H.R. 6557 – The Inventor Protection Act and the Discriminatory Application of the Law

“What patent owners really need is a bill that provides the same relief to all patent owners instead of a particular, arbitrarily favored class.”

by: Ben Brownlow, Senior Vice President, Licensing | August 16, 2018

On July 26, 2018, Rep. Dana Rohrabacher (R-CA-48) introduced the Inventor Protection Act (“IPA”) (H.R. 6557) which now sits before the House Judiciary Committee for further consideration.[i]  Sec. 3 of the IPA would amend 35 U.S.C. Sec. 100 to add subsection (k), which defines the term “inventor-owned patent” as “a patent held entirely by the inventor of the claimed invention.”[ii]  Essentially, if you are an individual inventor (or a joint inventor who has obtained a contractual assignment of the other inventors rights in the IP) you will now have a more favorable set of rules with which to protect your property.

Sec. 330 of the IPA outlines the favorable treatment that inventor-owned patents would receive:

  • inventor consent required prior to being subjected to USPTO reexamination, review or other validity determination;
  • eliminates the application of TC Heartland, which would return choice of venue to the plaintiff in a patent infringement action;
  • inventor consent prior to transfer of a civil action involving an inventor-owned patent for convenience;
  • expedited judicial proceedings, including: trial within 12 months from service of complaint; maximum trial duration of 7 days; maximum of 10 discovery requests for each party; pleadings limited to 100,000 words per party;
  • simplified damages relief, including “the greater of (I) the total profits attributable to the infringing party’s use of the patented inventor; or (II) 25 percent of the sales attributable to the infringing party’s use of the patented invention…”
  • presumption of willful infringement if the party is “an expert in the field of the invention.”

Clearly, inventor-owned patent plaintiffs in such circumstances would have a huge advantage over all other classes of patent owner plaintiffs.  And the definition of “inventor-owned patent” is puzzling.  For example, what about patents with joint inventorship?  I guess these inventors would be out of luck as they would miss out on the enhanced protections afforded by the IPA.  Are we punishing team work now?  Come on.

Bills like the IPA only contribute further to the running national punch line that Congress has become.  Rep. Rohrabacher is one of several Congressmen appearing in Sacha Baron Cohen’s new Showtime series “Who is America?” during which he agrees with the notion that schoolchildren should be armed with guns to prevent school shootings.[iii]

If this bill were to be enacted into law, any company or group of inventors would simply track down all of the inventors (or, even easier, company employees through corporate records!) named on a particular patent flagged for litigation and assign the patents back to one of the inventors to hold as an “inventor-owned” patent.[iv]  The company would then contract with the inventor to fund the litigation, run the litigation, and establish a modest plan for the inventors to somehow share in the proceeds. Companies have a singular mission to maximize shareholder value – period.  Does Congress really think that profit-driven U.S. enterprises aren’t going to take advantage of this favored status somehow?

Recent legislation and Supreme Court decisions have made it increasingly difficult for all patent owners to license their ideas and receive fair value for a true discovery.  What patent owners really need is a bill that provides the same relief to all patent owners instead of a particular, arbitrarily favored class.  The Findings outlined in Sec. 2(3) of the IPA include a list of admissions that the patent system has been harmful to inventors in general – “[r]ecent changes to patent laws and procedures and Supreme Court decisions have adversely affected inventors such that the promise of article I, section 8 of the Constitution of ‘securing for limited times to inventors the exclusive right to their discoveries’ is no longer attainable.”[v]  The bill goes on in Sec. 3(8) to admonish the “efficient infringement” business model, whereby corporations with deep pockets (and undue lobbying influence) infringe on patent rights held by inventors (not just individual inventors) without concern for any legal consequences.

For these foregoing reasons (and many more), the U.S. continues to fall behind the rest of the world in IP protection.[vi]  The U.S. ranks 13th in Patent Rights behind nations like Italy and Spain in the 2018 U.S. Chamber International IP Index, which notes that “the U.S. is no longer a global leader in this category of the Index. It is notably behind the top performers owing to uncertainty over patentability standards and a relative low score for opposition proceedings.”  Every class of patent owner deserves to have a fair opportunity to realize the value from their discovery.  And if there is a fundamental Constitutional right for “inventors” to have a secure and exclusive right to their respective discoveries, shouldn’t that exclusive right include the freedom of contract to assign (and receive compensation for) their patent rights to a more sophisticated partner who can handle licensing and enforcement activities.  Does Congress really intend to encourage inventors to spend more time dealing with the grind of patent enforcement rather than focusing on the development of novel ideas in their respective fields of expertise?  The IPA is plainly bad policy drafted by those without the knowledge or expertise to meaningfully address the dire need for patent reform.

[i] https://www.congress.gov/bill/115th-congress/house-bill/6557/committees

[ii] https://www.congress.gov/115/bills/hr6557/BILLS-115hr6557ih.pdf

[iii] https://www.businessinsider.com/sacha-baron-cohen-who-is-america-arm-preschoolers-guns-2018-7

[iv] See Sec. 301(IV) of the USPTO Manual of Patent Examining Procedure, available at https://www.uspto.gov/web/offices/pac/mpep/s301.html.

[v] Supra at ii.

[vi] http://www.theglobalipcenter.com/wp-content/uploads/2018/02/GIPC_IP_Index_2018.pdf (at 35-36).

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