Thousands Tell The Patent Office: Don’t Hide Bad Patents From Review

Patents

from the stop-patent-trolls dept

We filed our own comment with the USPTO regarding their attempt to weaken the important inter partes review (IPR) process that has been hugely helpful in getting rid of bad patents. Over at EFF, Joe Mullin wrote up an analysis of some of the comments to the USPTO, which we’re running here as well.

A massive wave of public comments just told the U.S. Patent and Trademark Office (USPTO): don’t shut the public out of patent review.

EFF submitted its own formal comment opposing the USPTO’s proposed rules, and more than 4,000 supporters added their voices—an extraordinary response for a technical, fast-moving rulemaking. We comprised more than one-third of the 11,442 comments submitted. The message is unmistakable: the public wants a meaningful way to challenge bad patents, and the USPTO should not take that away.

The Public Doesn’t Want To Bury Patent Challenges

These thousands of submissions do more than express frustration. They demonstrate overwhelming public interest in preserving inter partes review (IPR), and undermine any broad claim that the USPTO’s proposal reflects public sentiment. 

Comments opposing the rulemaking include many small business owners who have been wrongly accused of patent infringement, by both patent trolls and patent-abusing competitors. They also include computer science experts, law professors, and everyday technology users who are simply tired of patent extortion—abusive assertions of low-quality patents—and the harm it inflicts on their work, their lives, and the broader U.S. economy. 

The USPTO exists to serve the public. The volume and clarity of this response make that expectation impossible to ignore.

EFF’s Comment To USPTO

In our filing, we explained that the proposed rules would make it significantly harder for the public to challenge weak patents. That undercuts the very purpose of IPR. The proposed rules would pressure defendants to give up core legal defenses, allow early or incomplete decisions to block all future challenges, and create new opportunities for patent owners to game timing and shut down PTAB review entirely.

Congress created IPR to allow the Patent Office to correct its own mistakes in a fair, fast, expert forum. These changes would take the system backward. 

A Broad Coalition Supports IPR

A wide range of groups told the USPTO the same thing: don’t cut off access to IPR.

Open Source and Developer Communities 

The Linux Foundation submitted comments and warned that the proposed rules “would effectively remove IPRs as a viable mechanism for challenges to patent validity,” harming open-source developers and the users that rely on them. Github wrote that the USPTO proposal would increase “litigation risk and costs for developers, startups, and open source projects.” And dozens of individual software developers described how bad patents have burdened their work. 

Patent Law Scholars

A group of 22 patent law professors from universities across the country said the proposed rule changes “would violate the law, increase the cost of innovation, and harm the quality of patents.” 

Patient Advocates

Patients for Affordable Drugs warned in their filing that IPR is critical for invalidating wrongly granted pharmaceutical patents. When such patents are invalidated, studies have shown “cardiovascular medications have fallen 97% in price, cancer drugs dropping 80-98%, and treatments for opioid addiction becom[e] 50% more affordable.” In addition, “these cases involved patents that had evaded meaningful scrutiny in district court.” 

Small Businesses 

Hundreds of small businesses weighed in with a consistent message: these proposed rules would hit them hardest. Owners and engineers described being targeted with vague or overbroad patents they cannot afford to litigate in court, explaining that IPR is often the only realistic way for a small firm to defend itself. The proposed rules would leave them with an impossible choice—pay a patent troll, or spend money they don’t have fighting in federal court. 

What Happens Next

The USPTO now has thousands of comments to review. It should listen. Public participation must be more than a box-checking exercise. It is central to how administrative rulemaking is supposed to work.

Congress created IPR so the public could help correct bad patents without spending millions of dollars in federal court. People across technical, academic, and patient-advocacy communities just reminded the agency why that matters. 

We hope the USPTO reconsiders these proposed rules. Whatever happens, EFF will remain engaged and continue fighting to preserve  the public’s ability to challenge bad patents. 

Republished from the EFF’s Deeplinks blog.

Filed Under: ipr, patent trolls, patents, uspto

Our Founders Would Abhor What The USPTO Is Doing With The Patent System

Patents

from the make-patent-trolls-great-again? dept

Last week I wrote about how the US Patent and Trademark Office is pushing a rule change that would effectively neuter the inter partes review (IPR) system that reviews already granted patents to make sure they weren’t granted by mistake. Patent tolls and other abusers of the patent system have been screaming about this system ever since it started actually helping stop the flood of patent trolling over the last decade and a half. They’ve now convinced the USPTO to change the rules without congressional approval.

The comment period for the USPTO to consider this change closes today, so I wanted to share the comment that I submitted to the proceedings (the full PDF has footnotes, which I’m not bothering to repost here):

The Copia Institute is the think tank arm of Floor64, Inc., the privately-held California small business behind Techdirt.com. As a think tank the Copia Institute produces evidence-driven articles and papers as well as other forms of expressive output such as podcasts and games that examine the nuances and assumptions underpinning technology policy. Armed with its insights it then regularly submits advocacy instruments such as amicus briefs and regulatory comments, such as this one.

We write to oppose the US Patent & Trademark Office’s proposed rule changes for inter partes review (IPR) found in Docket No. PTO-P-2025-0025. We oppose the rule changes for three broad reasons:

1. The policy change would directly oppose the reason and intent of the patent system, doing real damage to American innovation.
2. The current IPR system, though imperfect, has been a tremendously helpful tool in stopping poor quality patents from limiting innovation.
3. Such changes should only be directed by Congress, not the agency

The US Patent System must guard against abuse

Both James Madison and Thomas Jefferson spoke out frequently against the very idea of monopolies, including patents. And when it came time to draft the intellectual property clause of the Constitution, there was a discussion between the two founders. Jefferson apparently worried about Madison’s decision to include patent monopolies in the Constitution, writing to him in 1788:

[I]t is better to … abolish … Monopolies, in all cases, than not to do it in any …. The saying there shall be no monopolies lessens the incitements to ingenuity, which is spurred on by the hope of a monopoly for a limited time, as of 14 years; but the benefit even of limited monopolies is too doubtful to be opposed to that of their general suppression.

