Should Systemic Changes to The Patent System Be Undertaken in Response to Bad Actors?

Efforts to enact patent reform (as well as the America Invents Act of 2011) are/were largely driven by the perception that the patent system is being abused by bad actors. Currently, many of the most established technology companies in the world are routinely sued for patent infringement by small/medium sized patent holders. The larger, established targets of these lawsuits consider these smallish companies “patent trolls.” They insist that the current legal system is enabling trolls to inflict legal expense as a form of extortion in exchange for license payments. On the other side of the equation is the small/medium sized patent holders that claim the present system is necessary to ensure a fair shake for all innovators, regardless of size or business. And, that the present system has existed for decades to the benefit of big business. 

That is, pure licensing entities characterize the debate as being about who they are instead of their conduct. In that sense it reminds me a lot about of the debate that raged in the wake of the O.J. Simpson trial. 

O.J. was considered a bad actor by many (pun intended). Yet, his ability to side-step the legal justice system was either heralded as confirmation that the system was finally balanced for everyone—regardless of race—or was a travesty of justice that led to a guilty man walking free. Those that believed O.J. was guilty focused on his conduct and what they insisted to be an incorrect outcome; others viewed his unlikely victory as a ringing endorsement of equal treatment (i.e., who he was). 

Criminal defendants enjoy a presumption of innocence, Patentees enjoy a presumption of validity. Criminal defendants must be found guilty beyond a reasonable doubt, Patents must be found invalid by clear and convincing evidence. Clearly, like O.J. …..some patents that are “guilty” of being invalid are roaming free; this is nothing new.  Like O.J., small entities would argue that large companies just don’t like the identity of the “bad actors” now gaming their system. In other words, they argue that the current patent reform debate is driven by the significant lobby interest of the status quo to the detriment of new entrants to the game. While I don’t believe that to be the case, the endless debate over defining what a “troll” is, rather than what they do, is feeding a growing legislative morass. 

The volume of patent suits has risen substantially over the past 10 years. It is the volume of bad patents being asserted that is truly new. It is not so much the new entrants to the game, or their size/nature of their business that is the real problem. Rather, it is the low quality patents that are unique to these cases.   

So, how do we balance the interests of maintaining an enforcement system for all players, large and small, but provide a disincentive for the truly abusive behavior? 

Simple, you take the ill-gotten weapons away, and quickly.  The AIA provided this very control in the form of PTAB proceedings that apply lower standards of patentability relative to the validity determination of the district courts. Remember that O.J. was ultimately tried in a civil court under different standards for wrongful death, that outcome was not so favorable for him. The PTAB is working in the same way. The truly “guilty” are not faring so well.