‘Patent trolls’: Reading the comments

The U.S. Patent and Trademark Office is seen in Alexandria. (Alex Brandon/Associated Press)

Each week, In Theory takes on a big idea in the news and explores it from a range of perspectives. This week focused on patent reform.

A quick recap on the arguments in our series — We had three pieces that focused on why we need a strong patent system: Joseph Allen explained how reforms could disrupt our system of innovation; John Wiley argued that patent rights need to be protected from predatory companies; and David Pyott argued that hedge funds were threatening intellectual property in the health industry. On the other side, we had two pieces advocating for proposed legislation to curb abuses in the legal system. Julie Samuels suggested that without patent reform, companies will lose their incentive to innovate. James Bessen and Michael Meurer argued that so-called “patent trolls” are costing businesses billions of dollars. Colleen Chien and Michael Risch then finished off the series, suggesting that courts could possibly solve many of the problems facing the patent system by changing were lawsuits can be filed.

This topic didn’t trend on Twitter or inspire floods of reader comments. But the number of professionals who were interested in contributing to the series and offering their own thoughts was astounding.

If anything, this tells us that patent reform is one of those issues that the general public is not entirely aware of (or perhaps even interested in), but it is extraordinarily important to the people working in the intellectual property space.

We were not able to publish full articles from everyone who wanted to be included, but here are a few of the reactions we heard throughout the week.

From Gary Shapiro, president and chief executive of the Consumer Technology Association:

Our patent system is broken – it legalizes extortion from thousands of small businesses and startups.

Patent trolls buy ambiguous but unused patents. They produce nothing of value for consumers or academia. They fund themselves by extorting job-creating businesses.

From 2005 to 2014, patent lawsuits jumped 500 percent. Each year, trolls drain an estimated $80 billion from the U.S. economy. That’s $1.5 billion every week that troll victims – 80 percent of whom are small and medium-sized businesses – could invest in R&D or hiring.

Universities are innovators, and often partner with private companies to commercialize their research. But we must not let racketeers and extortionists hide behind ivory towers. Frivolous lawsuits hurt us no matter who initiates them.

Legislation before Congress – the PATENT Act in the Senate and the Innovation Act in the House – would protect legitimate business owners and startups by making patents more transparent and instituting a “loser-pays” provision that would remove the incentive to file baseless claims. Critically – nothing in these bills would prevent universities from asserting legitimate patents. It’s time for Congress to slay the trolls and implement reforms to unleash innovation, promote job creation and boost the economy.

From Angela Macfarlane, chief executive of ForSight VISION4, Inc.:

As the CEO of a medical technology company that is working to improve the lives of millions of Americans living with macular degeneration and other sight threatening diseases, I know that our innovations and those of countless other startups across the country are driven by strong intellectual property protections and the venture capital those protections allow us to raise.

Unfortunately, there are some large, established companies looking to weaken patent protections in order to strengthen their own positions in the marketplace and weaken smaller competitors that might challenge them.

What we all too frequently see in Silicon Valley is a process known as “efficient infringement,” in which large companies that have already established a huge market presence copy the intellectual property of smaller companies, knowing they will face little penalty if caught. When requested to take a license or legally challenged, they deploy a range of expensive and time-consuming legal and procedural tactics in the courts or at the U.S. Patent and Trademark Office, expecting that the inventor or startup will likely be forced to give up or go out of business.

The current bills being considered by Congress, the Innovation Act in the House and the PATENT Act in the Senate, would effectively institutionalize the practice of efficient infringement. These bills tout a noble purpose, but their impact would be devastating to startups and entrepreneurs. Under the guise of pursuing so-called “patent trolls,” the bills employ overly broad language that goes well beyond what is needed to address true litigation abuse. Instead, their impact would be to make it much harder for all inventors to defend their innovations in court and confront actual infringement.

From David J. Kappos, former USPTO commissioner, and Paul R. Michel, former chief judge for the U.S. Court of Appeals for the Federal Circuit:

On December 1, new procedural rules adopted by the Judicial Conference of the United States, the national policymaking body of the federal courts, go into effect. These new rules will heighten pleading standards and resolve one of the key issues raised in pending patent legislation.

Addressing vague pleading standards has been one of the priorities in pending patent reform bills before the Congress. The most prominent of these bills would significantly restrict judicial flexibility, dictating how judges must manage pleadings in patent cases brought before them. These rigid legislative proposals have met with concerns voiced by judges, scholars, and innovators over inflexible rules that would deprive judges of the ability to exercise judgment, and would amount to Congress micromanaging the judiciary in tension with our Constitutional separation of powers.

As controversy around new patent reform legislation has grown on Capitol Hill, the judiciary did something it does well: quietly and deliberatively working through its procedures to put its own house in order.  It has accomplished that reordering—issuing a major rule change that solves the patent pleading problem the right way—for all stakeholders. After December 1, this issue can be considered resolved.

Adam Mossoff, a law professor at George Mason University and co-founder of the Center for the Protection of Intellectual Property, also wrote a piece for IPWatchdog in response to Bessen and Meurer’s “A third of the economy is at stake — and patent trolls are to blame.” In it, Mossoff takes issue with the data they present. Here’s an interesting excerpt:

Yes, as they say, patent litigation imposes costs. However, this is true of every law—from traffic rules to contract laws to real property rights. As other scholars have cautioned, one should not draw policy conclusions from the costs of patent enforcement without considering either the costs of infringement or the benefits of enforcement.

Over the last week, In Theory had people on both sides — those in favor of reform and those against — suggest that the series wasn’t balanced. That’s not surprising, considering many of these people are lawyers.

But as we noted in our primer, patents are extremely important to the economy (they support about a third of it). No matter where you fall on the debate, an open discussion is essential.

Thanks, as always, for reading, commenting and sharing. Send us your thoughts on patent reform (or any other topic) on Twitter or via e-mail — let’s continue the conversation!