Madison responded, agreeing that such things are “among the greatest nuisances in government,” but convinced Jefferson that they should not be “wholly renounced” so long as they were very limited and had safety valves to protect against their abuse.

The IPR system is just such a safety valve, allowing anyone to make sure that patents that have been granted truly deserve to be. Years later, Madison summed up his thoughts on patents by saying:

Monopolies though in certain cases useful ought to be granted with caution, and guarded with strictness against abuse.

Once again, the IPR system is just such a system that helps guard against abuse.

As both Jefferson and Madison recognized, government-granted monopolies are prone to abuse without strict systems to guard against abuse. As the US learned in the late 90s and early 2000s, our patent system was being widely abused by non-practicing entities, often single lawyers who would buy up useless, overly broad patents that never should have been granted, and demanding large sums of money from companies who were actually innovating, and actually building successful products.

Congress recognized this problem and how the system of government granted monopolies must be “guarded with strictness against abuse” and created the current IPR system with the America Invents Act in 2011, creating the IPR process.

The concept is simple and straightforward. Patent examiners are already overworked, and there is evidence that mistakenly granted patents make it through our system. No system is perfect. So to make sure that patents are valid, Congress, in its wisdom created a process that enabled those who came across an improperly granted patent to challenge it, and a process to review that patent to make sure it should have been granted.

If the patents are valid, then the IPR process reinforces that, strengthening the quality of the patent. If the patent is invalid, then the IPR process does what Madison believed necessary: strictly guarding the system against abuse.

The system has worked

Over and over again, the IPR system has successfully guarded American innovators against the abuse of government granted monopolies. Over and over again, patents that were mistakenly granted, which Jefferson and Madison warned would limit innovation, have been successfully challenged, and invalidated, protecting actual innovators from having their work halted by a lawyer holding a bad patent.

A bad patent that was used to claim that all podcasting was infringing was thankfully invalidated via the IPR process. Prior to that, many of the top podcasters were sued or threatened, and some even considered stopping their podcasts. Today, we’ve seen that podcasts are an essential part of our media ecosystem. They were not actually invented by the patent holder. Indeed, prior art was found that showed the claims in the patent (which was about audio cassettes, not podcasting) was predated in practice by others.

That patent never should have been granted, and actual innovators in the podcasting space were spared thanks to the IPR process.

And this is not a rare result. In the first decade, patents reviewed by the PTAB using IPR resulted in approximately 40% of the patents challenged being ruled invalid. In other words, when the USPTO had a chance to look closely at those patents, and related prior art, in many cases, they realized that the patent never should have been granted in the first place, and then corrected that mistake.

The IPR process works. It fulfills the important function that Madison insisted any patent system needed: to zealously guard against abuse of those monopoly grants.

Only Congress can change the system

Finally, it is important to note that this move by the Patent Office exceeds its authority. Just last year the Supreme Court made clear in Loper Bright v. Raimondo that agencies cannot reinterpret statutes to reach outcomes Congress did not authorize. The America Invents Act created IPR with specific parameters. The proposed rules would fundamentally alter that system—limiting when IPR can be used, forcing petitioners to forfeit other legal rights, and making patents effectively unchallengeable after a single review—changes that go far beyond the USPTO’s role in implementing the statute Congress actually passed.

If the USPTO believes the IPR system needs this kind of overhaul, the proper path is to ask Congress to amend the law. There have been multiple bills proposed in Congress to restrict IPR, and none has passed. Congress has repeatedly declined to make these changes through legislation. The USPTO cannot accomplish through rulemaking what Congress has refused to do through law.

This alone should end the discussion. The agency is attempting to rewrite a statutory framework that Congress deliberately chose not to change, despite years of lobbying pressure to do so. That is precisely the kind of administrative overreach that Loper Bright was meant to prevent.

Both Thomas Jefferson and James Madison worried about a patent system that would be subject to abuses. Madison felt that the system must be guarded carefully against such abuses. After seeing the harm those abuses created, Congress wisely established the IPR process, which has worked well for over a decade.

It would be a massive mistake to reject that, and return us to a world in which the IPR process was limited, and abuse of the patent system against actual innovators was rampant.

Please reject this proposed rule change in order to protect innovation.

Filed Under: inter partes review, ipr, patent trolls, patents, uspto

Secret Third-Party Litigation Funding Threatens American Innovation

Patents

from the weaponizing-litigation-for-fun-and-for-profit dept

Imagine a leading American technology firm, the engine of thousands of jobs and critical innovation, besieged by a patent lawsuit. Typical enough, but this time there is a twist: The plaintiff is a shell company with no assets and no products, yet it litigates with the inexhaustible resources of a global superpower. The American company is forced to spend millions on defense, all while fighting in the dark, unaware that the true adversary funding the assault is a sovereign wealth fund controlled by a geopolitical rival.

This is not a hypothetical scenario. It is the reality of third-party litigation funding. This secretive, multi-billion-dollar industry has turned our courtrooms into a speculative asset class. Litigation funding allows outside investors—hedge funds, private equity firms, and even foreign governments—to secretly purchase a financial stake in a lawsuit in exchange for a portion of any award or settlement. The current lack of mandatory disclosure for these arrangements in U.S. federal courts has created a dangerous blind spot. It allows foreign adversaries to weaponize our own justice system against us, posing a direct threat to American technological leadership and national security. Principled, targeted transparency is not merely a procedural nicety; it is a national imperative.

Growth of a Shadow Industry

The litigation funding market has grown exponentially, from a niche practice to an industry with major funders managing over $15 billion in U.S. litigation assets. This rise in speculative capital fundamentally alters the dynamics of justice. With no uniform federal rule requiring disclosure, the decision to unmask a funder is left to the discretion of individual judges, creating an inconsistent and easily exploited patchwork of local rules.

