to take advantage.
Patents represent one way the little guy with an idea can succeed in today's economy. Indeed, the U.S. Founding Fathers recognized the value of a patent system to foster innovation and incorporated it in the Constitution. For more than two centuries, the U.S. patent system, like a faithful and sturdy machine, has been operating to protect American innovation and propel the country forward.
However, the patent system -- the poster child of capitalism -- can be controversial. In the 1840s, the sewing machine patent wars created controversy. Likewise, Morse's telegraph, Bell's telephone, Edison's inventions and the Wright Brothers' flying machines all generated controversy in their day, triggering a hue and cry against the patent system. Today, we have the smartphone patent wars, due entirely to the quest for market dominance -- and this controversy too will pass.
In response to cries for patent reform, Congress passed the America Invents Act of 2011, which was recently enacted. It was meant as a response to the so-called patent trolls, also termed "patent assertion entities," or PAEs. The Act includes numerous new U.S. Patent Office governmental proceedings designed to challenge patents -- e.g., oppositions and reexaminations -- on top of the existing mechanisms to challenge and invalidate patents.
Through these various proceedings, dubious patents can be overturned without the necessity of resorting to a trial. In the congressional hearings for the AIA, numerous corporations proclaimed the need for the Act. Now, the U.S. Patent Office has hired hundreds of judges to oversee these new proceedings, and patent attorneys across the country have had to tell their clients about the brand new provisions, some of which overturned more than 210 years of patent law.
Even though the ink on the AIA is hardly dry, Congress is poised to enact rather serious legislation to curb so-called patent abuse, which the AIA was designed to do. Also, the Federal Trade Commission is once again engaged in studying the patent system. What is going on? Various large corporations and their lobbyists, although instrumental in pushing the AIA through, want more -- far more than they got legislatively.
The fear, however, is that the proposed new measures, designed to kill trolls, may destroy what few advantages the small inventor and small companies may have to enforce their rights. For example, there is a fee-shifting provision in a current bill that would shift attorney fees onto an unsuccessful troll. Although penalizing a troll sounds OK, who is the troll? Answer: anyone given the label.
Better Call Saul
"Trolls," as the term is now understood, include those not practicing their invention -- e.g., someone who has no business -- only a patent. Under this definition, universities are trolls. Small inventors driven out of the market by a larger entity are trolls. Nonetheless, there are bad actors out there, and there are bad patent lawsuits. However, the AIA and its patent-challenging provisions are the mechanism that should come into play -- not new legislation.
There is also a challenge against new technologies, primarily software. To critics, all software patents are unpatentable as being too abstract even though the Supreme Court and numerous judges have elucidated guidelines to address this.
Further, software is an American specialty. Is the U.S. to allow this national resource to go unprotected, allowing everyone to copy? Just as the telegraph, the phone, electricity, flight, plastics, and other disciplines became subject to patenting -- and controversies -- software will in time join the technologies of yesterday and be supplanted by the technologies of tomorrow, which will hopefully be patentable as well. Singling out software for exclusion from patenting is both short-sighted and asinine.
The AIA is not perfect, but it is a creature of pretty much the same lobbyists who are now crying for more. The American patent system is strong, but it is not indestructible. American invention is strong, and this national resource must not be hindered.
As Google CEO Eric Schmidt recently said, "Innovation never comes from the established institutions. It's always a graduate student or a crazy person or somebody with a great vision."
If the U.S. government curtails patents enough, undermines the patent system, or otherwise disincentivizes innovators, the nation will suffer.
Demonizing inventors as greedy or evil -- equating innovators with Walter White or other bad characters -- undermines the Founding Fathers' hopes for the U.S. The AIA was an unpleasant pill that the patent system had to swallow; let's let it work before forcing more unpleasantries on inventors.
One thing is certain: Heisenberg is dead.