The anti-inventor lobby conducted a panel discussion on Monday July 20 in support of H.R.9. The crux of this panel was to show that patent litigation has increased thus it is urgent for Congress to pass H.R.9 now. Unfortunately, the data they cite does not support their conclusion.
The ant-inventor lobby’s misleading invitation to the panel discussion cited in a “study” by Lex Machina:
“Rep. Zoe Lofgren is hosting a broad coalition of retailers, technology companies, home builders, manufacturers, food industry, and startups to discuss how H.R. 9 puts an end to malicious and unfair litigation practices, while preserving strong patent rights for companies that bring real innovation to our economy.
Patent trolls are paper companies that don’t invest in R&D, don’t manufacture goods, don’t provide services and don’t sell products, but exist merely to extort money from real businesses by threatening expensive litigation over dubious and fraudulent patent claims.
With a recent study showing that more patent lawsuits were filed in the first 6 months of 2015 than ever before, and that 68% of these suits were brought by patent trolls, it is more important than ever that Congress act quickly to stop patent trolls before more small businesses are bankrupted, or more R&D funds are wasted.”
It is clear the anti-inventor lobby’s strategy is to mislead Congress to pass legislation that eliminates “patent rights for companies that bring real innovation to our economy”.
The word “study” implies factual analysis; however, Lex Machina simply provided bare data and graphs with no analysis. Lex Machina’s data is certainly important to informing the patent reform discussion so that Congress comes to a reasoned and fair conclusion. But data is nothing but data, and many questions must be asked and answered to develop actionable information in the form of a “study”.
- What is a patent troll? Lex Machina data says nothing. The Google lobby cynically defines a patent troll as pretty much anyone who asserts a patent, which not only includes independent inventors, but also investors who invested into a company that failed due to massive theft of patent rights by large companies like Google.
- Who are the so-called patent trolls? Lex Machina data does not inform us. The ten-year war on inventors has made it very difficult for an inventor to defend patent rights, so many sell patent rights to someone who can. In most cases, these “paper companies” represent the interests of inventors whose patented inventions have been stolen by large corporations.
- Are the defendants in fact “small businesses”? The anti-inventor lobby says they are, however the Lex Machina data is silent. Plaintiffs know that even a small defendant can file an IPR created under the America Invents Act, which is invalidating three quarters of the patents it sees. The cost of a patent suit is measured in the millions of dollars and nobody files a lawsuit if they cannot get at least the cost of the suit returned. Since a license represents only a small percentage of the total sales revenue of an infringing product, it is unlikely these cases are against small companies. The stronger argument is the suits are against large companies.
- Are the lawsuits “dubious and fraudulent”? Lex Machina says nothing about merits. However, the anti-inventor lobby tells us the lawsuits are “dubious and fraudulent”. Today, attorney fees are shifted to the plaintiff for frivolous cases at a high rate. If someone files a frivolous suit, they subject themselves to millions of dollars of risk in fee reversal. A more logical conclusion is these lawsuits are meritorious.
The Lex Machina data shows that plaintiff count is down in relation to the number of lawsuits. In other words, there are more infringers per patent. A better guess at the meaning of Lex Machina’s data is that patent rights are no longer respected and thus are stolen by more companies.
If a real study were performed, the Lex Machina data is much more likely to show that theft of patents by large corporations has risen dramatically, and once stolen, inventors have no options but the courts to defend patent rights. It is a measure of corporate theft of patented property from inventors who are defending their property rights – not, as the anti-inventor lobby would have us believe, of frivolous lawsuits by a cartoon character.