We’re hearing a lot of claims about the STRONG Act as an “alternative” to patent litigation reform. The campaign supporting the bill has been misleading at best.
There are two pervasive myths that the STRONG Act’s supporters keep repeating that I want to address in this post.
Myth 1: Inter partes reviews are unfair to patent owners.
STRONG Act supporters complain constantly that the inter partes review (IPR) procedure is unfair to patent owners. They call the Patent Trial and Appeals Board (PTAB) a “patent death squad” or they talk of “patent kill rates” at the PTAB. They bemoan the poor patents struck down in their prime, with most of their term ahead of them.
The problem is that it’s not true. It’s not even close to being true.
Here’s something you wouldn’t know from listening to the reporting about patent reform: most patent claims challenged in inter partes review survive.
In fact, the PTAB only invalidates a small minority of the claims for which a challenge is brought.
You can see the statistics from the USPTO’s website for yourself. Follow this link and select “Inter Partes Review Petitions Terminated to Date.”
All this talk of “patent death squads” is nonsense. It simply isn’t reality.
Considering that patent owners are already winning the vast majority of the time in inter partes review, it’s hard to see how the proceedings are somehow unfair to them.
Myth 2: The Innovation Act is unnecessary because the Government Accountability Office said that patent trolls only account for 20% of patent lawsuits.
It is true that the report put out by the GAO in 2013 said that patent monetization entities (i.e., companies that make money by suing on their patents, not including individual inventors or universities) brought 24% of patent lawsuits in 2011. STRONG Act supporters repeat this statistic, often snidely mocking the people who claim that there’s a patent troll problem.
Here’s the thing: there are a lot of patent lawsuits, so 24% of all patent lawsuits is a large number. The GAO said that there were over 3,400 companies sued by patent trolls in 2011, which was more than four times the number sued in 2007. (See page 18 of the GAO report.)
Three thousand companies sued by patent trolls every year. That number is probably low, and it has certainly gone up. But still, three thousand companies a year, and yet we’re told that it’s nothing to worry about.
In contrast, Senator Coons said at a public event that the STRONG Act substantially rewrites the inter partes review procedure because there has been abuse of IPRs by hedge funds trying to manipulate stock prices.
How many times has that happened?
There’s no way to avoid the conclusion that supporters of the STRONG Act are not telling the whole truth. They’re making up a problem with inter partes review that doesn’t exist and they’re denying a problem with patent trolls that does.
Don’t be distracted by their stories. Support real patent reform, not the STRONG Act.