Goodlatte's Innovation Act of 2013 proposes to change things. The Act limits legal estoppel to issues actually raised in post-grant proceedings and increases transparency on patent ownership, which should help, but also proposes to radically change decades of US patent law by introducing fee shifting perhaps in many if not all cases. This is more than "modernizing" 35 USC 285 folks this is giving up the American rule. We have this rule to encourage small entities to be able to protect their rights against large interests. If passed, large company defendants will have an incentive to overspend on legal fees, resulting in a win (how could they not win if they spent an order of magnitude more?), then hand the losing patent owner a very large legal bill. We are talking millions in legal fees. This will soon deter a small entity from enforcing a patent against any large company that decides infringement makes sense. The Act also heightens an infringement complaint to essentially require the patent owner submit a claim chart showing infringement with the complaint, and do it all before any discovery! Is this how we want it to work, establish infringement without discovery? Such a provision should be carefully considered by the patent community, because it only benefits large companies.
Beside carefully considering the impact of the laws, we need to drop the pejorative labels. Many acknowledge we shouldn't use the term "patent troll." Instead, we should refer to "patent assertion entities," but months later it is back to calling non-practicing patent owners patent trolls in the press, which preconditions the debate. Consider if you were accused of bullying others. Let's assume we don't know yet if you are. What if we each time we cross paths I ask, "So Mr. Bully, what have you been doing today?"
Congress appears to be introducing patent reform based on PR, media, and lobbyists. Many arguments raised against "patent trolls" might be raised against any patent licensing. Is it evil for someone to seek to obtain income from patent licensing and/or litigating rather than provide a service or make a product? IBM, Microsoft, Texas Instruments, HP, Intel, and SanDisk have all licensed patents beyond what is in their products, but that is left out of the media barrage, because these companies make valuable products and services (even if not related to a patent) and therefore are not "patent trolls."
We must delve into the facts to understand how to reduce patent litigation abuse. The FTC recently launched an investigation into patent monetizer. Some academics have done a great job of investigating into the facts. In The AIA 500 Expanded: Effects of Patent Monetization Entities, Professor Robin Feldman investigated almost 13,000 cases and 30,000 patents in lawsuits filed in 2007-2008 and 2011-2012 and draws interesting conclusions about how patent monetizers are reacting to changes of the patent law in the America Invents Act (AIA). This fact investigation with reasonable conclusions is a step in the right direction and should continue. Some of the findings of Professor Feldman's article:
- In 2012, patent monetizers filed 58.7% of all patent lawsuits filed in the USA. In contrast, patent monetizers filed only 24.6% of US patent lawsuits.
- The recently issued US patents are most frequently litigated, which might mean people are applying for patents with the plan to file lawsuits.
- Current mechanisms to notify the public when a patent is asserted in lawsuit did not operate 2/3 of the time.
- Month-by-month data show a massive spike in monetizer activity the month prior to the joinder provisions of America Invents Act became effective then the lawsuits began to rise again in the last part of 2012. I thinks she gets it right in noting, "The data demonstrate that the increase in activity by monetizers in recent years is not an artifact of the changes in the America Invents Act, but represents a true rise in the level of litigation activity."
I am not saying let's give any patent monetizer a free pass, but let's stop labeling them patent trolls and let the FTC investigation take its course. It should help identify conduct that needs to be stopped before we rush to change laws. Otherwise, Congress' efforts to change the law may bar legitimate patent enforcement and licensing activity.
Copyright © 2013 Robert Moll. All rights reserved.
