Inventors Deserve Better Than Mad Lib Patent Policy

“Relying on one-sided research and naked conjecture rather than real-life experience, Qureshi posits the U.S. patent system is overprotective of intellectual property and this inhibits innovation and the diffusion of new ideas.”

by: Ben Brownlow, Senior Vice President, Licensing | July 17, 2018

I trust that most of our readers recall the Mad Libs word game.  For those who are not familiar, the game includes several pages of short stories with several words omitted.  One person goes around the room and asks for whatever part of speech (e.g., noun, verb, adjective, etc.) is designated to fill in each blank to complete the story without providing the context for how a random word will fit into the rest of the story.  The resulting nonsensical and often hilarious short story is then read aloud to the group for all to enjoy.

Last week, Project Syndicate published an op-ed authored by Brookings Institute fellow Zia Qureshi that must have been composed with a Mad Libs template.  In his post – Intellectual Property, Not Intellectual Monopoly – Qureshi reveals precisely why academics should not be the leading voices in the ongoing debate on patent reform.[i]  Relying on one-sided research and naked conjecture rather than real-life experience, Qureshi posits the U.S. patent system is overprotective of intellectual property and this inhibits innovation and the diffusion of new ideas.

Qureshi sets the table by first highlighting the need for software patent protection in the evolving “intangible economy,” based on software embodied by lines of code and algorithms rather than more traditional physical assets. He further elaborated that the success or failure of a software start-up often depends on the strength of patent protection provided by the relevant granting patent office.  Patent eligibility standards for software-based processes have been gutted by SCOTUS precedent in recent years (see Mayo and Alice) to the point that patenting novel software algorithms may no longer even make business sense.  However, Qureshi goes on to make a series of head-scratching statements reflective of an academic viewpoint on public policy – approaching complicated policy questions with answers completely detached from the practical reality of current U.S. policy towards patents.

Below, I will break down some of the ridiculous quotes from the post that must have been the product of a patent-themed game of Mad Libs amongst Qureshi and his fellow academics.

Patents also invite considerable lobbying and rent-seeking. A majority of patents are used not to produce commercial value, but to create defensive legal thickets that can keep potential competitors at bay. As the system expands, patent trolling and litigation soar. Lawsuits by patent trolls comprise more than three-fifths of all lawsuits for IP infringement in the U.S., and cost the economy an estimated $500 billion in 1990-2010.

First, how is Qureshi defining a “patent troll?”  From his own words it seems that any patent owner seeking to license its patents would qualify.  In that case, just about every plaintiff in a patent infringement case brought in that time span would be a patent troll.  Furthermore, he cites lobbying as a byproduct of patents and in the same breath highlights the mythical patent troll problem. It is lobbying done by and on behalf of large corporations (not individual inventors or new market entrants) that has become a mainstay in beltway politics.  Although smaller companies and individual inventors do their best to get the attention of their representatives in Congress, it’s the large corporations actively and knowingly infringing patents that make large campaign contributions in exchange for legislation favorable to their business interests. The patent troll narrative has been debunked time and time again.  Big tech companies needed to create a boogeyman to paint all patent owners who protect their property rights with a broad brush based on the actions of a few bad actors who engage in abusive litigation practices.  This distraction has allowed these large corporate interests to steer the conversation on public policy toward a scapegoat rather than actual underlying systemic issues. There was never a need for comprehensive reform targeting NPEs – Federal District Courts have ample tools to smack down frivolous lawsuits brought by plaintiffs.

Some argue that the patent system should simply be dismantled. But that would be too radical an approach. What is really needed is a top-to-bottom reexamination of the system, with an eye to changing excessively broad or stringent protections, aligning the rules with current realities, and enabling competition to drive innovation and technological diffusion.

So, which is it?  Do we need to change broad protections or stringent protections?  Maybe he’s thinking we need medium protections somewhere in the middle?  Hard to say when Qureshi does not mention a single protection ripe for reexamination and change.

Qureshi is correct that dismantling a patent system that has contributed to global U.S. economic prosperity over the last 150 years is an absurd notion.  If you think the U.S. is having a tough time dealing with Chinese IP theft now, just wait until U.S. companies no longer have any patent protections against foreign importers, especially while foreign patent offices expand IP protection for domestic corporations. There is good reason that developing nations such as China have focused on strengthening IP protections for patents granted by its patent office.  Even a communist government such as China knows that strong IP protections have played a huge role in U.S. economic prosperity.  Meanwhile, the U.S. continues to fall behind the rest of the world in IP protection.[ii] Adding to the uncertainty stemming from muddled patent eligibility standards under Sec. 101, Congress passed the America Invents Act a little over six years ago which directed the USPTO to establish the administrative review process known as inter partes review – commonly known as PTAB “death panels” which provide defendant infringers with an alternative escape route outside of the judicial process and a higher likelihood of successfully avoiding liability for infringement.

One set of reforms to consider would focus on improving institutional processes, such as by ensuring that the litigation system does not favor patent holders excessively.

The above statement is either knowingly false or simply misinformed.  Does Qureshi seriously believe that the current litigation system excessively favors patent holders?  Perhaps this was simply the result of a game of Mab Libs gone wrong?  Was this article written by a software algorithm or a person?  Successful lobbying efforts on behalf of monopolistic technology companies (e.g., Apple, Google, etc.) have increased the complexity and the cost plaintiff’s must bear to collect licensing fees for valid and infringed IP.  How could an independent and objective observer determine that the current patent system unfairly favors patent owners over defendants accused of infringement (who are more often than not, patent owners themselves)?

Here’s a substitute noun for Qureshi’s Mad Lib sentence above that is rooted in the reality of current patent litigation conditions:

One set of reforms to consider would focus on improving institutional processes, such as by ensuring that the litigation system does not favor infringers excessively.

The most alarming aspect of this post is that both Democratic and Republican members of Congress cite Brookings Institute research as an authority in support of proposed legislation and public policy rationale.  The media also frequently cite Brookings Institute research as a supporting authority (when convenient) to add weight to biased news coverage of current issues and public policy debates.  Maybe if members of Congress and the media started listening to patent owners (outside of huge corporate donors) instead of inside-the-beltway, academic viewpoints from institutions like the Brookings Institute they could come up with some workable reforms that actually bear some nexus with the reality facing stakeholders in the current U.S. patent system.

[i] https://www.project-syndicate.org/commentary/intellectual-property-regime-tends-toward-monopoly-by-zia-qureshi-2018-07

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

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