This secrecy infects the legal process. Settlement negotiations, traditionally a two-party affair, are distorted by the presence of a hidden, typically profit-motivated stakeholder whose sole objective is maximizing return on investment. Many litigation funding contracts contain “waterfall” clauses that require the funder to be repaid its investment, often with a multiple of two or three times, before the plaintiff receives a single dollar. This structure creates a powerful incentive to reject reasonable settlement offers that would satisfy the actual parties but fail to meet the funder’s high-return threshold. The case of food distributor Sysco, which alleged in court that its funder, Burford Capital, blocked reasonable settlements in a $140 million-plus funding deal, is a stark illustration of funders controlling litigation to protect their investment.

The discovery process, a cornerstone of American civil procedure, is similarly weaponized. When the funder is a secret competitor or a foreign state, discovery becomes a backdoor for corporate espionage. An adversary can fund a lawsuit against a U.S. tech or defense firm specifically to gain legal access to trade secrets, proprietary technology, and sensitive business plans. The defendant is left with an impossible choice: hand over confidential data to an unknown enemy or pay a nuisance settlement to make the case disappear.

This problem is particularly acute in patent litigation. The Government Accountability Office reports that most large technology companies believe over half the patent infringement suits they face are backed by third-party litigation funders, often involving weak claims. These lawsuits, frequently brought by “patent trolls”—entities that produce nothing but exist only to sue innovators—act as a tax on American ingenuity, forcing companies to divert capital from R&D to legal defense costs.

A Tool for Foreign Adversaries

The most alarming threat is the use of TPLF by foreign adversaries as a tool of asymmetric warfare. A sovereign wealth fund can finance harassing litigation to drain a U.S. competitor’s resources, damage its reputation, and stifle its innovation pipeline—achieving a strategic victory even if the lawsuit ultimately fails.

The potential for foreign interference is high. More than half of new U.S. patents granted in 2024—approximately 180,000—went to foreign companies, with China taking a large share. Thousands of those patents went to entities that are controlled by the Chinese Communist Party and do not operate within the United States. 

These foreign-owned patents empower companies controlled by or working at the behest of  foreign governments, to sue companies operating in this country. Such lawsuits, covering thousands of patents, can drain resources, distract strategy, and derail research and development for the innovative American companies targeted by the litigation, and under the current rules, the foreign countries can execute this strategy without disclosing who is funding the litigation. The United States is essentially giving foreign governments a ticket to steal U.S. trade secrets under a cloak of anonymity.

This threat is now a documented reality. A Bloomberg investigation revealed that a subsidiary of a Russian conglomerate with ties to Vladimir Putin has funded lawsuits in the U.S. while its founders were under international sanctions. In another case, only revealed due to a Delaware judge’s standing order, a Chinese litigation funder was found to be financing intellectual property lawsuits against Samsung in U.S. courts. And Fortress Investment Group, a major litigation funder now majority-owned by an Abu Dhabi sovereign wealth fund, has financed aggressive patent suits against American tech giants like Intel.

Pathways to Reform

Congress is now considering several proposals to bring this shadow industry into the light. The solutions reflect different diagnoses of the core problem. Rep. Darrell Issa’s Litigation Transparency Act (H.R. 1109) offers a straightforward, comprehensive solution: require disclosure of the funder and the funding agreement in all federal civil cases. Rep. Ben Cline’s Protecting Our Courts from Foreign Manipulation Act (H.R. 2675) is more proscriptive, requiring disclosure of foreign funders while outright banning foreign governments and sovereign wealth funds from investing in U.S. litigation. A third bill by Sen. Thom Tillis, the Tackling Predatory Litigation Funding Act (S. 1821), uses the tax code to disincentivize litigation funding by imposing a steep tax on funders’ profits, eliminating a loophole that allows some foreign investors to pay no U.S. tax on their gains.

The primary criticism of broad disclosure, embodied by the Issa bill, is that it could have a chilling effect on funding for legitimate civil rights or public interest lawsuits. Funders may be unwilling to support controversial causes if their identity is exposed to public backlash. This concern may create unusual political alliances, as both progressive and conservative groups rely on strategic litigation to advance their agendas and may fear the effects of transparency on their donors.

The political reality of these concerns was on full display during a House Judiciary Committee markup just this week. While Rep. Cline’s targeted measure to block foreign adversaries, H.R. 2675, was reported favorably, Rep. Issa’s broader transparency bill, H.R. 1109, failed to reach a vote following strong opposition from a coalition of conservative organizations. In a letter to congressional leadership, some conservative groups argued that the “sweeping disclosure mandates” in H.R. 1109 would violate donor privacy and chill free speech by exposing supporters of sensitive causes to harassment. While acknowledging the urgent need to stop foreign manipulation of the courts, these critics argued for a narrower legislative approach that protects national security without compromising the confidential associations of American citizens.

Transparency in patent litigation raises none of these concerns.  The patent is not a civil right, but a grant of a franchise, and its effects are entirely economic. The civil rights interests that surround who funds advocacy around a legislative or issue campaign are absent. On the other side of the ledger, there is no legitimate interest to protect the ability of foreign adversaries to covertly interfere in American business and innovation. Semiconductor companies should know who is behind invasive discovery requests into sensitive advanced manufacturing technology, generative AI developers should know who is attacking and dissecting the inner workings of their AI models, and retailers should know who is using weak patents to disrupt, for example, basic online sales technology like the use of online shopping carts. The stakes in such cases are focused on the parties, technology, and discovery requested—defendants have a right to know who is suing them.

An Urgent and Achievable Goal

Despite these complexities, something needs to change. Defendants have a right to know the identity of their true adversary. More urgently, the stakes of allowing foreign governments to secretly manipulate our courts are simply too high. American leadership in generative AI and advanced manufacturing can be disrupted and undermined through abusive litigation—we need to know who is behind such lawsuits. The national security threat is not speculative; it is happening now. 

We can target the most egregious threats with a bipartisan solution. An approach that focuses on transparency in high-risk commercial litigation and blocking foreign-state interference is desperately needed. The favorable committee vote on Rep. Cline’s bill is encouraging—continued support for H.R. 2675 as it moves forward is key—but the opposition to a disclosure requirement in Rep. Issa’s bill is misguided. Even if a carve-out is needed for non-profit, mission-driven litigation, we must act to secure our courts from foreign manipulation and protect the intellectual property that fuels our economy. This is not a partisan issue. Secret misuse of American courts must end.

