The term “patent troll” conjures up all kinds of images and ideas, but what is a patent troll? Unfortunately, there is really no universally accepted definition of what a patent troll is, although if you are getting sued for patent infringement by a non-practicing entity, you probably think you are being sued by a patent troll.
My view has long been that companies that complain about patent trolls don’t really want them to go away. Patent trolls are extremely valuable to these big tech companies because they are an identifiable and unsympathetic villain, even if they cannot really be defined in any satisfying way. The image of a patent troll can be paraded about Capitol Hill whenever patent reform is being pushed, or even in front of the Supreme Court, which increasingly seems to be interested in taking them into consideration when reaching decisions, despite them not being involved in the case.
I personally hate the term patent troll, which may come as a shock to many because I use it all the time. I use it to attempt to crystalize the issue, because the term “patent troll” has over time become synonymous with “non-practicing entity,” and not all non-practicing entities are bad. In fact, many are good actors that diligently work against long odds to research and develop new technologies, treatments, drugs and therapies we all want.
The Federal Court of Australia issued a ruling recently that is directly opposite to the ruling rendered by the United States Supreme Court relative to gene patents. In Yvonne D’Arcy v. Myriad Genetics, Inc., the Federal Court of Australia ruled that Myriad’s claims to isolated DNA are patentable under the laws of Australia. That is the ruling the U.S. Supreme Court should have reached in Association of Molecular Pathology v. Myriad Genetics. As the patent eligibility laws of the U.S. become increasingly inhospitable to high-tech innovative businesses, we can expect more job losses and worse news for the U.S. economy on the horizon.
Particularly interesting is that the Federal Court of Australia went out of their way to question the reasoning of the United States Supreme Court, and say that it is exceptionally difficult to reconcile Diamond v. Chakrabarty with AMP v. Myriad Genetics. I have previously written that AMP v. Myriad Genetics overrules the fundamental holding in Chakrabarty, with many disagreeing. I feel certain that my reading is correct, and the Federal Court of Australia agreed.
The Partnership for American Innovation (PAI), which is comprised of Apple, DuPont, Ford, GE, IBM, Microsoft and Pfizer, recently submitted comments responsive to a request for public information published in the Federal Register. This Federal Register Notice was published on July 29, 2014, titled Strategy for American Innovation, and largely flew under the radar screen.
In February, 2011, President Obama released a Strategy for American Innovation, which described the importance of innovation as a driver of U.S. economic growth and prosperity, and the critical role the government plays in supporting the innovation ecosystem. The Office of Science Technology Policy and the National Economic Council are now tasked with updating the document to create a revised Strategy for American Innovation. This updating of the strategic vision for innovation in the United States was the subject of this Federal Register Notice.
To remind the White House of just how important a strong intellectual property system is for the U.S. economy. the leading innovators that make up the PAI explained just how important innovation is to the U.S. economy.
In a blog post from March 2014, Marian Underweiser, IBM’s Counsel for IP Law Strategy & Policy, wrote:
Computer implemented inventions, particularly in software, form the basis for innovation not only in the technology products we use every day, such as laptops and smartphones, but in everything from cars to surgical techniques to innovations that increase efficiency and production in factories. Strong and effective patent protection for these innovations in the U.S. has fostered a fertile environment for research and development and, as a result, the US is the undisputed leader in the software industry.
But will the U.S. be able to maintain its position as the leader in the software industry under a patent regime that seems openly hostile toward software innovators?
Unfortunately, many simply won’t believe what IBM says because, as one of the most innovative companies in the world, they are also the top patent filer ever year. IBM is a company that spends $6 billion annually, year after year, on research and development, so they have a bias. But the Government Accountability Office does not have a vested interest and, in a 2013 report, they concluded that between 50% and 60% of all patent applications filed seek protection for innovation related to software in one way or another. That means that at least half of all innovations could potentially be lost due to the Supreme Court’s failure to follow the enacted patent statutes and instead act as a super legislature that despises all things patent. The Alice decision will likely be viewed in years to come as a devastating decision for high-tech entrepreneurs and start-ups.
Since the United States Supreme Court issued its decision in Alice v. CLS Bank, I have been arguing that the decision would have far reaching implications for software patents. Initially, many were skeptical, and surprisingly many still are, even with the Patent Office issuing Alice rejections like they are candy at Halloween, with the Federal Circuit invalidating software claims in case after case citing Alice, and with the PTAB likewise finding software patent claims of all types invalid. There is no doubt that things are different and a great many issued software patents and pending software applications will be worthless. Sure, moving forward, we have ideas about what needs to be in the disclosure, but you cannot add new matter to an application or issued patent, and software patents are now all about the technical disclosure.
Against this backdrop of disbelief and denial, I spoke with Professor Mark Lemley on August 28, 2014. Lemley shares my view, for the most part. I published our entire interview on IPWatchdog.com, The Ramifications of Alice: A Conversation with Mark Lemley. What follows are some of the highlights of our conversation.