In 2019, the state of U.S. patents showed consistently mixed signals
Here we stand, seemingly on the same marshy patent ground we were sinking in at the beginning of last year.
BY DAN BURI
Ask 10 professionals for their attitude on the state of patents in 2019, and you’ll receive 10 distinctly different opinions—ranging from the incredibly negative “patents-are-dying” attitude to the overly optimistic “everything is fine.”
The consternation of it is that each of those professionals would be correct in their estimations, and entirely wrong. That was the patent world of 2019: Everyone was wrong, everyone was right, because no one knows which way is up anymore. We have officially entered the upside down.
2 steps forward, back
For every positive indication of an improving U.S. patent system in 2019, there was an equally negative counter-signal from the market, along with multiple nonsensical signs. For every $200 million patent infringement verdict, there was an about-face of a $500 million verdict in a decade-long disagreement.
When U.S. Patent and Trademark Office Director Andrei Iancu released official guidelines for patent subject-matter eligibility—presumably in an effort to reestablish certainty within the U.S. patent system—the courts simultaneously undermined any rational person’s ability to place his or her feet on firm patent ground.
It has taken intellectual property investment and innovation traveling outside of the United States before any kind of majority began to take notice.
In an effort to re-strengthen patent rights for America’s innovators, a U.S. Senate Subcommittee was revived early last year. In recent hearings, Sens. Chris Coons (D-Del.) and Thom Tillis (R-N.C.) provided testimony along with 43 other experts to the Subcommittee on Intellectual Property, most of which advocated for stronger patent rights.
The senators’ stance is clear: The patent system has been hijacked by large tech companies and needs repair. As the senators wrote, “[the patent system] is now at risk, because our patent laws have become overly complicated, riddled by uncertainty, and, frankly, hostile to innovation.”
The existence of the subcommittee seems to be a positive indication that change is on the horizon. Yet here we stand at the beginning of 2020, seemingly on the same marshy patent ground we were sinking in at the beginning of last year.
Portrait of perplexing
Let me illuminate you with an anecdote.
An inventor of mobile phone-related technology tried to sell his patent a few years ago. After years of toiling over his invention, multiple false starts trying to solve how to develop a company around his innovation, and tens of thousands of dollars of personal investment, he decided it was time to let go and sell his patent.
He was willing to sell his valuable patented innovation for as low as five figures but was given the cold shoulder from every tech company from California to Massachusetts, from the UK to Japan. No one would consider his patent seriously.
The inventor grew depressed. A passion in which he had invested for many years was vanishing right in front of him. He let his patent expire.
But this is where the current system doesn’t make sense.
Early in 2019, the inventor was approached by a group that felt he was handed a raw deal. This group saw value in his patent, even as an expired asset. They agreed to help the inventor salvage whatever they could of his decades of effort.
Filing a few lawsuits for past infringement to defend his rights in the United States, the inventor soon found that a large multinational phone and electronics company wanted to sit down with him. It was offering to take a non-exclusive license to his patent, mind you, after being specifically approached to consider purchasing the patents very recently. The company offered to take a license on the patent for mid-six-figure value, and the inventor accepted.
So, rather than purchasing and owning the patent outright, this company elected to take a non-exclusive license to the patent for 10 times the price. Ethical discussions aside, are we sure the economics of efficient infringement are sound?
So, while all is not lost, all is also not right. Inventors are disillusioned. Start-ups aren’t sure if they should be investing in patents or ignoring them completely.
Patent attorneys are confused—as are the courts, which are doing very little by way of extricating us all from this inanity. Large tech companies are equally perplexed, some no longer sure of the significance of their patent investment over the years, while others are entirely dismissive of patents altogether.
Everyone is wrong. Everyone is right. And no one knows which is which.
Welcome to the upside down. Get cozy, because who knows when we’ll have the clarity this system needs?