IP Watch reports that Russia has, by Presidential decree, extensively modernized its IP laws, including patent law:
The anti-patent lobby (basically big business invention thieves who want small business patents to disappear) is WINNING.
1. ASIA Act of 2011 (America Stops Inventing Act, or in 1984 type doublespeak officially called America Invents Act or AIA) – I prefer to call it ASIA since that is where the jobs it creates will go and since it really is the America STOPS Inventing Act for reasons I have previously posted. Anyway, the ASIA took a patent system heavily biased in favor of big business and distorted it much more in favor of invention thieves, big business, idiots, and patent challengers. The ASIA act was also riddled with special interest giveaways to particular fat cats such as a $214M malpractice bailout for a well connected law firm and a special infringement defense for Wall Street bankers.
2. Alice v CLS. A 2014 Supreme Court decision (or misdecision) that turned an obviousness defense into an ineligble-subject-matter defense and American software patents collectively lost billions of dollars in value. We would have previously thought that “take a known process and do it with a computer” would be patentable subject matter but ineligible for protection due to being obvious. Using a two-step analysis (First, is the basic idea, the basic method, known for non-computer use? And, second is there sufficient hardware or transformation present to make it more than just simple computerization? [i.e. is the application to computers obvious] If yes to both, the “invention” is not an invention but rather “ineligible subject matter”.) Since Alice v CLS, courts are holding invalide virtually every software patent in which the defense asserts this new Alice v CLS test. That is, software patents have been rendered likely invalid and essentially worthless by the Supreme Court.
3. Fee shifting. In order to clumsily try to stop patent trolls from making bogus claims of patent infringement, the Supreme Court has in its Highmark and Octane Fitness decisions, basically dictated that a one-way fee shift should be imposed. If you assert a patent and lose you must now expect to pay the fees of the alleged infringer. If you assert a patent and win, you don’t generally collect your legal fees unless the case is really exceptional.
4. Expensive delaying challenges added to the system. Challenges drive up cost prohibitively. To get rid of BAD patents (i.e. ones you don’t own and want to infringe), new very expensive challenge procedures have been added. An infringer can basically bankupt any small entity patent owner. This allows big business, which can afford to defend against such challenges, to assert patents while small business cannot afford to assert patents.
5. First to File. In order to “harmonize” the US Patent System with the inferior patent systems of other nations, the AIA unilaterally gave up a “first to invent” system that our founding fathers had established in 1790 and which served the nation well for 226 years. James Madison wrote the patent clause (Art. 1, Section 8, Clause 8 of the US Constitution) to change King George’s policy of giving patents not to inventors but to courtiers and favorites. They felt the reward should go to creators for their labors not to fat cats as a reward for being rich. That is, patents were intended to favor the small inventor against fat cats that would steal, with the King’s assistance, the results of their inventive effort. Fast forward two centuries and the US now has its own fat cats, we know them as the 1%. Big business, which understands the rules and how to use them to advantage, got the best Congress money can buy to change the rules. Big business is now able to better steal inventions from small inventors by filing fast and lobbying Congress to pass a law that the first to file is the legal first inventor regardless of who was actually the first to invent. This further favors big business by causing small inventor patent disclosures to be rushed out half-baked in sloppy form so they are easier to challenge, those challenges being expensive things where big business has an overwhelming advantage. A terrible change unless you are a big business (in which case it is a wonderful change.) The director of SIPO (Chinese patent office) said “thank you” for this gift to the Chinese economy.
5. Patent litigation costs skyrocketing. They were already outrageously high. Congress, at the urging of big business, has made them even higher. If you are a small business, any big business can probably use your invention with impunity unless the damages to you are over $10,000,000, which is about the threshold for a contingent fee patent litigator to take the case. Fee shifting has greatly reduced the incentive, however, for a contingent fee litigator to take anything but a slam dunk case. Hence, in part, the 40% drop in litigation. Unfair to small business was not enough. This enforcement cost makes the system EXTREMELY unfair.
