The patent troll narrative has dominated our cultural consciousness ever since a clever Intel lawyer coined the term in the early 2000s. Even if you know nothing about patents, you’re probably familiar with the concept. Companies with no intention of producing anything buy up overly broad patents to extort other businesses with. Do you remember when the podcast This American Life devoted not one but two episodes to the subject? I do.
It was so persuasive that legislation — the Leahy-Smith America Invents Act (AIA)— was passed in 2011 to address it. Congressman Thomas Massie (R-KY), an award-winning inventor and successful entrepreneur, began his term the year after Congress passed the AIA.
He perceived the legislation would be damaging, he told me in a phone interview earlier this month, and he was right. It has been. (Read some of the reasons why I believe independent inventors are in danger.)
As an undergraduate at MIT, Massie invented a haptic computer interface in 1993— enabling users to “feel” virtual objects. His thesis advisor encouraged him to reach out to the technology transfer office on campus. With the university’s help, he obtained patent protection. Without it, he is certain he wouldn’t have been able to raise the funds he needed to commercialize the initial prototype.
It took three to four years and $9 million dollars to create a version for consumers.
Thirty patents stem from his initial invention and improvements. Now owned by 3D Systems, his technology is still in use today.
On June 28th of this year, he introduced the Restoring American Leadership in Innovation Act of 2018 into the House of Representatives (H.R. 6264). It is co-sponsored by Congresswoman Marcy Kaptur (D-OH) and Congressman Dana Rohrabacher (R-CA). Its goal is to roll back some of the “worst parts” of the AIA, Massie said.
Others have been sounding the alarm about the adverse effects of the AIA for some time now. They include the Innovation Alliance — a group of research and development-based technology companies from a range of industries, including Qualcomm; patent experts writing on IPWatchdog.com and for the Center for the Protection of Intellectual Property; innovation policy advocates at Inventor’s Project; and activists from US Inventor, a not-for-profit.
To Massie, the relationship between strong patent rights and the incentive to innovate could not be clearer.
“Ideas never get developed if no one can recoup investment from them,” he explained. If ideas were made free and anyone could develop them, he thinks there would be less development of ideas — not more.
Notably, H.R. 6264 abolishes the Patent Trial and Appeal Board (PTAB), the body established by the AIA to review new kinds of patent challenges.
One very successful inventor I know has been tied up in the PTAB system ever since an infringer challenged his utility patent. It’s been years now. Before the AIA, he earned sizable royalties from a licensing agreement for 10 years uneventfully. Originally issued 13 claims, after battling seemingly endless rounds of appeals, he’s down to one. Meanwhile, while his patent remains under re-examination, infringers have flooded the market and sales of his invention have been cut in half.
Massie’s bill explicitly restores patents as a property right, which would reverse a recent Supreme Court decision. As he put it, “Who is going to build a building on a piece of property when someone could say two years later, ‘We reviewed your deed, and you don’t own this property.’”
In its attempt to police malevolent actors and rid the system of overly broad patents, did Congress tip the scales too far against independent inventors and small business owners? Maybe.
“It’s an economic decision, whether to steal or license. Which is cheaper?” Massie explained. There’s even a phrase for it: Efficient infringement. In 2015, Joe Nocera described it as follows in his New York Times op-ed “The Patent Troll Smokescreen.”
That’s the relatively new practice of using a technology that infringes on someone’s patent, while ignoring the patent holder entirely. And when the patent holder discovers the infringement and seeks recompense, the infringer responds by challenging the patent’s validity.
Not everyone agrees, of course. For some, the patent troll issue reigns supreme. There really are far too many bad patents, that perspective contends — which is why processes like inter partes review (IPR) are necessary and good. Filing an IPR is cheaper than going to court.
Andrea Evans, an IP attorney who spent five years examining patents and trademarks at the USPTO, sees that as a potential benefit. She recently celebrated her firm’s 11th anniversary.
“I do think the Patent Trial and Appeal Board is necessary, because I like the idea of having a resource for people who cannot afford to go to federal court. It’s a faster process and less expensive,” Evans noted, adding that it must be policed properly.
Evans hosted the first day of a conference of inventor group leaders from across the country put on by Inventors Groups of America, an organization I co-founded last summer. It took place at the United States Patent and Trademark Office with the help of the United Inventors Association. We were all cheered when Andrei Iancu, the new director of the USPTO, stopped by unannounced to deliver a supportive message.
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