Nathanael Andrews is Senior Associate Counsel for the Software & Information Industry Association

Filed Under: litigation finance, patent trolls, patents, transparency

USPTO Wants To Make Bad Patents Unchallengeable. You Have Until December 2nd To Tell Them No.

Patents

from the don't-let-the-trolls-win dept

The US Patent Office is about to gut the only effective tool we have for killing bad patents—and they’re doing it by administrative fiat, without Congress, in a way that would make patent trolling easier than it’s been in over a decade. They need to hear from you by Tuesday, December 2nd, or this may become reality.

Patent trolling was really holding back all sorts of innovation in the 2000s. As soon as any company started to become successful, trolls would come out of the wood work, holding terrible, vague, highly questionable patents, and demand a payoff. In 2011, Congress finally gave us the America Invents Act, which created inter partes review (IPR)—a process that lets anyone challenge a granted patent at the USPTO and ask them to review whether it should have been approved in the first place.

IPR was necessary because patent examination is fundamentally broken. It’s not adversarial, examiners have limited time and resources to investigate prior art, and applicants can keep resubmitting until someone approves their application. Patent examiners were even being dinged for taking too long reviewing patents, which created perverse incentives to just rubber-stamp applications to clear the queue. The result: a shit-ton of bad patents that never should have been granted.

The IPR process finally began to move the patent landscape back in the right direction, allowing anyone to kick off a review of a patent to see if it had been improperly granted. If it was validly granted, then the IPR process would prove that, in effect strengthening the patent. But if the patent was nonsense, then the IPR process could invalidate it. And it’s done that for a bunch of terrible patents that never should have been granted.

Patent trolls have hated IPR from day one, and they’ve fought it relentlessly. They challenged the process all the way to the Supreme Court—and they lost. Then they tried again. And they lost again. Losing twice at SCOTUS would stop most campaigns, but the troll lobby just pivoted: for years they’ve been pressuring Congress to change the law and kill IPR outright.

Having failed in court and Congress, the troll lobby is now getting the Patent Office to do their dirty work through administrative rulemaking. This started two years ago under Biden, but patent trolling is bipartisan and the Trump USPTO is pushing the same approach. They can’t eliminate IPR without Congress, so instead they’re proposing rules that would make it functionally useless.

Here’s what they want to do, and why each piece is bonkers:

First, IPR would only be available if the patent isn’t being litigated. Which means all a troll needs to do to block IPR is… file a lawsuit. You’ve just created a massive incentive for more patent troll litigation. The cheaper, faster administrative process gets shut down the moment the troll decides to sue someone—which is exactly what trolls do.

Second, if you file an IPR, you forfeit your right to challenge that patent in court later. Think about the game theory here: a troll threatens to sue you. You try to use IPR to kill the bad patent. But now, if the troll decides to sue you, you’ve permanently given up your ability to challenge the patent as part of your defense! The troll has everything to gain and nothing to lose by forcing you into this choice. Again, more incentive to sue.

Third, if anyone challenges a patent in any process and it survives, no one can ever challenge it again. Ever. New prior art surfaces five years later proving the patent is garbage? Too bad. Someone else has better evidence? Doesn’t matter. One shot, that’s it. This effectively gives bad patents a shield of invincibility after a single successful defense.

There’s a comment period open right now (it ends Tuesday, December 2nd—the form says November 17th but it’s been extended), and the USPTO needs to hear why these rules are insane.

Your comment doesn’t need to be long or use fancy legal language. Just explain why you think it’s a bad idea to create rules that give patent trolls more incentive to sue, or that force defendants to forfeit their legal rights, or that make bad patents unable to be challenged forever. As EFF points out, the important thing is that actual users and creators—not just lawyers and lobbyists—show up in the record.

EFF provides a sample comment if you want a starting point:

I oppose the USPTO’s proposed rule changes for inter partes review (IPR), Docket No. PTO-P-2025-0025. The IPR process must remain open and fair. Patent challenges should be decided on their merits, not shut out because of legal activity elsewhere. These rules would make it nearly impossible for the public to challenge bad patents, and that will harm innovation and everyday technology users.

But honestly, you can make it even more specific. Pick one of the three perverse incentives above and explain why it’s backwards. Or talk about what happened before IPR existed, when trolls were shaking down every successful startup they could find.

IPR has actually worked in killing off genuinely terrible patents, including the infamous troll who claimed a patent on podcasts. He tried to shake down all the top podcasters. Without IPR, that patent might still be out there. Or if you use a fitness tracker today, thank the IPR process. It killed off a ridiculous patent that was used by a troll to try to shake down every company in the space.

IPR works. Don’t let the PTO kill it off to appease the troll lobby.

EFF points out how important this is as well:

IPR hasn’t ended patent trolling. But when a troll waves a bogus patent at hundreds or thousands of people, IPR is one of the only tools that can actually fix the underlying problem: the patent itself. It dismantles abusive patent monopolies that never should have existed,   saving entire industries from predatory litigation. That’s exactly why patent trolls and their allies have fought so hard to shut it down. They’ve failed to dismantle IPR in court or in Congress—and now they’re counting on the USPTO’s own leadership to do it for them. 

The USPTO is doing all this without congressional approval. If they really want to rewrite IPR rules, they should ask Congress to conduct a full review and pass a law. Instead, the PTO is trying to rewrite the laws through administrative fiat, betting that no one will notice or care enough to stop them.

They’re wrong. File a comment by December 2nd. Make your voice heard.

Filed Under: inter partes review, ipr, patent trolls, patents, uspto

PERA Remains A Serious Threat To Efforts Against Bad Patents

Patents

from the bringing-back-patent-trolls dept

As all things old are new again, a bill that would make obtaining bad patents easier and harder to challenge is being considered in the Senate Judiciary Committee. The Patent Eligibility Restoration Act (PERA) would reverse over a decade of progress in fighting patent trolls and making the patent system more balanced.

