by Joe Mullin
Electronic Frontier Foundation
Reprinted under Creative Commons Attribution License
The U.S. Patent Office has proposed new rules about who can challenge wrongly granted patents. If the rules become official, they will offer new protections to patent trolls. Challenging patents will become far more onerous, and impossible for some. The new rules could stop organizations like EFF, which used this process to fight the Personal Audio "podcasting patent," from filing patent challenges altogether.
If you have a personal experience with patent troll attacks, please mention it. Comments are not anonymous and you should use your real name.
TAKE ACTION: Tell USPTO To Work For the Public, Not Patent Trolls
We need EFF supporters to speak out against this proposal, which is a gift for patent trolls. We're asking supporters who care about a fair patent system to file comments using the federal government's public comment system. Your comments don't need to be long, or use fancy legalese. The important thing is that everyday users and creators of technology get a chance to state their opposition to these rules.
Below this paragraph you can see a simple proposed comment you can cut-and-paste to express your opposition to the rules. It's even better if you add one sentence or more to the comment, especially if you can mention your own experience with the patent system. Of course, you can also write your own original comment.
I am opposed to the USPTO's proposed rules changes for inter partes review (IPR) and other patent challenges. These proposed rules should be withdrawn, and the IPR process should remain open to all. The USPTO should follow the rules Congress set out, and consider all patent challenges, including IPR petitions, on their merits.
IPR Is The Best Process For Limiting Bad Patents
The Patent Trial and Appeal Board, or PTAB, is one of the only places in the nation where patent trolls can be held to account for the outrageous and harmful claims they make in their patents. Congress created the "inter partes review" (IPR) process, which is overseen by specialized PTAB judges, more than a decade ago. "Inter partes" simply means "between the parties," and the IPR process allows members of the public to challenge patents that never should have been granted in the first place.
The IPR process is one of two main ways to challenge patents, along with challenging them in district court. The big difference is that the IPR process, while not simple or cheap, is much faster and cheaper than going to trial in federal court. Invalidating a patent in court can cost millions of dollars, while even a complicated IPR process costs a fraction of that.
Through IPR, thousands of patents have been thrown out. The patent challengers who have kicked out some of these wrongly-granted monopolies have protected not just themselves, but countless other hobbyists, software developers, small businesses, and nonprofits, who could no longer be threatened with some of the worst patents to slip through the cracks.
- A patent troll called WordLogic tried to shake down Wikipedia for $30,000. Once PTAB gave its initial ruling—that WordLogic's patent was likely invalid—WordLogic got smart and settled the case. The lawsuits WordLogic was pushing against Wikipedia, and many other organizations, were dropped.
- A patent troll called SportBrain Holdings sued more than 80 companies on a patent they said covered getting user data, then sharing it over a network and providing feedback. The patent did not hold up to serious analysis. When a panel of PTAB judges looked at it, they canceled all claims. SportBrain was challenged by Unified Patents, a membership-based for-profit company that will be explicitly banned if the USPTO enacts these troll-friendly rules.
- Shipping and Transit LLC (formerly Arrivalstar) filed for bankruptcy in 2018 after more than a decade of litigation and 500 patent lawsuits. Shipping and Transit sued a vast array of retailers and shippers, claiming its patents covered almost any type of delivery notification. In its court filings, it valued its own portfolio of 34 U.S. patents at $1. IPR filings against Shipping and Transit, together with court fee orders, were a critical part of ending this onslaught against small business.
The IPR process hasn't eliminated patent trolling. But it's been so effective that patent trolls and their pro-patent protectors absolutely hate the process. That's why they are pushed so hard for these proposed rules, and are celebrating their arrival.
The Proposed Rules Deliberately Sabotage The IPR System
USPTO Director Kathi Vidal has already tried to walk back responsibility for these rules. She said in Congress last month that the rules "giving stakeholders a chance to shape the rules." But the only "stakeholders" who seem to have had a hand here are patent trolls and large patent-holders.
Many patent trolls would be exempt from IPRs altogether. The USPTO would prohibit anyone from challenging the patents of "small entities" and "under-resourced inventors." But it's trivially easy for even the most litigious patent trolls to portray themselves as "small inventors." It happens all the time, and the USPTO rules buy into this sham. Many "inventors" are patent attorneys who have learned to game the system; they haven't invented anything other than patents. Patent trolls that have sued hundreds of small businesses, and even public transportation systems, including Shipping and Transit LLC and various Leigh Rothschild entities, have claimed to be "inventor owned" businesses.
If these rules were in force, it's not clear that EFF would have been able to protect the podcasting community by fighting, and ultimately winning, a patent challenge against Personal Audio LLC. Personal Audio claimed to be an inventor-owned company that was ready to charge patent royalties against podcasters large and small. EFF crowd-funded a patent challenge and took out the Personal Audio patent after a 5-year legal battle (that included a full IPR process and multiple appeals).
TAKE ACTION: We have a right to fight back against patent trolling
The Idea That People Challenging Patents Are Abusing The System Is Absurd
The rules create an upside-down world in which people who work to challenge patents are treated as the abusers of the system, rather than the patent trolls they're up against. For instance, the rules would punish groups that file "serial petitions" or "parallel petitions" by simply denying them access to the PTAB. It also creates new rules denying petitions "to ensure that certain for-profit entities do not use the  processes in ways that do not advance the mission and vision of the Office to promote innovation."
But it's the patent office's own wrongly granted patents—each one a 20-year government-granted monopoly—that often inhibit innovation. USPTO patents have allowed business models like Lodsys, the company that sent out hundreds of threats to small app developers demanding royalties for using basic, off-the-shelf in-app payment systems. The office has done nothing to rein in patent trolls; but now that there's a system that can occasionally challenge them.
This is wrong. It's in the public interest to challenge patents and test which ones are wrongly granted. All properly timed and filed patent challenges should be heard on the merits, whether they are filed by for-profits, non-profits, large entities or individuals. That's what Congress envisioned when it created the patent challenge process.
The Rules Are A Direct Attempt By USPTO To Overturn Congress's Power
The IPR process was created by Congress in 2013 to resolve certain patent disputes more quickly and efficiently than courts could. When evidence is presented that there is "prior art," or previously existing technology, that should have prevented the patent from issuing, the IPR process allows for a relatively quick quasi-judicial process that can result in patent claims being revoked.
The IPR process was created after a long debate by elected representatives. If Congress wants to change the system, they're able to do so. But USPTO officials must not be allowed to cripple patent challenges from the inside.
As USPTO's own statistics point out, it's actually a tiny sliver of "live" patents that are even challenged, much less invalidated. In the last fiscal year, the USPTO partly invalidated 350 patents. Compare that to the 300,000 patent grants USPTO is handing out every year.
The U.S. patent system remains wildly imbalanced—in favor of patent owners, not patent challengers. These proposed rules show that USPTO has it backwards. Please join us and speak out through the public comment process. No one should tolerate a patent troll takeover at PTAB.