Patent Office proposals hurt small innovators

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Representing Vermont in the Senate for nearly 50 years will teach you how to fight like hell for the little guy. As the second smallest state by population, I worked hard to ensure that Vermont’s voice wasn’t drowned out by the larger states or the louder voices. That’s the same mentality I brought to the Judiciary Committee, where one of my top priorities was leveling the playing field in the world of intellectual property, especially for America’s small businesses and entrepreneurs.

That’s why I find the new proposed rules from the U.S. Patent and Trademark (USPTO) so concerning: they could wipe out much of the progress we made on behalf of the small innovators in our patent system.

Intellectual property is the backbone of our economy. Since our founding, our patent system has allowed the U.S. to grow into the greatest economic power in the world. At its best, our patent system incentivizes innovation, drives economic growth, fosters competition, and protects critical investments by individuals and businesses. At its worst, it hinders innovation and enables abuse.

During my tenure leading the Judiciary Committee, I reached across the aisle to write the America Invents Act (AIA), which passed both the House and Senate with overwhelming bipartisan support and was signed into law by President Obama. It’s one of my proudest accomplishments from my time in the Senate because it transformed our outdated patent system and created a more fundamentally fair and competitive innovation ecosystem for small inventors and businesses. The reforms cracked down on abusive litigation by non-practicing entities, also called patent trolls, that leverage patents that shouldn’t have been issued in the first place and sue productive businesses, often small, in the hopes of a settlement.

But the USPTO’s new rulemaking proposal violates what Congress agreed to in the AIA and is harmful for several reasons. The Constitution clearly outlines the separation of powers between Congress, courts, and the executive branch for a reason – and now, the USPTO is veering dangerously close to legislating.

One aspect of the rulemaking I find deeply concerning is the USPTO’s proposed limitations on what it characterizes as serial petitions or multiple challenges to previously granted patents. The AIA created a review process for challenging the validity of patents, as a protection against bad patents being used in legal harassment campaigns. Those in favor of the types of new limitations outlined in the proposed rules typically argue that if a patent is reviewed by the USPTO and isn’t invalidated, then it shouldn’t be challenged again in the future. In other words, there should only be one opportunity for the agency to review a patent. On face value, it seems straightforward.

However, this is an issue Congress thoroughly debated and ultimately decided not to include in the AIA for several reasons. Those that sue for patent infringement – in many cases, the patent trolls – don’t face any type of similar limitations. They can, and do, repeatedly assert their low-quality patents against multiple entities over a stretch of many years. To say that a patent troll can only have their patent reviewed once but can assert that patent against as many businesses that it wants, creates a striking imbalance. If you are a small business harassed with a meritless patent infringement lawsuit, you should not be denied the protection of patent review because another business asked for review years prior and may have failed to make the most compelling arguments.

New limits on multiple challenges have the potential to backfire on the little guy. If patent reviews are a one-and-done proposition, patent trolls will be incentivized to target smaller, under-resourced businesses first, which may not be in the best position to make the strongest arguments against the claims, before moving on to larger businesses. Also, new restrictions will inevitably take the option for USPTO review away from those who most need it, smaller businesses that don’t have the resources to fight an expensive legal battle.

New rules also appear in many ways to be a solution in search of a problem. According to USPTO data, 85% of patents challenged are challenged by a single petitioner and 95% are challenged by just one or two petitioners. Preventing undeserved harassment of patent owners is a good goal but attempts to do this should not incentivize the meritless harassment of businesses, especially small businesses.

At the end of the day, the USPTO’s proposals would allow even more invalid patents to be weaponized against the American economy, especially small businesses, job creators, and manufacturers. The agency cannot simply rewrite the law as they see fit. That’s the role of Congress. Many of these issues were debated thoroughly when we passed the AIA. Significant changes must go through Congress – not rulemaking – whether the USPTO likes it or not.

Patrick Leahy served as U.S. Senator from Vermont from 1975 to 2023 and was the former chairman of the Senate Judiciary Committee, and also served as the chairman of the Judiciary Subcommittee on Intellectual Property in the 117th Congress.

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