PERA would overturn long-standing court decisions that have helped keep some of the most problematic patents in check. This includes the Supreme Court’s Alice v. CLS Bank decision, which bars patents on abstract ideas. While Alice has not completely solved the problems of the patent system or patent trolling, it has led to the rejection of hundreds of low-quality software patents and, as a result, has allowed innovation and small businesses to grow.

Thanks to the Alice decision, courts have invalidated a rogue’s gallery of terrible software patents—such as patents on online photo contests, online bingo, upselling, matchmaking, and scavenger hunts. These patents didn’t describe real inventions—they merely applied old ideas to general-purpose computers. But PERA would wipe out the Alice framework and replace it with vague, hollow exceptions, taking us back to an era where patent trolls and large corporate patent-holders aggressively harassed software developers and small companies.

This bill, combined with recent changes that have restricted access to the Patent Trial and Appeal Board (PTAB), would create a perfect storm—giving patent trolls and major corporations with large patent portfolios free rein to squeeze out independent inventors and small businesses.

EFF is proud to join a letter, along with Engine, the Public Interest Patent Law Institute, Public Knowledge, and R Street, to the Senate Judiciary Committee opposing this poorly-timed and concerning bill. We urge the committee to instead focus on restoring the PTAB as the accessible, efficient check on patent quality that Congress intended.

Republished from the EFF’s Deeplinks blog.

Filed Under: alice v. cls bank, bad patents, chuck grassley, dick durbin, patent eligible subject matter, patent trolls, patents, pera, software patents, uspto

New USPTO Memo Makes Fighting Patent Trolls Even Harder

Patents

from the patent-trolls-rejoice dept

The U.S. Patent and Trademark Office (USPTO) just made a move that will protect bad patents at the expense of everyone else. In a memo released February 28, the USPTO further restricted access to inter partes review, or IPR—the process Congress created to let the public challenge invalid patents without having to wage million-dollar court battles.

If left unchecked, this decision will shield bad patents from scrutiny, embolden patent trolls, and make it even easier for hedge funds and large corporations to weaponize weak patents against small businesses and developers.

IPR Exists Because the Patent Office Makes Mistakes

The USPTO grants over 300,000 patents a year, but many of them should not have been issued in the first place. Patent examiners spend, on average, around 20 hours per patent, often missing key prior art or granting patents that are overly broad or vague. That’s how bogus patents on basic ideas—like podcasting, online shopping carts, or watching ads online—have ended up in court.

Congress created IPR in 2012 to fix this problem. IPR allows anyone to challenge a patent’s validity based on prior art, and it’s done before specialized judges at the USPTO, where experts can re-evaluate whether a patent was properly granted. It’s faster, cheaper, and often fairer than fighting it out in federal court.

The USPTO is Blocking Patent Challenges—Again

Instead of defending IPR, the USPTO is working to sabotage it. The February 28 memo reinstates a rule that allows for widespread use of “discretionary denials.” That’s when the Patent Trial and Appeal Board (PTAB) refuses to hear an IPR case for procedural reasons—even if the patent is likely invalid. 

The February 28 memo reinstates widespread use of the Apple v. Fintiv rule, under which the USPTO often rejected IPR petitions whenever there’s an ongoing district court case about the same patent. This is backwards. If anything, an active lawsuit is proof that a patent’s validity needs to be reviewed—not an excuse to dodge the issue.

In 2022, former USPTO Director Kathi Vidal issued a memo making clear that the PTAB should hear patent challenges when “a petition presents compelling evidence of unpatentability,” even if there is parallel court litigation. 

That 2022 guidance essentially saved the IPR system. Once PTAB judges were told to consider all petitions that showed “compelling evidence,” the procedural denials dropped to almost nothing. This February 28 memo signals that the USPTO will once again use discretionary denials to sharply limit access to IPR—effectively making patent challenges harder across the board.  

Discretionary Denials Let Patent Trolls Rig the System

The top beneficiary of this decision will be patent trolls, shell companies formed expressly for the purpose of filing patent lawsuits. Often patent trolls seek to extract a quick settlement before a patent can be challenged. With IPR becoming increasingly unavailable, that will be easier than ever. 

Patent owners know that discretionary denials will block IPRs if they file a lawsuit first. That’s why trolls flock to specific courts, like the Western District of Texas, where judges move cases quickly and rarely rule against patent owners.

By filing lawsuits in these troll-friendly courts, patent owners can game the system—forcing companies to pay up rather than risk millions in litigation costs.

The recent USPTO memo makes this problem even worse. Instead of stopping the abuse of discretionary denials, the USPTO is doubling down—undermining one of the most effective ways businesses, developers, and consumers can fight back against bad patents.

Congress Created IPR to Protect the Public—Not Just Patent Owners

The USPTO doesn’t get to rewrite the law. Congress passed IPR to ensure that weak patents don’t become weapons for extortionary lawsuits. By reinforcing discretionary denials with minimal restrictions, and, as a result, blocking access to IPRs, the USPTO is directly undermining what Congress intended.

Leaders at the USPTO should immediately revoke the February 28 memo. If they refuse, as we pointed out the last time IPR denials spiraled out of control, it’s time for Congress to step in and fix this. They must ensure that IPR remains a fast, affordable way to challenge bad patents—not just a tool for the largest corporations. Patent quality matters—because when bad patents stand, we all pay the price.

Republished from the EFF’s Deeplinks blog.

Filed Under: bad patents, inter partes review, ipr, patent trolls, patents, prior art, uspto

Cloudflare Destroys Another Patent Troll, Gets Its Patents Released To The Public

Patents

from the this-is-just-super-enjoyable-all-around dept

Three years ago, we updated Vizzini’s list of “classic blunders” from The Princess Bride to include “never try to patent troll Cloudflare.” That was when the company announced that patent troll Sable Networks had made that mistake and now needed to be taught a lesson. That lesson is now complete, and Cloudflare has successfully destroyed a patent troll (and embarrassed it along the way) so much that the troll has agreed to declare its entire patent portfolio open and free for the public to use.

