When the America Invents Act (AIA) was passed in 2011 it was heralded as a way to fight “patent trolls.” Typical sentiments are expressed in an article from Forbes: A Powerful New Weapon Against Patent Trolls. Google did its usual excellent job of claiming—with absolutely no credible evidence – that the AIA would “promote innovation and protect the little guy.” All it cost Google to get politicians to buy into this fictitious plan was some money – a few well-timed and well-placed donations to politicians on both sides of the aisle. And Google has plenty of money. The more impressive “sale” Google made was getting other large corporations to buy into into their malarkey.
In a classic case of “unintended consequences,” one of the great “troll-killing” tools, the inter partes review (IPR), is increasingly being used not only by operating companies in general, but by foreign operating companies in particular.
It’s a little bit like “cutting off your nose to spite your face.” Operating companies that were so in favor of “patent reform” to stop “patent trolls” are now finding their own patents being challenged by foreign competitors eager to enter the US market.
One day’s data is more anecdotal evidence than a statistically rigorous study, but it’s interesting to note that on one day, February 10, 2016, there were nine IPRs filed with the Patent Trial and Appeal Board (PTAB). All nine were filed against patents owned by US-based operating companies not typically thought of as “trolls” by anyone’s definition.
Not only that, six of the nine IPRs were filed by competitors from Germany, Holland, and South Korea.
The IPR was created by the AIA as a way to challenge patents at the patent office with an administrative procedure that is faster and cheaper than litigation in court. The bill of goods that was sold to all of us—including large corporate patent owners – was that the AIA was supposed to help the “fight against patent trolls” by making it easier to kill the supposedly “weak” patents they were thought to use to “target” poor innocent operating companies. One of the key features of the IPR is that unlike litigation in court there is no starting assumption that the patent is valid. Furthermore, the claim terms are construed using a methodology that makes claims easier to invalidate. The bottom line—no matter how the USPTO attempts to skew and obfuscate the real data—is that the IPR process makes it MUCH easier to kill patents in an IPR than in court.
The inability to count on a patent’s validity hurts ALL patent owners, not just “NPEs.” As many operating companies are starting to find out to their chagrin.
Here’s one day’s list of who’s trying to kill whose patents:
- Three web-based companies, Kayak, OpenTable, and Priceline are going after two IBM patents.
- Fitbit is trying to knock out a patent owned by its competitor Aliphcom, aka “Jawbone.”
- Two Europe-based companies, ASML Netherlands and Qioptic Photonics (Germany), and Qioptic’s American parent, Excelitas, filed IPRs against two patents owned by US-based Energetiq Technology.
- South Korea-based Nautilus Hyosung is going after four patents owned by US-based Diebold.
So in summary, we have nine patents owned by US-based operating companies being challenged by their competitors – including companies from Holland, Germany, and South Korea that no doubt are looking for ways to enter the US market.
While all of these patents are in litigation, we’ve also seen operating companies use IPRs as “preemptive” strikes against competitors. We’d love to see some academician do some real research on the way IPRs are being used by competitors, especially by foreign competitors.
Just wait until Trump finds out that Congress passed a law that makes it easier for foreign companies to enter the US market and take away US jobs and deter US R&D spending. He’ll go ballistic.