By James Edwards
November 30, 2016 at 5:00 am ET
For a country with a momentous beginning, whose intellectual-property-rights approach produced the most iconic inventors and inventions in the world, recent changes to America’s patent system should be alarming.
Mark Twain wrote, “[A] country without a patent office and good patent laws was just a crab and couldn’t travel any way but sideways or backwards.”
America made writing “good patent laws” that secure intellectual property rights a high priority. The Founders enumerated the Patent Clause in Article I, Section 8 of our Constitution — the only individual right named in the Constitution itself.
The Founders moved quickly to implement this property right. The Patent Act of 1790 was the third law enacted by the first Congress.
What did the Founders regard as “good patent law?” Deeding newly created property to its creator. One that democratized the property right to one’s inventions. The 1790 law achieved this by awarding a patent to the “first and true inventor.”
But lately, Congress, the courts and the administrative branch have diverted America toward the way of the crab. Our own government has whittled away at our patent system, degraded patent rights, devalued patents and IP and diminished inherent property rights.
What would inventors like Thomas Edison, the Wright Brothers and Alexander Graham Bell think about this new direction? Or Founders such as James Madison?
In recent years, Congress has shifted patent terms to 20 years from when a patent is applied for, though the average patent application pendency is 36 months — far longer for sophisticated inventions.
Congress changed the law to require virtually all patent applications to be published 18 months after filing, even if no patent has issued. That’s a problem because it gives IP thieves a head start by providing them an invention’s blueprints early. If a patent doesn’t issue, disclosure makes the invention “prior art” and unpatentable.
Congress enacted the antiproperty-rights “America Invents Act.” AIA denies inventors de novo judicial review if the patent office invalidates a patent. AIA also lets patent infringers off the hook if they used someone’s patented invention for a year before a patent was filed. It seriously disrupts the one-year grace period, when inventors could discuss their ideas with investors and partners, improve their details and make a stronger patent application.
The AIA allows third parties to anonymously submit “prior art” while a patent application is being considered. Use of an invention anywhere in the world now makes an invention subject to being invalidated here.
AIA changed from a first-to-invent to a first-to-file basis for winning the patent. This runs counter to the American principle of a property right to one’s ideas.
AIA also put the post-grant challenge process, started in 1999, on steroids. Now anyone, with or without standing, may ask the Patent Trial and Appeal Board to invalidate an issued patent, with a low burden of proof. Infringers, hedge fund sharks or anyone can bring patent holders into double-jeopardy-like patent reexamination in this quasi-judicial administrative setting. Judge Randal Rader has called the PTAB a “patent death squad” because it revokes patents 80 percent of the time.
Courts are making it harder to secure a patent, in rulings like KSR v. Teleflex, Bilski v. Kappos and Mayo v. Prometheus. Judicial rulings have also raised the bar for patent owners to win infringement, in such cases as Global-Tech Appliances v. SEB, Abbott Labs v. Sandoz and Quanta Computer v. LG.
Even if an inventor gets a patent, then proves someone is infringing the patent, courts have put permanent injunction against infringers out of reach under eBay v. MercExchange. A patent is supposed to ensure exclusive rights, but if you can’t stop infringers from making, using or selling your invention even when you’ve proven IP theft, where is the private property right to exclusivity?
Agencies like the Federal Trade Commission, myopically fixated on antitrust and unproven theories of patent litigation abuse, miss the core constitutional goal of patents, namely to vest in individual inventors enforceable property rights, which include the right to sell or license that intellectual property. The FTC’s recent “study” of certain patent assertion entities, or PAEs, paints with such a broad brush; it sheds little light on this area of patent litigation.
The FTC lacks sufficient data to draw conclusions, especially with an unrepresentative sample of 22 firms and no data on the potentially abusive practices of large infringers. Making sweeping policy recommendations on such a thin foundation only picks sides in a manner that hurts inventors who have no interest in setting up manufacturing plants and threatens property rights, including the right to buy or license IP.
Meanwhile, countries like China, South Korea and Taiwan take advantage of the FTC’s and U.S. Justice Department’s efforts to weaken the rights and remedies of American patent owners.
These foreign governments enable their countries’ businesses’ theft of U.S. IP. How? By depriving American firms of due process, equating exclusive patent rights with “anticompetitiveness,” and running judicial proceedings based on predetermined outcomes favoring domestic players, rather than the rule of law.
In Federalist 43, Madison explained that the right to inventions belongs to their inventors, and “the claims of individuals” to their IP rights “fully [coincide]” with the “public good.” The exclusive property right benefits society while inventors enjoy the fruits of their creativity. It worked exceptionally well for about 200 years.
But today, our property rights-centered patent regime is shifting. These changes to America’s once-world-class patent system must be reversed and our course righted if we are to continue as the world leader in invention and creation of new wealth.
James Edwards, a consultant on intellectual property, is patent policy adviser to Eagle Forum. The views expressed here are his own.
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