First, some history: over a decade ago, the e-commerce site Newegg was getting sick of patent trolls and decided that it needed to take a “never settle” approach to fighting them. The thing with patent trolling is that it’s asymmetric warfare. Trolls get low quality patents and then shake down companies, knowing that it’s cheaper to just pay some smaller amount to settle than to take the matter to court and win. But, as Newegg’s leadership surmised at the time, settling only leads to more patent trolls and more shake down payments. Making it clear you’ll never ever settle (and being very public about that) should eventually lead patent trolls to look elsewhere.

Since then, a few other companies have embraced this strategy, but none has done so with quite the same gusto, zeal, and commitment to absolutely crushing the souls of patent trolls as Cloudflare.

In 2017, Cloudflare announced its plan to completely destroy a patent trolling firm, Blackbird. It launched something it called Project Jengo, which offered up rewards to anyone helping them to completely obliterate Blackbird’s patents. The campaign was a huge success. Cloudflare won in court (and on appeal) and it appeared it greatly limited Blackbird’s ability to keep trolling.

Sable Networks didn’t bother to educate itself on this before trying its trolling efforts on Cloudflare. Cloudflare opened up the same playbook on Sable (owners of a bunch of old terrible Caspian Networks patents that it bought for a song). Cloudflare fought back and won in court earlier this year.

And it wasn’t just a “you didn’t infringe” kind of win. They actually got a jury to invalidate the patent at issue (the lawsuit had started with many claims over multiple patents, but by the time it went to trial, it had been narrowed down to one claim on one patent, and Sable couldn’t even make that one stick).

Juries very rarely invalidate patents. They are much, much, much more primed to believe that any patent is legit and not realize how many junk patents there are. They also are generally unaware of patent trolling and abusive behaviors by patent trolls that amount to little more than extortion. But here, the jury was convinced that the patent was bogus:

Perhaps it was because Cloudflare dug in during the trial and made Sable look like the extortionate troll it is. From the transcript, you see that Cloudflare’s lawyers got Sable to admit that its only actual business was suing people:

Q. I mean, that’s your business. Let’s don’t beat around the bush. You’re in the business of filing lawsuits, true?

A. Yes.

Q. And you would agree with me that you’ve been in that business for a while, right?

A. Yes.

Also, Cloudflare got Sable to admit that it does little to no research before filing its lawsuits.

Q. You believe it would be responsible, reasonable business practice to sit down and talk to folks before you sue them, right?

A. Yes.

Q. You didn’t do that here, did you, sir?

A. No.

Q. And you don’t do that as your practice, right?

A. That’s correct.

Q. You told this jury not 20 minutes ago that you sue every time. You don’t talk to anybody. That’s what you told them, fair?

A. Fair.

Q. And what you stood up here and told this jury is everybody in this industry, including me, sues first and talks later, correct?

A. Correct.

Q. But that’s just not true, is it, sir? The responsible business people in this business actually sit down and talk to folks before they sue them, fair?

A. Fair.

Q. And you don’t do that, do you, sir?

A. No.

I mean, that’s a thing of beauty.

Anyway, beyond just winning the case, Cloudflare has gotten Sable to (1) pay Cloudflare $225k for having to defend this nonsense lawsuit and (2) much more importantly, agree to release its entire patent portfolio to the public for anyone to use so that Sable can never sue over them again:

If you can’t see that screenshot from the agreement, it says:

DEDICATION TO THE PUBLIC OF THE SABLE PATENTS; ROYALTY FREE LICENSE AND RELEASE; PAYMENT BY SABLE TO CLOUDFLARE

2.1 Dedication To The Public Of The Sable Patents. Within twenty-one days of the Effective Date, the Sable Parties shall dedicate the Sable Patents to the public, including by filing and recording the appropriate document(s) and paying any applicable fee(s) with the United States Patent and Trademark Office pursuant to 35 U.S.C. § 253. For the avoidance of doubt, this Section 2.1 requires the Sable Parties to disclaim and dedicate to the public the entire term, or any terminal part of the term, of the Sable Patents granted or to be granted.

Now, I believe many of Sable’s patents are close to running out anyway. But still, what a huge victory, and one that should be celebrated. Cloudflare has truly gone past NewEgg’s “don’t settle” standard, to this impressive “don’t settle, and we will make you regret patent trolling, and do everything possible to stop you from ever patent trolling ever again, and we’ll make you feel bad too, because you deserve it.”

Filed Under: don't settle, patent trolls, patents, project jengo, trolling
Companies: cloudflare, sable networks

Congress Poised To Bring Back Unfettered Patent Trolling

Patents

from the all-trolling-all-the-time-act dept

Have you been missing patent trolls destroying innovation and making products you like more expensive? Have you felt that, maybe, some lawyers who did nothing but send extortionate shakedown letters weren’t getting rich enough? Well then, good news for you, Congress is looking to bring all that back!

In the early years of Techdirt, we spent a lot of time talking about patent trolling, and how terrible, ridiculous patents that never should have been granted were being used as a shakedown mechanism against actual innovators. Greedy, shameless lawyers would get or buy extremely broad and vague patents, where there was no intention to actually bring a product to market, and then they’d threaten, extort, or otherwise shakedown, companies who actually built successful products, often totally unrelated to the patents in question.

Thankfully, a decade or so ago, the worst aspects of patent trolling were limited (though certainly not eliminated). Changes to the law made it easier to challenge bad patents, and the Supreme Court ran through a series of cases that made it clear that terrible concepts like business models and pure software were not patent-eligible subject matter. Both have been hugely important.

And the Senate is looking to roll back both of them.

In 2012, the America Invents Act had some issues, but among its good ideas was the Patent Trial and Appeals Board (PTAB), which enabled “Inter Partes Review” (IPR) of patents. This allowed anyone to challenge the validity of a patent by showing prior art to the PTAB, allowing the PTAB to say that the original patent examiner made a mistake and shouldn’t have granted a patent.

