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Innovators skeptical of Obama push for patent reform

By   /   March 9, 2016  /   News  /   No Comments

Stymied by Congress, President Barack Obama’s continuing support for patent law changes called for by Google and other tech giants is a cause for concern among smaller businesses.

In the years following passage of the 2011 America Invents Act, which brought the biggest changes the U.S. patent system has seen since the 1950s, Obama has echoed tech lobbyists’ insistence that more should be done to fight “patent trolls” – businesses and individuals who try to exploit U.S. intellectual property laws to squeeze money from inventors.

Michelle Lee U.S. Patent and Trademark Office

PTO Director Michelle Lee

Google has been a leading advocate of sweeping patent reforms, and The Wall Street Journal reported last spring that Google executives have averaged one White House visit per week since Obama took office. Michelle Lee, director of the U.S. Patent and Trademark Office, is one of several former Google executives serving in high-level Obama administration positions.

The president’s continued push for patent system changes is viewed as a serious threat by small companies that rely on patented technologies and processes. Some innovators fear the unintended consequences that could arise from too-broad changes meant to protect large businesses from patent trolls.

Jeffrey A. Birchak, associate general counsel and VP for intellectual property at Texas-based Fallbrook Technologies, told Watchdog.org his company has been fighting “the pervasive and overwhelming PR campaign established to roll back patent protections” for a decade.

Fallbrook holds patents for its NuVinci technology, a continuously variable transmission system originally designed for use in bicycles.

“These innovations are incredibly expensive,” Birchak said. “We feel the deck has never been more stacked against a company like ours than it is now.”

The America Invents Act introduced costly new hurdles to patent abuse challenges in an effort to stop frivolous lawsuits. Google wants still more complex and restrictive requirements, which could empower large multinational corporations while threatening small businesses’ ability to defend their intellectual property.

Birchak worries that Congress will give in to calls for sweeping changes that could do more harm than good, and believes any new reforms aimed at patent trolls should be considered individually instead of being rolled into an omnibus bill.

“Proponents continue to attempt to foster a chicken-little feeling of massive failure of the system to support their desire for sweeping reform where each issue doesn’t get carefully reviewed and negotiated point by point,” Birchak said.

That doesn’t mean Fallbrook is against every potential change to the existing patent system. Birchak noted in particular a lack of clarity in patent law following the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank. The Alice ruling has resulted in the invalidation of many software patents.

“The uncertainty around what is actually patentable will result in areas of science receiving less research in favor of areas with more predictable protection. This is inevitable with the nature of investment capital,” Birchak said.

“The prospect of one bit of cancer research getting discarded for another because it may not be protectable scares the hell out of me,” he added.

Birchak believes Congress can help the Patent and Trademark Office run smoothly by restricting the agency’s funding to specific PTO uses, and he cited the Supreme Court’s 2007 KSR v. Teleflex ruling as another major source of uncertainty for businesses and would-be inventors.

“Again, just like Alice, the KSR case created confusion, replacing what had been a useful albeit imperfect test,” Birchak said. “Congress is properly positioned to listen to the various arguments and come up with a workable and predictable test that patentees can rely on and that PTO examiners can apply in a repeatable and common manner.”

Fallbrook is looking for the same thing Google and other tech giants claim they want: a level playing field with clearly defined rules that can’t be easily exploited by bad actors. But unlike the Obama administration, Birchak is not convinced a big bundle of changes to patent law would be in America’s best interests.

The current environment, Birchak said, is “a world in which David has pretty much been robbed of his stone in his battle with Goliath” — and catering to the giant patent holders with the biggest lobbying budgets could make things worse.


Jason was formerly a reporter for Watchdog.org