Why Big Tech Wants You To Think There's A Patent Crisis
Big Tech has long felt free to help itself to the good ideas of smaller companies. It's bad enough that these giants fiercely contest the efforts of inventors to receive fair compensation -- a courtroom mismatch between small startup firms with a good idea but little money on one side versus behemoths valued into the trillion-plus dollars on the other.
Now, however, Big Tech is taking the process one step further by launching a subterranean counterattack on the little guys -- claiming to be the real victim here.
For years now, Big Tech has been promoting the myth of "patent trolls." This army of creatures of courtroom legend supposedly files bogus patent infringement lawsuits by the truckload in order to grab "please go away" cash settlements from the tech giants. Now, the latter have added the new wrinkle of claiming that the United States is facing a crisis of "bad patents" -- in other words, that the U.S. Patent and Trademark Office (USPTO) has been failing on a mass scale by issuing patents that are too vague, too conventional, or so poorly written that it's impossible to know what invention or technology the patent encompasses.
Time and time again, when tech giants get called out for stealing intellectual property, they've made the same argument: they can't have committed theft because the smaller firms' patents were invalid in the first place.
"The claims of the Patent-in-Suit are invalid and unenforceable," pronounced Google in a recent lawsuit with smaller firm VideoShare LLC over video-streaming technology. Google huffed that VideoShare's patent was too abstract and "lacked novelty." Fortunately, the jury saw through the ruse, and the court ordered Google to pay $26 million for its infringement.
Likewise, when startup cybersecurity firm Centripetal accused Cisco of patent infringement, Cisco retaliated by trying to invalidate Centripetal's patents through a review process within the USPTO. In the end, though, a federal court in 2020 sided with Centripetal, ordering Cisco to pay nearly $2 billion in damages for infringement.
Now comes the High Tech Inventors Alliance -- an advocacy group formed to promote a "balanced patent system" by Google, Amazon, Cisco, and the like -- to allege that over a quarter of all patents granted in the United States are invalid.
If true, that would be shocking -- a damning indictment of the USPTO and its work. But a "balanced patent system" in this case means one in which Big Tech can help itself with impunity to the discoveries represented by 25 percent of all patents -- because if they are indeed invalid, there's nothing to infringe upon.
In fact, this claim is every bit as bogus and self-serving as the proposition that Big Tech is beset by patent trolls. As it turns out, the figure derives from a single, decade-old study that examined just 980 patents issued from 2000 to 2010. To put that in perspective, the PTO granted about 2 million patents in that period.
The truth is that, after many years of consistent and effective efforts to improve examination practices and tools at the USPTO, poor quality applications rarely get through the system. And 25% of U.S. patents certainly are not “bad." Indeed, the United States is quite judicious in issuing patents. A 2019 study from the World Intellectual Property Organization found that USPTO grants patents in fewer than 35% of applications processed, one of the smallest percentages of leading patent offices worldwide.
In addition, the number of patent lawsuits and legal disputes in the United States has remained steady for decades. If a "patent crisis" did in fact exist, there would likely be far more than just two disputes per 1,000 patents issued -- a rate that has not budged in this country for nearly a century.
Ironically, our largest and most aggressive competitors don’t think the U.S. is awash with “bad” patents. Indeed, the Office of the U.S. Trade Representative continues to estimate that China is responsible for between $200-$600 billion in theft of American IP every year.
If Big Tech succeeds in its continued efforts to weaken intellectual property protection, the consequences will be dire, encouraging foreign theft and jeopardizing America's global economic standing.
Our policymakers shouldn't fall for Big Tech's "patent crisis" hoax. There's too much at stake.
Chris Israel is the executive director of the U.S. Alliance of Startups and Inventors for Jobs and a former U.S. Intellectual Property Enforcement Coordinator.
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