This process has been hugely important in stopping dangerous and bad patents. In the early 2000s, scholars detailed part of the reason the patent system was so broken was the lack of an antagonistic process in the granting of patents. You have the party applying for the patent, and then you have the examiner. The examiner may challenge the applicant on certain points, but there is no such thing as a “final” no (even if there is something called a final rejection), such that the applicant can keep trying. And there’s no one pushing back on the other side and pointing out why something doesn’t deserve a 20-year monopoly.

That resulted in plenty of patents that shouldn’t have been granted becoming weapons of mass litigation. The IPR process allowed people to challenge these patents, to show that the sole patent examiner who handled the case got it wrong, and to get rid of the dangerous and unnecessary monopoly.

Patent trolls have long hated the IPR system. They’ve challenged it multiple times, but so far, the concept has held up in court, including the Supreme Court.

The other major change that helped stop terrible patents was the Supreme Court repeatedly taking cases about people patenting things that should never have been patentable, and calling out the patent office and the lower courts for allowing this nonsense. One of these cases, Alice v. CLS Bank, from a decade ago, effectively said that software and business models weren’t patentable (though not as clearly as it should have). This followed on similar rulings saying that medical diagnostics and genes shouldn’t be patentable either.

But, of course, some people in Congress love patents and patent trolling. Senators Chris Coons (who, for years, worked for W.L. Gore, a company known for its patent enforcement, though which was also on the receiving end of many patent lawsuits) and Thom Tillis have long been supporters of ever more troll-friendly IP laws.

They have two bills that may get voted on today that seek to wipe out all of the good things discussed above. EFF has a summary of each:

The Patent Eligibility Restoration Act (PERA, S. 2140) would overturn Alice, enabling patent trolls to extort small business owners and even hobbyists, just for using common software systems to express themselves or run their businesses. PERA would also overturn another 2013 Supreme Court case that prevents most kinds of patenting of human genes.

Meanwhile, the PREVAIL Act (S. 2220) seeks to severely limit how the public can challenge bad patents at the patent office. Challenges like these are one of the most effective ways to throw out patents that never should have been granted in the first place. 

Both of these would be horrific for the future of innovation and would bring back into the foreground more patent trolling shakedowns over completely bogus patents that never should have been granted. It would literally set innovation back a decade. And for what? To help a few lawyers shakedown more innovators? Who wants that other than the patent trolls?

Over the last decade, patent trolling hasn’t gone completely away, but it has become less of an existential threat for innovators than it was for the first ten to fifteen years of the 2000s. These two bills would destroy that and bring us back to an era of less innovation and more shakedowns.

The EFF link has ways to contact your senators to vote against these bills, and I hope that many of you will do so.

Filed Under: alice v. cls bank, business model patents, chris coons, gene patents, ipr, patent trolls, patentable subject matter, patents, ptab, software patents, thom tillis

The Patent Troll Lobby Set Up An AI-Powered Comment Creator To Support Its Bad Patent Policy

(Mis)Uses of Technology

from the all-regulatory-comments-are-now-chatgpt's-opinion dept

You may recall that, back during the last net neutrality open comment period, the FCC’s comment system was overrun by millions of faked comments, including from many dead people. Not surprisingly, it was eventually determined that legacy broadband companies funded the fake comment submissions, which they felt they needed to do because actual activists were actually effective in getting the public to speak out in favor of net neutrality.

But of course, now we live in the “age of generative AI,” and it’s worth wondering just how that’s going to impact all of this. Amusingly, there are already academic journals suggesting that the government should sort and maybe even respond to regulatory open comments using AI as a tool.

But what about commenters themselves using AI to generate the comments in question?

We just recently wrote about how the US Patent Office is seeking comments on a dangerously problematic plan to make it much harder to kill bad patents by reforming the IPR (inter partes review) process to allow the patent director to just flat out reject challenges for certain classes of inventors, including many patent trolls. In that post, we linked to an EFF page urging people to send in their own comments against this proposal. But, really, the EFF is just linking people directly to the page on the Federal Register where you can comment. While they suggest some language, on the whole they expect users to write their own comment.

It appears the patent trolls who want this change have decided to use AI.

A few folks forwarded me copies of an email they received from “US Inventor” which is, effectively, a lobbying trade group for patent trolls, telling their members to submit a comment, and pointing them to an app on Streamlit. I’ll note that the email is ridiculous:

As you may know, the 2011 America Invents Act (AIA) created the Patent Trial and Appeal Board (PTAB). The PTAB is a nonjudicial administrative tribunal within the USPTO. The sole purpose of this court is to invalidate the same patents the USPTO previously granted, thus, creating a dictatorial power for the USPTO Director over America’s most important property right.

The statistics tell the truth about the destruction the PTAB has caused for inventors, small business owners, and startups. A staggering 69% of trials resulted in all claims being unpatentable, with an additional 15% leading to some claims being unpatentable. In total, 84% of patents reviewed by the PTAB result in the cancellation of claims. 

I mean, no, as the Supreme Court itself made clear, just as the US PTO can grant a patent, so too can they review it, and then revoke it, if they realize they made a mistake. That’s not “dictatorial power.” And, let’s not even get started on the idea that patents are “America’s most important property right.” I mean, people with brains read this. Don’t insult them.

As for the second paragraph, a normal person would read that and think, wow, it sure looks like the IPR process that enables the PTAB to review patents is pretty damn important since it appears to be catching a very large number of mistakenly granted patents, which would otherwise gum up the work of actual innovation by blocking innovators from bringing products to market.

Because, remember, if the patent is a good, valid, patent, then the PTAB will not cancel claims. The only reason the PTAB cancels claims is if they are bad claims that should not have been granted in the first place, and would create an innovation-destroying monopoly power to block products that should be on the market. So even in this email, the troll lobby is effectively admitting that their real problem with the IPR/PTAB process is that it’s getting rid of their bad patent claims, that never should have been granted.

Anyway, the email sends people to a form that says will help you craft a comment. They don’t say it’s using AI, but it is.

You put in a link to a bio or a LinkedIn profile, some “information about you or your company” and then it generates a pro-patent troll argument for you. It gives you three attempts to do this.

