Cruel of Law

An important feature of the rule of law is the economic support imparted by its predictability, a growth-supporting quality enabling the economically necessary use of contracts, deeds, debt, trusts, currency and licensing. Without it, long range planning and investment are impossible, variously timed delivery differences would cancel trades, and mutually beneficial transactions would necessarily be crammed into the immediate present. The absence of a predictable rule of law thus severely hamstrings economic progress. Patent law depends heavily on its special rule of law. It is expressly created in our Constitution to authorize Congress to provide future investment reliability for a “limited times.” What does limited mean? It doesn’t say how much time but it certainly means some. But if AIA’s IPR can nullify a patent throughout its term all the way to expiry, metaphysically there is no “limited” time. If laws and court decisions continue to nullify effective patents retroactively, the express constitutional provision for prospectively “limited times” is distorted. If patent rights are property rights instead of public privileges, Article I agency-appointed PTAB tribunals cannot be constitutionally enabled to cancel them without reference to the protections in Article III and the Bill of Rights.

A wise man once warned me that standing by themselves, arrogance or ignorance was to be pitied, not condemned but combined in positions of power, they are extremely dangerous. So it is with patents. Our nation’s patent system finds itself caught between apathetic ignorance and under-informed assertiveness. On the one hand, there is the proud apathy of congressional ignorance that resulted in AIA’s PTAB. On the other, there is the under-informed assertiveness of SCOTUS that still uses the term “patent monopoly” in Impression Products v. Lexmark while erasing decades of established patent law by retroactively altering the impact of conditional sales that conformed to existing law when made. Such retroactive conduct scorns patents’ special “limited time” rule of law, by enacting retroactive nullifications unforeseeable during past compliance by legal practitioners as well as practitioners of grant patents. Retroactive patent nullification decisions have become commonplace in the courts and Congress. From AIA’s IPR to Lexmark’s recent nullifications of then complying conditional sales, such conduct not only cancels past established economic process, but it also deters future investment of innovative time and developmental financial support in our nation’s innovation ecosystem. It harms our economic future. The on-going self-inflicted collapse of the patents’ rule of law has become a counter-productive “cruel of law.” Worse, stopping this relentless DC march to economic madness may itself be madness. Can we halt them? Continue reading Cruel of Law

Amazon’s Groceries, Mega-Cap Convergence and IPR

C’mon man! Amazon has metastasized into groceries! Here’s what’s happening: the Mega-caps are converging.

Your Google IoT control device realizes you have just closed Windows on your Mac. After checking with your fridge, she tells your Apple watch to order-out a home-delivered meal for a pre-planned dinner with a Facebook friend you mutually calendared in Microsoft’s cloud to coincide with his visit to your area. Ranked lists of meals you each have “liked” on Facebook are separately crossed-checked in Microsoft’s cloud are sent to each other’s devices. When the excellent match is found, it orders both your meals from Amazon, prepays with Apple Pay, and schedules delivery to your door by a drone one hour after your friend arrives in his self-driving Google car. During dinner, your IoT devices are busy receiving Amazon and Apple offers for discounts on a movie to be aired during the next 5 hours. Meanwhile, Google offers your friend a self-driving automobile pick-up ten minutes after dessert. You get the idea. You can sense the future of our world is just over the horizon. The mega-caps will one day control the entire consumer landscape. Their anti-patent onslaught is a symptom.

Alphabet, Amazon, Apple, Facebook and Microsoft are now America’s five largest firms by market cap. Their market power is already overpowering. Their incumbency is threatened only by each other. Their combined profit last year was $93 bn. While they were controlling Congress during the last decade, they swallowed whole 519 smaller firms. They undoubtedly smothered countless others by efficiently infringing their patented IP or by attrition if any dared to sue. Working with SCOTUS and Congress as allies they are preserving market monopsony by crushing or absorbing disruptive technology and pushing patent reform to beef up profits by beating down product component costs. But their DC alliance is uneasy. They are swirling into the converging vortex of multiple diverse product control within the marketplace. When they meet, some cannot survive. Thus, each must soon decide when and how to kill or capture the others while today’s business-friendly administration is in power.