The BOTTOM LINE is that patents are now strictly a rich man’s game, a means for the rich to oppress the poor. The US Patent system was for 226 years the engine that drove the US economy to world domination by leveling the playing field and rewarding true inventors. Now it’s just another means to stomp out the main source of new jobs in our economy. It does what James Madison designed it to prevent.
The new WIPO team appointed by Director General Mr. Francis Gurry has several new and several existing members. The US representative John Sandage is in charge of Patents & Technology and replaces a prior US representative in the same capacity and is a UN Drug treaty officer appearing to have little expertise in patents. The Chinese representative (Wang Bingying – former Dir. of Chinese TM Office) continues to manage Trademark matters.
In a development I think is good for patent law, patent litigation is rapidly moving toward the English system where loser pays the fees of the winner. However, the current trend is just for patent plaintiffs to get hit for legal fees where the suit is deemed frivolous. These awards are very much on the rise lately as Courts take control over the situation. I am pleased that the Courts and not Congress has taken this to heart, as that gives Courts much more flexibility to address the problem of abusive patent litigation while hopefully not undermining legitimate patent plaintiffs from asserting valid patents against invention thieves. This stems from the Supreme Court in the Octane Fitness decision throwing out the “exceptional case” standards previously imposed by the Federal Circuit Ct. of Appeals and in Highmark v Allcare requiring increased deference by the Federal Circuit to District Ct fee shifting awards. See an article by the EFF on this topic. Here are two cases of recent note:
This is concurrent with the Supreme Court decision in Alice v CLS Bank that created a judicially legislated “abstract idea” test on patentability to make it much more difficult to obtain or enforce computer-related patents. That is both welcome and dangerous. Far too many patents have the invention “do this known thing, except do it with a computer”. But, now the pendulum has swung the other way. We have yet to find a recent decision where the District Court has sustained a computer software patent in the face of an abstract idea challenge. It is ever so tempting for U.S. District Court judges to get rid of a tediously complex patent infringement case by just saying “invalid as being an abstract idea” so the Judge can move on to some type of more familiar case.
The Supreme Court, seeing the glut of proposed legislation to stop “abusive patent litigation”, took the matter over, I think, in large part to get Congress out of its meddling ways. It should rightfully be the Courts and not Congress that set the rules for fee shifting.
It is a dark time for inventors. And, a dark time for American inventors is, sadly, a dark time for America. The lure of the incentive of patents was one of the driving forces for Thomas Edison in bringing America out of the dark of the gaslight age and into the light of the electric light bulb.
In our litigious society, we might gain by switching to the English fee system where the loser pays the fees of the winner. I just hope the courts see fit to impose fee shifting in both directions and not just use it to punish patent plaintiffs while exempting patent defendants. Patent fee shifting is perhaps best used to prevent abuse of the poor by the rich, so when Google gets $1.3M in fee shifting against a small patent plaintiff that sends the wrong message, a chilling one that says every small patentee better not assert a patent unless it is a slam dunk case for infringement.
Patently-O has reported a favorable Australian patent decision upholding subject matter patentability for the Myriad patents and has criticized the US Supreme Court for it’s anti-patent bias as regards products that are clearly the result of human ingenuity, i.e. invention.
Consider this interesting case from the UK where a copyright pirate was sentenced to 33 months in jail for downloading Fast & Furious 6 from the back of a moviehouse and then posting it where it was downloaded 700,000 times.
The INTA (International Trademark Association) reports a recent decision holding that AQUA ADMIRABILIS perfumes are likely to be confused as to source with AQUA MIRABILIS perfumes and thus denied registration of the later in this article
Over the course of more than four years, the U.S. Patent and Trademark Office knowingly wasted and misused more than $5 million in taxpayer dollars by paying salaries to paralegals who had so little work to do, they used the time to watch television, do laundry, surf the Internet, go on Facebook, shop online and exercise, an investigation by the Office of the Inspector General of the U.S. Department of Commerce has revealed.
In a related story, the USPTO touts its rating as best place to work in the US Government.
Embarrassing and pathetic.
