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An inventor’s perspective on patent reform

Several patent-reform bills are circulating through Congress. As an inventor, entrepreneur, and high-tech intellectual-property litigation consultant, I have seen patent reform from many angles. The Innovation Act (H.R. 9) and the PATENT Act (S. 1137) should concern individual inventors and entrepreneurs, while the STRONG Patents Act (S. 632) best protects their interests. Let’s first review the problems with the PATENT Act and the Innovation Act.

Heightened pleading standards. It is already difficult for individuals and small companies to fund litigation against an infringer. This provision will raise the cost of litigation by requiring patent holders to provide significant details before litigation can begin.

{mosads}Patent entity liability. This provision seeks to “unmask” patent holders’ identities. This might sound harmless, but I have seen how such information can bias a jury’s conclusions. Our legal system is based on equality under the law. Patent rights are not—and should not be—influenced by who owns the patent or how they operate their business.

Fee shifting. An individual inventor litigating against an infringer will incur staggering legal fees and significant risk. This provision will further increase that cost and risk by requiring the losing party to pay the winner’s legal expenses. What might be inexpensive to a large corporation could be financially devastating to an individual inventor. Our founding fathers worked to prevent this level of risk to individual inventors when creating the original Patent Act of 1790, which was designed to give commoners as much access to the patent system as wealthy individuals and businesses. For frivolous lawsuits, a judge already is able to award court costs to the winner.

Demand letters. This provision limits how an inventor can communicate with an infringer. It is promoted to quell abusers of the system, commonly known as “patent trolls,” that issue demand letters to intimidate unsophisticated parties into paying license fees. This type of harassment occurs more frequently in other areas, such as fraudulent debt-collection letters or phone calls from thieves masquerading as legitimate businesses. There are other ways to address the issue without limiting the free-speech rights of inventors. Educating small business owners about patents and infringement would allow them to understand that patent holders cannot afford to sue for such small damages, and so these threats are impotent.

The STRONG Patents Act

The STRONG Patents Act provides the best hope to protect the interests of individual inventors and entrepreneurs. It offers the following improvements over the Innovation Act and the PATENT Act:

Presumption of claim validity. This provision requires that defendants in a post-issuance review proceeding prove that a patent is invalid. It states what should be common sense—if the patent office examines a patent application, attempts to invalidate the patent, but eventually grants the patent, that patent is assumed valid unless proven otherwise by clear and convincing evidence.

Eliminates fee diversion from the USPTO. Today, Congress diverts patent office fees to fund other projects. This provision requires that fees stay within the patent office to improve the patent examination process.

Attorney fee shifting only in “exceptional” cases. This provision limits the costs and the risks for individual inventors litigating against an infringer while still empowering judges to penalize patent holders who bring frivolous cases.

Demand letters. This provision provides the Federal Trade Commission (FTC) greater ability to pursue entities that send fraudulent demand letters, without trampling the First Amendment rights of inventors.

Additional steps

While the STRONG Patents Act is a good step, I also advocate the following refinements to our patent system that would more quickly reject bad patent applications and allow good ones. Eliminating fee diversion from the USPTO under the STRONG Patents Act would create a budget for these goals.

Higher standards. Setting higher standards for patent examiner training, and hiring more examiners would facilitate faster but thorough patent examinations.

Better tools. Examiners need modern search technology and natural language processing tools to analyze patent applications and automatically find related prior art that can eliminate bad patents and confirm novel patents much more quickly than the five or more years it typically takes.

Our patent system can and should be improved with reforms. However, it is essential that we take a reasonable approach and avoid the extreme measures of the Innovation Act and the PATENT Act. I encourage Congress to enact the STRONG Patents Act to nurture the innovation that defines our nation and has made it a leading source of wealth for over 200 years.

Zeidman is the president of Zeidman Consulting. He is an entrepreneur and inventor with 22 patents to his name and a member of the Independent Inventors of America.


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