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Lawmakers’ Light Shed on PTAB

Twin hearings in the U.S. Senate and House Intellectual Property Subcommittees recently drew insightful, important questions and thoughts from several conservative lawmakers and others who respect rights to one’s intellectual property. (Conservatives for Property Rights provided the subcommittees input.)

The Senate hearing was tilted to prop up legislation by Sens. Pat Leahy, John Cornyn and Thom Tillis. The renamed “PTAB Reform Act” would further weaponize the Patent Trial and Appeal Board for frequent users from Big Tech and Chinese national champions to easily invalidate issued patents.

The House hearing was definitely no sham front for Infringers Lobby legislation. The House hearing focused on the facts and substance of PTAB’s effects on small businesses. It presented a breadth of witnesses and perspectives on PTAB’s first decade’s performance.

Sen. Ted Cruz reminded the Senate hearing of the fundamental constitutional grounds for IP. “Our Founders included in the United States Constitution the protection [of] not just property rights, but also specifically of intellectual property rights. Article One, Section Eight makes clear Congress's duty to ensure the exclusive right of inventors.”

Sen. Cruz contrasted our Constitution’s provision for securing exclusive IP rights with PTAB’s demolition of IP rights. “I have some concerns when those rights which often amount to a person's livelihood can be stripped away by unaccountable bureaucrats not elected or appointed by the president nor confirmed by Congress.”

PTAB, established by the Leahy-Smith America Invents Act, quickly became a favored weapon of patent infringers. “. . . PTAB became a very friendly forum for Google and other Big Tech firms to challenge the rights of inventors,” Sen. Cruz said.

Sen. Marsha Blackburn focused on large-entity patent infringers running to PTAB to escape accountability. “Over the last several years, a lot of our innovators in Tennessee . . . [have seen] Big Tech companies end up coming at them on patent infringement. And how can we ensure that PTAB is not enabling the larger tech companies to steal patents from small businesses and innovators?”

An inventor and entrepreneur before entering Congress, Rep. Thomas Massie pointed out that “all the people who[‘ve] complained to me about PTAB are small inventors. The Big Tech folks aren't the ones complaining.” He called into question the stated intent for PTAB: “. . . if the PTAB is faster, cheaper and accurate at resolving disputes, why are inventors opposed to it?”

PTAB has made things worse for patent owners. “For example, in 2020 PTAB found 84 percent of the patents it fully reviewed to be invalid,” Sen Cruz said. “And many patent owners that successfully defend their patents against Big Tech in district court are immediately dragged before PTAB, where they have to defend it.”

The Leahy bill runs counter to Sen. Chris Coons’ STRONGER Patents Act’s proposed PTAB reforms. “. . . I’m concerned that eliminating the PTO’s [Patent and Trademark Office’s] ability to consider co-pending litigation in deciding whether to institute [patent validity challenge proceedings] is a step in the wrong direction,” Sen. Coons said. “Because I think hardwiring parallel proceedings into the AIA increases costs by encouraging duplicative proceedings. And in my view that doesn't benefit the public or the patent system. So any statutory provision to address serial petitions also has to adequately protect, versus repeated attacks, potentially valid patents.”

PTAB’s effect of driving investors away from startups commercializing valuable patented inventions emerged in the House hearing. Rep. Massie, sponsor of a bill that among other things would eliminate PTAB, asked the head of medical device incubator ExploraMed, “Would private capital, angel investors, venture capitalists, would they be more likely to invest in new technologies and ideas if PTAB did not exist?” The answer was yes.

By PTAB’s making it easy to quash valuable patents, it also risks U.S. national security. “China has also found PTAB is a useful tool towards invalidating American patents,” Sen. Cruz noted. “Chinese companies, such as ZTE and Huawei, are prolific petitioners at PTAB.”

Rep. Massie pursued a similar vein. “The U.S. military relies on secure communications, technology, equipment, satellites, networks, and do you think that it's possible that PTAB has contributed to lack of development of that here domestically or that possibly China is taking advantage of the fact that we have a weakening patent system due to PTAB, that we don't have enough investment in things that could provide more national security?” Witnesses agreed.

Rep. Massie, owner of 30 patents, pretty well summed up the PTAB quagmire: “[F]orgive me if I'm a little leery of this theory that the PTAB was set up and established and has succeeded in helping small companies and small inventors.”

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