Congress Pushing A Terrible Bill To Massively Expand Patent Trolling

from the this-would-be-bad dept

For most of the history of Techdirt, we've talked about what an incredible mess the US patent system has been. There are many, many reasons for this, but a big one was that for decades, the appeals court that handles all patent cases, the Court of Appeals for the Federal Circuit (or CAFC), kept expanding what it considered to be patentable subject matter, and the Supreme Court completely ignored the issue. This culminated, ridiculously, in the State Street decision, which massively expanded what was considered patentable software (before that there was software covered by patents, but it was very, very limited). What made this situation truly hellish for innovators, is that (1) the software world was exploding with all different kinds of apps, and (2) almost no software was documented in the very few areas where patent examiners look for prior art: mainly, other patent applications and scientific journals. There was no need to document software in those places, because (1) when most people recognized software shouldn't be patented, very few even tried, and (2) why would you?

That resulted in a perfect storm in which patent trolls rushed in to fill the void. Tons upon tons of ridiculously broad patents were filed (or older ones were dug up and "repurposed" for use in trolling). Then it just became a shakedown game of numbers. Find companies doing something vaguely like what's broadly and oddly described in your patent, tell them they're infringing -- and offer to "settle" for less than the cost to win in court.

The tide started to change over the last decade and a half or so, in part because of a few changes to the law, but more importantly, the Supreme Court started to wake up to the fact that the CAFC had gone rogue and had massively rewritten patent law. And then over a period of about a decade, case by case by case, the Supreme Court smacked down CAFC. Two of the biggest such smackdowns came in the Mayo Labs ruling in 2012 which rejected medical diagnostic patents, and the Alice ruling in 2014, which rejected patents on software that performs "generic functions" (which is basically all software).

Both of these cases focused on Section 101 of the Patent Act, which defines what actually is patentable subject matter. It's short and sweet:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

In both of the cases mentioned above, the Supreme Court noted simply that 101 doesn't cover "laws of nature, natural phenomena, and abstract ideas" as decided in an earlier case that CAFC had ignored for two decades, Diamond v. Diehr. In the Mayo case, the court noted that medical diagnostics was trying to patent laws of nature. In the Alice case, "abstract ideas."

Since then, both cases have been incredibly useful in killing off a ton of truly awful patents. And the patent trolls and their friends have been really angry about this. And now it appears they've finally got a plan to reopen the patent trolling floodgates. And, they've got bipartisan members of both the House and the Senate to push a plan for them. In the Senate, Thom Tills and Chris Coons have announced plans to introduce a horrific bill to rewrite Section 101 in a manner that can only be called "Make Patent Trolls And Bogus Litigation Great Again." A House version is being introduced by Reps. Hank Johnson and Steve Stivers.

The biggest part of the bill is to remove the requirement that a patent be for an invention that is "new and useful." Yes, you read that right. The most fundamental part of a patent is that it's to encourage people to invent something that is new and useful, and these elected officials want to do away with that. Then, they want to massively limit what is not patent eligible, demanding very narrowly defined areas, like "fundamental scientific principles" and "products that exist solely and exclusively in nature," rather than what we now have, which is "laws of nature." On the software side, they want to say that only "pure mathematical formulas" and "mental activities" would be excluded, but abstract ideas implemented in software? PATENT AWAY!

And, of course, the bill is explicit, that with this new list of narrowly defined exclusions, it would literally wipe away those big Supreme Court wins that have helped open up innovation and slowed down patent trolls.

This would be absolutely terrible for innovation.

Alex Moss, from EFF, has gone through and detailed just how massive a change this proposal would create and what a disaster it would be for companies that actually innovate (as opposed to those that just shake innovators down for money.) On the removal of "new and useful" from 101:

Removing the requirement that inventions actually be new and useful upends a fundamental Constitutional principle of patent law. The Constitution grants Congress the power to issue an “exclusive right,” such as a patent, only “[t]o promote the progress of science and useful arts.” The patent system’s entire purpose, in other words, is to encourage technological progress. Allowing patents on things that are neither new nor useful undermines the purpose of the Intellectual Property Clause. Section 101’s purpose is to weed out patent applications that cannot possibly be inventive. The “existing statutory utility requirements” do not, and cannot, accomplish this. That’s because other parts of U.S. patent laws do not include a specific “utility” requirement. Section 102 and 103 set out requirements for determining whether an invention is obvious in view of pre-existing knowledge in the field—what is known as “prior art”—but courts and the Patent Office apply those requirements extremely narrowly. It’s especially difficult to invalidate bad software patents under Sections 102 and 103. Because courts and the Patent Office didn’t start granting patents on software alone until the mid-1990s, there is a dearth of patents and patent applications that could be used to invalidate software patents under Sections 102 and 103. And because the code for most software products is not public, it isn’t readily available to others in court challenges.

So, yeah, that would be bad.

At this point, this is just a proposal, rather than an actual bill, but they promise to introduce it later this year. Patent trolls and some larger organizations that live off of patent licensing are likely going to push hard for this bill. It's basically a full employment act for patent lawyers. What it's not is a recipe for innovation. It is the reverse. Of course, because some people laughably believe that a patent itself is a sign of innovation, too many people incorrectly believe that "stronger" patent laws mean more innovation. That's not how it works. Patent trolling scares off actual innovators, makes innovation much more costly, and blocks important innovations from the marketplace.

Already the quotes from the Senators and Representatives demonstrate the kind of innovation-ignorant arguments we're likely to see in support of this bill. Coons falsely claims that "today US patent law discourages innovation in some of the most critical areas of technology, including artificial intelligence, medical diagnostics, and personalized medicine." This is laughable. There are massive innovations happening in all three of those fields. And part of that is because of decisions like Mayo and Alice opening up those fields and limiting some of the worst patent trolling.

Tills claims that this is to "reform our nation's complicated patent process." It's not that complicated. And removing the requirements for "new and useful" and making most software patentable again is going to create a huge mess of a patent thicket that will be a massive drain on innovation. That's complicated.

Hopefully, reason will prevail and these elected officials will learn just how much harm they're about to do to the sectors of the economy that are actually innovating -- with less fear of bogus patents and widespread patent trolling. Bringing that back would be a total disaster for innovation.

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Filed Under: abstract ideas, chris choons, hank johnson, medical diagnostic patents, new and useful, patent eligible subject matter, patent trolling, patents, software patents, steve stivers, thom tills, useful