Disclosure: I am pro-patent, not funded or paid by anyone. I am very active on Twitter (@theiphawk) defending patent holders and their legal rights. I actively invest in publicly traded patent investments. I am not a lawyer and have zero formal legal training.
With the 2014 Leahy bill now dead at the senate in the current session the current US patent reform battle is over. The "war" will continue to rage on in 2015 with another round of proposals in the future. Any changes need to be well thought out and not create collateral damages, which the 2011 American Invents Act has created. Petitioners are abusing the Inter Partes Review process by harassing patent owners, creating shell entities to challenge patents, extortion, and circumventing the one year civil litigation provision.
Fee shifting has been taken care of by SCOTUS. Let the courts enforce the recent decision and see what kind of effect it has on the system.
The goals and changes of any further reform are rather basic and we don't need complicated legislation to create more unneeded problems. The goals should be obvious: Protect end users, small businesses, and start-ups.
I think just about everyone involved in patents could agree that end users / small business and startups are frequently targeted by demand letters and abusive lawsuits that are expensive to fight. This practice needs to end as it casts a negative perception on every patent holder as they are lumped into one category. A few bad actors in the system and a massive multiyear PR campaign by big tech has created a very negative perception of patent holders and inventors.
My proposed legislation is pretty basic and I would love commentary from legal experts on the feasibility of my proposals. I propose the following to stop the abusive real patent trolls targeting end users, small business, and startups:
- Have a non-profit formed with federal government funding. A budget of $10-$20M per year would probably be enough. Have the non-profit hire a handful of patent lawyers and admin staff. The non-profit would be in charge of assisting end users, small businesses, and start-ups if they receive demand letters or filed patent cases. They would create a database, hotline, and website that victims could use to receive the proper help they need.
- Demand letters and litigation targeting end users, small businesses, and start-ups should be handled with a simple solution: invalidate the patent. Create a provision that if a patent is identified as a frequent abuser of the legal system targeting the above, it will be grounds to have the patent invalidated. My above non-profit could meet once a month or quarterly with a panel at the Patent Trial & Appeal Board (PTAB). Have the PTAB look at the relevant information and be able to make a decision to invalidate the patent. In most cases it is common sense if the patent is being abusive or not. If a patent has 200 demand letters or cases filed against very small entities it is being abused. Let the PTAB decision appeal-able to the Federal Circuit.
- Any lawyer found to be sending the demand letters or filing litigation on the patent owner's behalf should be sanctioned. A first instance should be a warning and $10,000 fine. A second instance should be disbarment for five years and a $50,000 fine. A third instance would be a lifetime disbarment and a $100,000 fine.
These are very simple actions that would essentially squash the trolling by bad actors. Making the trolling economically unfeasible would go a long way to stamping out the bad actors in the system.
I could ramble on and make a good argument on much needed changes to end big tech's economical infringement strategy, but enough for the moment.
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