Meanwhile as reported in today’s WSJ “Once-Flush Startups Struggle to Stay Alive.” Venture capital for US startups has declined by 30 % in 2016. In the two preceding years, 5000 U S tech startup firms raised about $75 bn., with 294 of them obtaining at least $50 mil. But since three-fourths of those have neither been acquired nor raised and capital.

These investment facts that matter. They tell us IPR is harming early stage investment. They are neither “patent/troll” narratives conjured to stampede an under-informed Congress nor are they AMICI blather intended to mislead SCOTUS into worrying about patent trolls instead of their political and market power. What matters is the growing scarcity if capital for disruptive early stage innovation for those who need it most. Only so-called “unicorns ” can afford to risk a fight with the reigning five. Time is running out. Director Lee’s recently announced review of IPR “records” and PTO’s dialogue with IPR “users” in her misdirected search for IPR “fairness etc.” will not reveal this reality. Investment trends are real, and they are relevant to patent policy. PTAB’s contribution to our economy is not worth its cost. Congress should declare IPR’s victory over “bad patents” and repeal it.

Our Patent System Needs More Than An IPR Fix

Under Secretary of Commerce, Michelle Lee has begun an initiative to further shape and improve PTAB  Her Senior Advisor at the PTO will be “coordinating this effort.  Because her tenure is ending soon her post grant “effort’s” timing has caused some to wonder whether she plans to fix AIA’s second windows or to preserve them. Whatever her unspoken motives, if any, an official in-depth review of PTAB’s past performance is warranted. But is the PTO looking in the right places?

Continue reading Our Patent System Needs More Than An IPR Fix

O’Shaughnessy Bayh-Dole Presentation

LES President and Chair Brian O’Shaughnessy batted “clean-up” in this month’s Bayh-Dole Hill presentation. Brian elegantly outlined Bayh-Dole’s market-based commercialization dynamic while he deftly refuted open-source clamor for “patent commons” treatment of federally-funded basic research. Continue reading O’Shaughnessy Bayh-Dole Presentation

Efficient Infringer Lying Previewed the Post Truth Era

The Oxford Dictionary’s Word of the Year 2016 is “post-truth” an adjective defined as, “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief.“

When lying without being shunned by society becomes generally acceptable, lying becomes institutionalized. Truth as a basic norm of societal conduct is supplanted by power which is validated by winning.  Designed to reflect society as a whole, Capitol Hill policy-making is about to be flooded with “post truth politics and politicians”. Gene Quinn’s post today features some of the efficient infringement lobby’s past blurred if not brutalized “facts” used in the past to to push their patent litigation reform. Patent litigation reform lobbying was an early congressional invasion of post-truth-politics. It was a preview of the very dangerous future. Here are added reasons why it worked so well, so early, and why it will intensify.  Continue reading Efficient Infringer Lying Previewed the Post Truth Era

The Unsung Job Creator: Intellectual Property

Good short piece on IP economic importance.

Excerpts :

  • “IP plays a crucial role in virtually every American industry. Earlier this year, the Department of Commerce reported that IP-intensive industries support over 45 million U.S. jobs—30% of the nation’s total—and contribute more than $6 trillion—or 38.2%—of United States GDP. The biopharmaceutical industry employed almost 854,000 Americans in 2014.”
  • “If we fail to protect IP rights, both domestically and abroad, we risk jeopardizing one of our greatest drivers of economic growth and competitiveness…”

Continue reading The Unsung Job Creator: Intellectual Property

Canada’s Promise Doctrine Survey and U.S. IPR

It is common knowledge in patent policy circles that China is strengthening its IP standards while we weaken ours. Weakened standards corrode certainty within an innovation ecosystem, discouraging commercialization’s private sector development investment, especially during discoveries’ high-risk early stage tech transfer. Absent such investment, promising inventions cannot become innovative reality. Continue reading Canada’s Promise Doctrine Survey and U.S. IPR

Troll Meme Responds To Efficient Infringement

Efficient infringement abuse of valid patents clearly warrants front page coverage once exclusively afforded to PR-created patent trolls. Today’s WSJ shows that infringer lobby PR flaks will not gently shift their distracting emphasis on patent trolls. WSJ’s Ruth Simon, whose decade-long congressional coverage of patent reform is thorough, but consistently reflects the anti-patent lobby’s spin, reveals that her carefully-cultivated anti patent source relationships are still alive and well. Continue reading Troll Meme Responds To Efficient Infringement