ANALYSIS/OPINION:
When Americans hear the phrase “America first,” it’s a safe bet they don’t think of being in 12th place - in anything, but especially not in an area as vital to our American identity as innovation. And yet, 12th place in patent protection is precisely where the United States finds itself today, according to the Chamber of Commerce’s global intellectual property rankings.
Americans are well acquainted with our nation’s innovative history and our rise to become the world’s leader in inventions across a broad spectrum of industries. Less known, however, is the story of the United States’ recent decline in the important sphere of intellectual property rights protection. Over the past decade, and in the past few years in particular, the United States has fallen from first place in the world to an embarrassing 12th place for protecting patent rights.
Since our nation’s founding, a strong patent system that has treated intellectual property with the same respect as physical property has propelled innovation. Our founding fathers even included intellectual property rights in the Constitution (see Article I, Sec. 8, Clause 8) for the purpose of “promot[ing] the progress of science and useful arts.” The founders correctly understood the relationship between the individual’s exclusive (and exclusionary) right to a patent and the collective benefit felt throughout society as inventors and artists would be uniquely incentivized to invent, produce, and create.
Despite the clear language of the U.S. Constitution, and without regard for our history of upholding patent rights, Congress and the courts have recently taken actions that erode patent protections, creating an uncertain - and even unfavorable - environment for inventors.
The greatest threat to our nation’s patent system is the “America Invents Act,” which was signed into law in September 2011. The law created the Patent Trial and Appeal Board (PTAB), a new executive branch tribunal at the Patent and Trade Office tasked with reviewing the validity of patents.
An unaccountable expansion of the federal bureaucracy, the PTAB exhibits many of the familiar aspects of Big Government that conservatives dislike - and for good reason. Since its creation, the PTAB has institutionalized a culture that rewards patent infringements. While the authors of the America Invents Act had envisioned that the PTAB would provide a speedier and cheaper alternative to district court proceedings for patent litigation, in practice, the PTAB has operated as a “patent death squad” (as one federal judge called it), invalidating a large percentage of the patents it reviews.
One of the perverse consequences of the PTAB is that it has institutionalized patent infringing. The inter partes review, in which the PTAB re-examines existing patents at the request of would-be patent infringers, is inherently flawed in the lopsided way it favors the patent challengers. The patent-holder is susceptible to repeated patent reviews throughout the life of the patent.
In addition to the harm created by the PTAB, the Supreme Court over the past several years has also played a role in degrading patent protections. In the last fifteen years, more than a dozen U.S. Supreme Court rulings have had the effect of weakening patent protections. The outcome of one notorious case, eBay vs. MercExchange LLC, has made it nearly impossible for patent-holders to obtain injunctive relief from the unlawful use of their patent-protected products or ideas. The 2006 eBay ruling represents a dramatic change in patent law in the United States, and the ruling has had the effect of diminishing a patent’s defining benefit: the right to exclude others from using it.
In response to the declining health of the American patent system, two U.S. representatives have introduced the STRONGER Patents Act. Congressmen Steve Stivers, a Republican from Ohio, and Bill Foster, a Democrat from Illinois, have introduced H.R. 5340 in an effort to reverse many of the America Invents Act’s attacks on the patent system.
The STRONGER Patents Act, like the Senate version introduced by Sen. Tom Cotton, Arkansas Republican, and Sen. Chris Coons, Delaware Democrat, aims to improve the PTAB proceedings to level the playing field between patent challengers and patent-holders to ensure that would-be patent infringers are not unfairly advantaged in their attempts to invalidate patents. The bill would also place reasonable limits on patent challengers, so they are not able to attack patents repeatedly and from every angle.
The STRONGER Patents Act would also reduce the current incentives for would-be infringers to design products that use someone else’s patented ideas and then escape punishment by outsourcing the assembly process to other parties - often overseas. Furthermore, the STRONGER Patents bill restores the ability of patent holders to obtain injunctions against those who steal their ideas and would allow them to seek damages from companies that induce others to manufacture infringing products.
A culture that values robust innovation - the kind the United States has always valued - necessitates a strong patent system with strong patent protections. The STRONGER Patent Act is a much-needed step in the right direction of reclaiming our role as the world’s innovation leader.
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