Judicial Litigation Reforms Make Comprehensive Patent Legislation Unnecessary as Well as Counterproductive

Michel, Hon. Paul R. | January 1, 2016

The patent system provides the necessary incentives for continuing investments in invention, fostering economic growth, creating new jobs and increasing America’s competitiveness in the global marketplace. In fact, innovation is now our only competitive advantage. Intellectual property, particularly patents, now constitutes nearly 80% of the value of most corporations. But the innovation eco-system is under heavy stress due to five converging hurricane-force winds, all intersecting in just the last two or so years: the impact of the new reviews authorized by the America Invents Act, invalidating most challenged patents; six landmark Supreme court decisions, particularly three casting doubt over the validity of countless patents that may now be deemed ineligible to even have been considered for patentability; the Judiciary’s changes last December in the Rules of Civil Procedure on pleadings and discovery; vigorous case management procedures in local patent rules and individual judge’s standing Orders; and the Patent Pilot program for volunteer judges to specialize in patent cases. Although the system is struggling to adjust and recover, investment incentives, patent values, patent licensing and patent sales are all down. Can company stock values be far behind? Will growth stagnate? Nevertheless, Congress, concerned about abuses by some irresponsible patent owners known as “trolls”, threatens to impose a series of new restrictions on the enforcement of all patents, no matter how clearly valid and infringed. They would make defending patent rights still more expensive, more difficult, more disruptive, slower, and less certain. If enacted, these bills would further impair an already weakened patent system, further depressing investments and “progress in science and the useful arts”, which the Constitution mandates Congress to support with the patent system. Small businesses, start-ups, universities, research institutes, hospitals and individual inventors would be hardest hit. Yet, these very institutions create most new jobs and most new technologies. But their interests and those of 99% of the companies in America go largely unheard in a Congress besieged by a few dozen very large, very rich and very angry companies, mostly Silicon Valley mega IT companies, demanding relief from patent suits. How did this tragedy happen and what you can do about it is the subject of this address.