from the why-does-the-pto-want-more-bad-patents? dept

So, this is bad. Over the last few years, we’ve written plenty about the so-called “inter partes review” or “IPR” that came into being about a decade ago as part of the “America Invents Act,” which was the first major change to the patent system in decades. For much of the first decade of the 2000s, patent trolls were running wild and creating a massive tax on innovation. There were so many stories of people (mostly lawyers) getting vague and broad patents that they never had any intention of commercializing, then waiting for someone to come along and build something actually useful and innovative… and then shaking them down with the threat of patent litigation.

The IPR process, while not perfect, was at least an important tool in pushing back on some of the worst of the worst patents. In its most basic form, the IPR process allows nearly anyone to challenge a bad patent and have the special Patent Trial and Appeal Board (PTAB) review the patent to determine if it should have been granted in the first place. Given that a bad patent can completely stifle innovation for decades this seems like the very least that the Patent Office should offer to try to get rid of innovation-killing bad patents.

However, patent trolls absolutely loathe the IPR process for fairly obvious reasons. It kills their terrible patents. The entire IPR process has been challenged over and over again and (thankfully) the Supreme Court said that it’s perfectly fine for the Patent Office to review granted patents to see if they made a mistake.

But, of course, that never stops the patent trolls. They’ve complained to Congress. And, now, it seems that the Patent Office itself is trying to help them out. Recently, the USPTO announced a possible change to the IPR process that would basically lead to limiting who can actually challenge bad patents, and which patents could be challenged.

The folks over at EFF are rightly raising the alarm about just how bad this could be if it goes into effect.

The U.S. Patent Office has proposed new rules about who can challenge wrongly granted patents. If the rules become official, they will offer new protections to patent trolls. Challenging patents will become far more onerous, and impossible for some. The new rules could stop organizations like EFF, which used this process to fight the Personal Audio “podcasting patent,” from filing patent challenges altogether. 

The wording of the proposed changes seems to be written in a manner to be as confusing as possible. But there are a few different elements to the proposal. One part would limit who can bring challenges to patents under the IPR system, utilizing the power of the director to do a “discretionary denial.” For example, it would say that “certain for-profit entities” are not allowed to bring challenges.

Why? That’s not clear. But what difference does it make if the operation bringing the challenge to a bad patent is for-profit or not-for-profit? A bad patent is a bad patent, and often for-profit entities have the resources to actually hunt down the necessary prior art and to hire the best patent lawyers to bring a credible IPR challenge.

But the more worrisome change is this one:

Recognizing the important role the USPTO plays in encouraging and protecting innovation by individual inventors, startups, and under-resourced innovators who are working to bring their ideas to market, the Office is considering limiting the impact of AIA post-grant proceedings on such entities by denying institution when certain conditions are met.

Basically, if a patent holder is designated as an “individual inventor, startup” or “under-resourced innovator” then their patents are protected from the IPR process.

But, as anyone studying this space well knows, patent trolls often present themselves as all three of those things (even though it’s quite frequently not at all true). Patent trolling operations love to present themselves as the “small inventor,” even if they just got a terrible patent and sat on it waiting for someone to build something successful that — if you squint — can be presented in way that if someone doesn’t read carefully they might think violates the patent.

And, again, none of this should matter. A bad patent is a bad patent. Why should the USPTO create different rules that protect bad patents? If the patent is legit, it will survive the IPR process.

As EFF notes:

Many patent trolls would be exempt from IPRs altogether. The USPTO would prohibit anyone from challenging the patents of “small entities” and “under-resourced inventors.” But it’s trivially easy for even the most litigious patent trolls to portray themselves as “small inventors.” It happens all the time, and the USPTO rules buy into this sham. Many “inventors” are patent attorneys who have learned to game the system; they haven’t invented anything other than patents. Patent trolls that have sued hundreds of small businesses, and even public transportation systems, including Shipping and Transit LLC and various Leigh Rothschild entities, have claimed to be “inventor owned” businesses. 

If these rules were in force, it’s not clear that EFF would have been able to protect the podcasting community by fighting, and ultimately winning, a patent challenge against Personal Audio LLC. Personal Audio claimed to be an inventor-owned company that was ready to charge patent royalties against podcasters large and small. EFF crowd-funded a patent challenge and took out the Personal Audio patent after a 5-year legal battle (that included a full IPR process and multiple appeals). 

If you click through to the EFF page they show how you can provide comments to the USPTO on why it should not move forward with this plan, so if you’re concerned about giving patent trolls more power to abuse bad patents to stop innovation, please consider sending in a comment.

Filed Under: , , ,

Read More