By Stephanie Martz & Chris Mohr
The article can be found on realclearmarkets.com. Access it by following this link
As representatives of a broad coalition of diverse American businesses, from Main Street retail shops to technology companies, we supported the patent reforms made by the Leahy-Smith America Invents Act (AIA). In the AIA, Congress created the cost-effective, efficient, and expert process called Inter Partes Review (IPR) for addressing invalid patents and the abusive patent litigation that results from them. United for Patent Reform (UFPR) advocates for a patent system that enhances patent quality, advances meaningful innovation, and protects legitimate American businesses from abusive patent litigation, and we have supported the IPR process as critical to those goals.
For this reason, we are deeply concerned with the U.S. Patent and Trademark Office’s (USPTO) harmful proposals to weaken IPR. Many of the rules proposed by the USPTO undermine IPR’s core function to correct the grant of invalid patents, which flies in the face of the AIA. The proposed rules contradict this intent in numerous ways, including things as fundamental as changing the standard for the IPR process and placing restrictions on who can use it. Former Senator Leahy, an author of the AIA itself, recently wrote that “Not only do USPTO rules clearly violate the statute, but they would also reverse so much of the economic progress we’ve made as a result of the AIA,” and that “American manufacturers and consumers would shoulder the burden.”
That is why it is critical that the IPR process remains the efficient, cost-effective, and expert tool that it is for addressing errors made by the Patent Office, for the sake of the more than 90 million U.S. employees represented by UFPR’s members and for the health of our patent system. The USPTO’s proposals would do the opposite – reduce patent quality, stifle innovation, and bring back the days of rampant litigation on invalid patents.
Abusive patent litigation by non-practicing entities (NPEs), sometimes known as patent trolls, has been a persistent problem for years, with UFPR members routinely targeted. NPEs specifically prey on businesses lacking the resources to engage in lengthy patent litigation, seeking easy settlements regardless of the validity of their patent or the merits of their claims. In an example that is far too common, one NPE sued 74 businesses across 23 states for using technology that allowed them to print over a network, including many small, family-owned commercial printing shops.
The IPR process has proven invaluable for addressing abuses like this. By utilizing IPR, businesses have successfully challenged bad patents directly asserted against them or have benefited from their suppliers and service providers doing so on their behalf. For instance, in the case where an NPE went after businesses across the country for printing over a network, several commercial printer companies used the IPR process to have the USPTO review the patent in question, and it was found to be invalid. In another case where thousands of small businesses were threatened with patent litigation over scan-to-email technology, the scanner manufacturers used the IPR process to invalidate the patent, allowing these businesses to restore their customers’ access to this technology. These success stories highlight the importance of a robust IPR process in safeguarding businesses that can’t withstand the distraction or expense of full-scale patent litigation.
A recent study confirms the importance of the IPR process to American businesses and consumers. The study shows that IPR has passed on billions in direct cost savings to businesses which has contributed significantly to the U.S. economy, spurring $3 billion in gross product and creating 13,500 job-years of employment. This is why proposals like those the USPTO is making now fly in the face of what’s best for business. By weakening IPR, the proposed rules will bring about more litigation and unjust settlements, reducing resources available for innovation needed to develop new products and services and to create jobs.
The USPTO’s proposed changes to the IPR process would undermine patent quality, hinder innovation, and burden legitimate businesses with unwarranted litigation and settlement costs. We cannot let this happen. To uphold the integrity of the patent system and promote economic growth, it is imperative we protect and strengthen the IPR process. Let’s move forward – not backward. By doing so, we can ensure a fair and effective patent system that supports all American businesses.
