Consider the IMPACT OF RECENT ACTIONS BY THE SUPREME COURT, FEDERAL TRADE COMMISSION, USPTO, AND JUDICIAL CONFERENCE
- Since the beginning of 2014, the Supreme Court has issued decisions that have increased the opportunity to assess court fees and penalties to entities that bring abusive patent cases, narrowed the scope of software-related business method patents and clarified the meaning of "indefiniteness" when assessing patent claims.
Specifically, the Supreme Court's decisions in the Alice and Mayo cases have dramatically altered the rules for patentability in the software and biotechnology industries. The U.S. Patent and Trademark Office (USPTO) itself called the new rules for biotech patents "game changers."
In November 2014, the Federal Trade Commission (FTC) took action against a Texas-based company with a history of abusive tactics built on deceptive demand letters sent to hundreds of small businesses. The FTC's action demonstrates a willingness and the legal capability to crack down on deceptive and abusive demand letters.
The USPTO has actively implemented the America Invents Act (AIA) of 2011. The AIA includes numerous provisions that have impacted patent examination and dramatically expand supplemental examination of issued patents.
The USPTO's new Inter Partes Review process has ushered in a flood of new rules and procedures that provide a second window to review any U.S. patent. In 2015, the USPTO invalidated 75% of the patents subjected to an Inter Partes Review.
The U.S. Judicial Conference recently adopted changes to the Federal Rules of Civil Procedure that will ensure that patent cases meet the heightened pleading standards required of all other federal cases. The changes also will ensure that discovery in patent litigation will be “proportional to the needs of the case,” reducing the ability of patent plaintiffs to use unnecessary discovery requests to drive up costs for defendants in an effort to force unwarranted settlements.
NARROWLY ADDRESS TRUE ABUSES
- Based on the numerous changes to the patent system listed above, we believe there is little, if anything, left for Congress to address and the risk of doing more harm than good to our patent system is very real.
We join other major patent owners, researchers, inventors and startups in a willingness to collaborate to find narrow, tailored solutions that fit real problems. We do not support a major overhaul to our patent system to lower the costs for major corporations who simply see patents as a nuisance and an inconvenient cost of doing business. To the extent small retailers are the target of abusive patent demand letters, let's fix that. The FTC has already shown it has the legal authority to address the problem and is willing to take action.
FOCUS ON THE ROLE OF INVENTORS
- We are focused on the role of inventors and how the U.S. patent system can actually support and empower them, not work against them. In its narrow-minded focus on "patent trolls," Congress has lost sight of inventors, entrepreneurs and startups who depend on the patent system. What does a positive set of improvements to the patent system look like? We have a lot of ideas.
First, Congress is focused on the enhancement of pleading standards for patent infringement complaints. This addresses only part of the overall problem. We believe Congress should also change the similarly loose standard for the assertion of patent defenses such as validity.
Congress should address abuse of the Inter Partes Review (IPR) process that was introduced by the America Invents Act. This would include harmonizing the burden of proof that the USPTO uses for post-grant proceedings with the judicial “clear and convincing” standard, and creating an appeals process in federal court for USPTO post-grant review decisions.
Congress should address growing uncertainty and clarify the patentability of software and life sciences subject matter under Section 101 of the U.S. Patent Act.
Congress should harmonize the standard for willful infringement with the standard for awarding attorneys’ fees established in Octane Fitness. In Octane, the Supreme court made it easier for judges to award attorneys' fees when they determine abusive behavior or frivolous cases. Congress should establish the same standard for assessing the behavior of defendants accused of patent infringement. This is simple legal parity, and will protect countless inventors, startups and small companies when faced with large corporations who are willfully infringing their patents.
IMPROVE PATENT QUALITY
- End fee-diversion at the USPTO. The PTO collects user fees to support its operations, Congress has for years diverted some of this funding to support the rest of the government. This practice must stop and the PTO should be given the confidence to plan its future operations without Congressional interference in its budgeting.
We support and work closely with a number of USPTO satellite offices, including in Silicon Valley.
USPTO should leverage technology to improve its search capabilities, and continue its efforts to train and retain examiners in key technology groups.