The person who forwarded me the email also tried generating the letters, using the LinkedIn addresses of random people, and the “comments” it generated… were clearly just using AI to read someone’s LinkedIn bio to add some “pro-patent color” at the beginning, then some random AI-generated nonsense in the middle, before appending the identical text at the end of the comment.

Sometimes, the results are (in true generative AI fashion) total gibberish. One of the samples I saw definitely attacked the PTAB, but not for the IPR process. Instead, one claimed that the PTAB was changing claims to appear even broader than the inventor meant (which, um, is not happening).

Of course, the end of each of the “generated” comments is identical, and appears to be pre-filled in the comment generator app. No matter what information you put into the generator, at the end it pushes specific “policy alterations” that the submitter (who did not write the comment) claims should be considered.

Now, there’s an argument that making it easier to generate stronger comments during public comment periods might be a good thing in general. Having read some terrible comments submitted by the public, I could see some general value in letting people scribble in their general thoughts (like they normally submit) and having a tool turn it into something more substantive and useful. But… it also likely means that open comment systems for the federal government are even more likely to be overrun with questionable comments, probably many of which were not even generated by humans.

And that seems like it could be problematic for the overall process of regulatory bodies seeking public comments in the first place.

Filed Under: ai, comments, fake comments, ipr, patent trolls, patents, ptab, regulatory comments
Companies: us inventor

US Patent Office Proposes Rule To Make It Much Harder To Kill Bad Patents

Patents

from the why-does-the-pto-want-more-bad-patents? dept

So, this is bad. Over the last few years, we’ve written plenty about the so-called “inter partes review” or “IPR” that came into being about a decade ago as part of the “America Invents Act,” which was the first major change to the patent system in decades. For much of the first decade of the 2000s, patent trolls were running wild and creating a massive tax on innovation. There were so many stories of people (mostly lawyers) getting vague and broad patents that they never had any intention of commercializing, then waiting for someone to come along and build something actually useful and innovative… and then shaking them down with the threat of patent litigation.

The IPR process, while not perfect, was at least an important tool in pushing back on some of the worst of the worst patents. In its most basic form, the IPR process allows nearly anyone to challenge a bad patent and have the special Patent Trial and Appeal Board (PTAB) review the patent to determine if it should have been granted in the first place. Given that a bad patent can completely stifle innovation for decades this seems like the very least that the Patent Office should offer to try to get rid of innovation-killing bad patents.

However, patent trolls absolutely loathe the IPR process for fairly obvious reasons. It kills their terrible patents. The entire IPR process has been challenged over and over again and (thankfully) the Supreme Court said that it’s perfectly fine for the Patent Office to review granted patents to see if they made a mistake.

But, of course, that never stops the patent trolls. They’ve complained to Congress. And, now, it seems that the Patent Office itself is trying to help them out. Recently, the USPTO announced a possible change to the IPR process that would basically lead to limiting who can actually challenge bad patents, and which patents could be challenged.

The folks over at EFF are rightly raising the alarm about just how bad this could be if it goes into effect.

The U.S. Patent Office has proposed new rules about who can challenge wrongly granted patents. If the rules become official, they will offer new protections to patent trolls. Challenging patents will become far more onerous, and impossible for some. The new rules could stop organizations like EFF, which used this process to fight the Personal Audio “podcasting patent,” from filing patent challenges altogether. 

The wording of the proposed changes seems to be written in a manner to be as confusing as possible. But there are a few different elements to the proposal. One part would limit who can bring challenges to patents under the IPR system, utilizing the power of the director to do a “discretionary denial.” For example, it would say that “certain for-profit entities” are not allowed to bring challenges.

Why? That’s not clear. But what difference does it make if the operation bringing the challenge to a bad patent is for-profit or not-for-profit? A bad patent is a bad patent, and often for-profit entities have the resources to actually hunt down the necessary prior art and to hire the best patent lawyers to bring a credible IPR challenge.

But the more worrisome change is this one:

Recognizing the important role the USPTO plays in encouraging and protecting innovation by individual inventors, startups, and under-resourced innovators who are working to bring their ideas to market, the Office is considering limiting the impact of AIA post-grant proceedings on such entities by denying institution when certain conditions are met.

Basically, if a patent holder is designated as an “individual inventor, startup” or “under-resourced innovator” then their patents are protected from the IPR process.

But, as anyone studying this space well knows, patent trolls often present themselves as all three of those things (even though it’s quite frequently not at all true). Patent trolling operations love to present themselves as the “small inventor,” even if they just got a terrible patent and sat on it waiting for someone to build something successful that — if you squint — can be presented in way that if someone doesn’t read carefully they might think violates the patent.

And, again, none of this should matter. A bad patent is a bad patent. Why should the USPTO create different rules that protect bad patents? If the patent is legit, it will survive the IPR process.

As EFF notes:

Many patent trolls would be exempt from IPRs altogether. The USPTO would prohibit anyone from challenging the patents of “small entities” and “under-resourced inventors.” But it’s trivially easy for even the most litigious patent trolls to portray themselves as “small inventors.” It happens all the time, and the USPTO rules buy into this sham. Many “inventors” are patent attorneys who have learned to game the system; they haven’t invented anything other than patents. Patent trolls that have sued hundreds of small businesses, and even public transportation systems, including Shipping and Transit LLC and various Leigh Rothschild entities, have claimed to be “inventor owned” businesses. 

If these rules were in force, it’s not clear that EFF would have been able to protect the podcasting community by fighting, and ultimately winning, a patent challenge against Personal Audio LLC. Personal Audio claimed to be an inventor-owned company that was ready to charge patent royalties against podcasters large and small. EFF crowd-funded a patent challenge and took out the Personal Audio patent after a 5-year legal battle (that included a full IPR process and multiple appeals). 

If you click through to the EFF page they show how you can provide comments to the USPTO on why it should not move forward with this plan, so if you’re concerned about giving patent trolls more power to abuse bad patents to stop innovation, please consider sending in a comment.

Filed Under: ipr, patent trolls, patents, uspto