Fifth time lucky Patent bill tries to castrate America Invents Act

The America Invents Act which is barely 4 years old, will have yet another attempt at diluting its effects pushed for consideration by Congress to make it into legislation this session. It is being called the Stronger Patents Act, a name extension to the Strong patents act that failed to get passed during 2016, and brought by many of the same Senators. The details have barely changed, and the aim is the same, to make it harder to challenge a patent. Essentially it is pro-big business.

The America Invents Act had two roles – firstly to align the US with the rest of the world on the idea that the person who files a patent first is the person considered to have come up with the invention first. Previously the US, along with one or two other countries including Canada, allowed someone to read a patent, then produce evidence that it had, in fact invented the same thing first, in a subsequent filing. While that is not entirely globally aligned, in that the implementations differ somewhat, the Act achieved that. But in order to prevent bad patents getting onto the patent books in the first place there were two important challenges brought in for new patents, and the Stronger Act wants to make these challenges as difficult as possible – ostensibly to allow less cases to come in front of the Patent Trial and Appeal Board (PTAB).

To us this is nothing more than an attempt to reverse the America Invents Act, based on a ton of phony rhetoric regarding the “innovative” nature of the USA. It’s part of the “let’s make America Great again – Nostalgia ain’t what it used to be,” sentiment that seems to be sweeping the Trump administration. Clearly the changes are brought by a lobby of larger companies unhappy at having their “claims” on inventions challenged in court.

You’ve heard this sort of thing before, “The US is the world’s leading innovator, we need to protect that innovation, so we can grow the economy and grow jobs.”

Now we are about to commit sacrilege, so everyone who is of a sensitive predisposition, do the reading equivalent of putting your fingers in your ears. The US economy is not the world’s most innovative. Instead it is a magnet for innovators from all over the world, because it is the strongest economy.

The American Invents Act was fundamentally a good reform of prior Patent law, in that it prevents a large company building a patenting engine, which files patent after patent, without actually inventing anything. Such patents can be challenged cheaply as obvious or based on prior art using two instruments brought in with the act, the Inter Partes Review (IPR) and Post-Grant Review (PGR) which were brought in so that patents in the first 9 months of existence could be challenged without having to sue someone. This Act wants to reverse that, and make it so that only someone with a similar invention can challenge it and only if they make the complaint in the same language and under the same conditions as a legal challenge.

So instead of preventing the Apples and Googles of this world filing millions of patents that are nonsense, this would prevent anyone who is not rich from challenging these so-called inventions, making it pro-big business.

Regular readers will be aware of our attitude to Apple. It is a patent denier, refusing to accept that anyone else in the world can have patents. It ignores them until a court tells it otherwise, and never negotiates for technology rights on the basis that “if it had tried it could have invented it.”

It considers Open Source software that it has adapted, to be its own, and it uses patents not to make money from its inventions, but to prevent other companies from using anything it appears to have invented. Like the way it tried to prevent handset makers from using touch screens, which it did not invent at all, but it did decide on which gestures would be the best to use for them. Of course you cannot patent a gesture, although Apple seems to have achieved this under prior US law.

It is currently using its market weight to kill Imagination Technologies which has considerable GPU patents, which Apple says it can “avoid” by inventing its own GPU; it is not only refusing to pay the patent license it signed with Qualcomm, but is using its market weight to bully other licensees of Qualcomm to under pay also. Not that we are in favor of Qualcomm, which has clearly double and triple dipped on patent royalties in the past.

So the America Invents Act was supposed to put paid to the erroneous filing of fake patents, but someone is pushing Senators Coons, Cotton, Durbin and Hirono, to push this Patent reform bill which would take us back to the patent dark ages. The way to prevent large companies filing 5,000 patents a year, without inventing a single thing, is to not reward them for doing it, not insist that people have to stop objecting to these patents because it is forming a case queue. Of course once you have a process in place like this – cheap objections – it is likely to be misused by rivals.

This is about the 5th patent reform bill proposed in the US since the Act was introduced and we do not expect it to make it into law any time soon.

Despite its obvious big company aims, it suggests that the reforms would improve the chances of success for small companies and increase their chances of securing financing from investors, when clearly the opposite is the case. If you are unable to block a large company which is filing a generic patent which is obvious, which makes your patent look less appealing, then you have less change of making a go of it.

Here’s the thing. Intellectual Property is just that, a property. Apple got most of its IP in cellular from a group purchase of Nortel’s IPR. It has never invented anything fundamental to smartphones. The only way to retain a stranglehold on a technology market is to charge licenses if you actually invent something. US companies everywhere want to charge Chinese companies for using their inventions, while Chinese companies would rather use a different technology than pay license to a US tech firm.

The truth is that innovative people are distributed pretty evenly around the world, but a patent issued in say Sweden, has less clout than one subsequently issued in the US, by a US firm, even if it is pretty much the same as the patent filed in Sweden. And that definitely happens.

But more importantly the high value placed on companies in US stock markets, tends to lead to them being in pole position when it comes to taking over their international rivals. As a result they often acquire all the IPR of European firms when they buy them with their highly valued stock. Suddenly those assets become part of American innovation. So defending this bill on the basis that IPR based industries create jobs in the US is a bit like saying, “we’re rich because… well because we’re rich.”

And it is no surprise that the bill claims that intellectual property-intensive industries in the United States account for more than one-third of the country’s gross domestic product. But we would say to that, “Hey guys
it’s working, why change anything.”

One key element of the Bill is that the burden of proof would change from being on the patentor to show it owns the invention and that it genuinely IS an invention, in an Inter Partes case, to the company objecting having to assume the burden of proof. That means “If I cannot prove beyond a shadow of a doubt that your patent is not your or not obvious or it is based on prior Art, it must stand,” which obviates the entire America Invents Act.