Part II: Who Is Served By The EFF Scheme To Continue Destroying Patent Rights?

Electronic Frontier Foundation

The negative and arbitrary decisions brought to us by the Alice logic are harming 100x the number of small entities the EFF contends are helped.


Nick Gross IPWire Profile Picture  by: Nick Gross, special guest contributor | September 13, 2017

In my prior post I pointed out the massive destruction of patent rights by the PTAB – supported by the EFF – under the rubric of simply applying the Alice SCOTUS decision. The minor benefits identified by the EFF arising from the Alice decision in helping a few litigants are dwarfed by the massive negatives imposed on the US patent system as a whole as a result of the uncertainty surrounding what technologies can be protected.

Again too, it is not that these inventions by these companies were rejected by the PTO as unworthy because of prior art – i.e., that someone thought of it before: rather they were denied as not even being eligible or worthy for consideration for a patent. In other words these inventions are not being measured by their merits, they are being denied consideration solely based on their subject matter. Under this bizarre anti-innovation rubric advocated by the EFF, an invention directed to a new gaming algorithm has less right to a patent than an invention covering a new toothpick shape.

Notably, the examples I provided were only taken from recent reported PTAB decisions, which is a fraction of the cases being reviewed right now in the PTO. It does not begin to tell the wholesale destruction of small inventor/startup rights by the PTO on a daily basis during regular examination. Specifically, according to recent statistics published by Juristat, the PTO is rejecting more than 15,000 patent applications per quarter based on a twisted application of the Alice case, the bulk of which are precisely in the small software startup innovation space.

By every objective metric therefore the negative and arbitrary decisions brought to us by the poorly applied Alice logic are harming 100x the number of small entities that the EFF contends are helped. This kind of “cure” for bad patents has “side effects” that are clearly orders of magnitude worse than the problem.

Yet even while the EFF is keenly aware of these facts, it continues to peddle the false narrative of small businesses being “saved” by these random applications of the Alice decision. Why would it do so?

More broadly, why is the EFF advocating technology bias by the PTO, so that certain areas of technology are forced to go without the benefit of patent protection? Contrary to the EFF’s position the Alice decision, notably, has no such technology-bias.

The answers, as usual, are very simple: because these positions serve the bigger hidden purpose of neutering IP rights for small inventors/innovators so that they are not a threat to EFF’s larger corporate sponsors. It is no secret that Google has been a large contributor to the EFF over the years, and as recent stories report it demands a certain amount of fealty and obedience for its financial support.

Indeed, in contrast to the hundreds of daily Alice “losers,” there are a few notable major “winners” from this PTO behavior, namely, large de facto monopolies such as Google and Facebook. These entities are huge beneficiaries of the anti-competitive technology “patent carveout” – being carried out by the PTO and its agencies – in which few if any patents are allowed involving these companies’ core technologies.

For example, in a recent decision the PTAB declared that patents for online auctioning for ad slots are effectively off limits because that technology implicates “…a fundamental economic practice long prevalent in our system of commerce” and “a building block of the modem economy.” Essentially the PTO (under the politically biased stewardship of an ex-Google employee it should be noted) has granted Google’s Adsense and Adwords ad serving auction products a perpetual de factor monopoly under the ruse of “applying” the holding in the Alice case. Other companies are barred from obtaining patents in this space, as the PTAB has roped it off and declared it off-limits, immunizing Google forever from having to pay for innovations in that realm. Given that reality, what rational tech company would be foolish enough to spend big R$D to develop improvements in a space that can be readily copied by Google with no repercussions?

This is the bizarre interpretation of Alice advocated by the PTO but supported fervently by EFF. As the evidence shows, the EFF supports a patent system which by design consistently hurts hundreds of high tech software companies trying to protect their inventions. This scheme does not protect small innovators as the EFF advertises; rather its main purpose is to serve and benefit large contributors friendly to the EFF. The EFF fairy tale of small companies haunted by evil “patent trolls” that can only be saved by Alice is a convenient smokescreen to hide an ongoing, well funded anti-IP agenda.

About the author: J. Nicholas (Nick) Gross is a Berkeley based solo IP law practitioner with 30 years of experience representing high technology companies in Asia, Europe and Silicon Valley, including in the areas of patent prosecution, patent assessment, brokering, licensing and enforcement matters. His PTO experience encompasses all phases of patent procurement including drafting, PTAB appeals, post grant challenges and appearances at the Federal Circuit. He has worked with inventors in a number of complex technologies, including xDSL communications, mobile applications, magneto-electronic devices, flash memories, solar modules, semiconductor processing, epitaxial materials, speech recognition, Internet/e-commerce, microprocessor architectures and computer software.

Nothing posted at this site should be construed as legal advice or an offer for legal services. Should you need assistance on an IP matter, feel free to contact me at via email here.

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