In a speech to Stanford Law School entitled “Speaking Truth to Patents”, Michelle Lee gives a great talk on what her approach will be, “pro patent system”.
“Now, I wouldn’t call myself “anti-patent,” nor would I call myself “pro-patent,” whatever those labels mean. But let me be clear: I am, without reservation, “pro-patent system.” What do I mean by “pro-patent system”? It means that I believe that a strong patent system is essential to fostering the innovation that drives our economy.” Sounds good rolling off the tongue, but what to her is “a strong patent system”?
It appears that to Director Lee, a “strong patent system” includes fewer patents, more expensive patent prosecution, more challenges to patents, more risk to patent plaintiffs, and all that translates to a further slant in favor of big business. For example, she speaks favorably of ‘higher standards for claim clarity”, which is very pro big business (small inventors have trouble with drafting claims, big businesses have patent attorney highly trained in drafting claims). If there is a desire for more clarity in claims, shouldn’t we force patent examiners to write the claims? I have been an advocate of that for 30 years, but not big business as that would level the playing field and big business naturally wants the system slanted pro business. Perhaps there is room to urge Ms. Lee to back up her rhetoric with support for having patent examiners write the allowable claims. That would also enormously simplify patent prosecution and bring certainty to the system and thus lower costs, and would also save time. The current mode of expecting an independent inventor to write a decent patent claim is unrealistic, and the courts treat such sloppy unclear claims with great disrespect and with great uncertainty that undermines the purpose of patent claims, which is to lend certainty to the system by providing notice of what’s covered and what’s not covered.
She is, as predicted, very focused on so-called “abusive patent litigation” but does not provide any useful detail about what is abusive and what is not abusive, and just speaks generalities “abusive litigation is a flaw in an otherwise great system” she says, “If we care about the system, we have to bring our expertise and experiences to bear on how we can address this problem before it threatens to undo so much of what we’ve all worked so hard to build together. ” She appears to be looking for answers rather than providing solutions. Hopefully, with time, that will change.
The patent system as currently structured is so heavily slanted against small inventors and in favor of big business as to be just what Thomas Jefferson feared, a rich man’s tool used by the politically well connected to control the economy to obtain unnatural benefits. James Madison tried to structure a simple patent system that leveled the playing field between rich and poor and rewarded the first and true inventor, not the richest or most politically connected. That is patents are increasingly FTF (For The Fatcats). Keeping with the acronym, we now have FTF (First To File – where big businesses with big patent staffs routinely win the race to the PTO and squeeze out little guys) and FTF (Fast Track for Fatcats – pay for priority so the rich can get their patents fast and little guys get bypassed and wait even longer) and FTF (Fudge The Figures – the PTO reports in new self-serving skewed ways how the system is supposedly improving), FTF (Forfeit the Fees – continued fee diversion despite promises it is stopped to tax small inventors and keep them out of the system) and FTF (Farmout To Foreigners – where we send examination work to Russians, Koreans, and Europeans rather than do it here – just think we send our best new technology to the Russians and even pay them to examine it!), FTF (Fortunes to Fight – patent enforcement litigation routinely costs over a million dollars, often much more) and it all sums up likely to FTF (Forfeit The Future). The system is out of whack and needs a major correction to where small inventors have an equal chance.
So what will her pronounced focus be: ending “abusive patent litigation”, further implementation of the AIA (America Invents Act of 2011 or as I call it the America Stops Inventing Act or “ASIA” since that is where all the new jobs it “creates” will be going), the bloatation of the USPTO with new satellite offices and more bureaucrats, and perpetuating the current system, but she also strikes a promising tone in saying “we must acknowledge that the patent system doesn’t belong to a narrow set of patent stakeholders, but to all of us. Currently “all of us” seems to not include small and micro inventors”. Hopefully, that can change, but much of the change needed is not at the USPTO at all, but legislatively and in the courts to make it feasible for small inventors to obtain and enforce patents to get back to the original goal of making patents a reward based on natural rights rather than richness, to make patents more of a reward for invention and less a reward for being rich and hiring a rich lawyer to keep you rich.