Why Patent Trolling Is So Hard To Fix

CREDIT: Shutterstock/Graphic via Dylan Petrohilos

Software developers could have a hard time getting their next big idea patented thanks to new rules the U.S. Patent and Trademark Office (USPTO) issued, making some inventions, particularly innovative software and medical devices, unpatentable.

The new guidelines will only apply to new patent applications, and serve as updated instructions for patent officers who review them.

“They’re not going to have any immediate impact on patent trolling,” the phenomenon where patent holders sue businesses to enforce patents that can be overly broad, said Arti Rai, a Duke University intellectual property law professor who worked as an administrator for the Patent Office in 2009.

“The bigger concern seems to be is that they’re going to have is on legitimate inventions, certain types of software that should be patentable.”

The Patent Office doesn’t have legal authority to interpret patent law and make regulations that can be enforced in the courts. It can only issue guidelines and enforce patent officers to follow them, but those guidelines can be legally challenged and overturned in court.

Because of the agency’s limitations, Rai said, the Patent Office strives to make rules that fall in line with previous court decisions: “In my view, anything they do, even if it is extreme, it could be challenged immediately. Because they don’t have the power to make law, they don’t go outside the four corners of what the courts have already said.”

That is the case with new guidance issued Thursday in response to recent U.S. Supreme Court decisions Alice Corp v. CLS Bank and Mayo v. Prometheus. Those cases represent “dramatic turning points” in what is considered to be patent eligible, Crouch wrote in a blog post.

“I could see how the tech community could be upset for encouraging a pathway of eligibility. At least some lawyers for tech companies [would want] the Patent Office should make the determination from what it’s given,” Rai said.

“So people who are working on fixing the patent system recognize two distinct approaches: clean up bad patents that shouldn’t have been issued and help the USPTO do a better job so that doesn’t happen again,” Dennis Crouch, a patent attorney and associate professor at the University of Missouri Law School. The guidelines affect the latter.

“In the past three years, the SCOTUS has taken up cases regarding the patenting of software and [medical] diagnostic methods, and has shifted law in what it means to have a patentable invention. They expanded what we think of as an ‘abstract idea’ and what we consider a ‘law of nature,’ which are not patentable.”

“The SC decision doesn’t delineate when something is or isn’t patent eligible,” Crouch clarified, but the Supreme Court’s most recent cases, Alice Corp v. CLS Bank and Mayo v. Prometheus expanded that definition and gave patent officers, who are typically content experts and trained engineers or scientists, more leeway to discount an idea as abstract without supporting evidence.

“They make it clear that the patent examiner doesn’t have to cite evidence that something isn’t patentable and say something is an abstract idea because it looks like something the court has already said and we don’t have to give additional factual evidence,” Rai said.

An idea is only patentable if it completes a task that would otherwise be inachievable without it, Crouch said. For example, testing a person’s blood for specific antigen levels to indicate disease is not patent worthy, but a new device or treatment used to remove the blood would be eligible. “It’s about learning information or making a correlation that couldn’t have been done in someone’s head,” he said.

“The USPTO is trying to help draw the line, provide people with more concrete information on how they will perform the new test,” to determine patent eligibility, Crouch said. “They’ve very much put their thumb on the scale in favor of the patentee. These new guidelines provide pathways to eligibility, a method someone could use to make sure their invention is eligible.”

Those guidelines, while helpful for patent applicants, could potentially feed the growing problem the Patent Office is trying to prevent — increased patent trolling from granting bad patents.

“Each year we have thousands of patents and only 30 or 40 patent cases,” Crouch said, adding that the new guidelines will make it easier for bad actors and greenlight more ideas that would later be ruled as abstract in the courts. “The guidelines opens the Patent Office up to people who are trying to game the system. Once you have a patent, even if a court invalidates it, it’s still worth something because it’s expensive to try to override that.”

Crouch thinks the Supreme Court may have gone too far in its analysis limiting the patenting of software. “People who invent new forms of software should be able to patent them,” he said. “Throughout the late 1990s and early 2000s there was a reduction in quality examination at the Patent Office.”

These updated guidelines are part of an “overall quality initiative” to keep history from repeating itself. But while patent trolling is a growing problem that has claimed thousands of businesses through frivolous lawsuits, Crouch said, “There are patent owners who are gaming the system but at the same time, I’ve seen it in a number of instances, where someone gets labeled a ‘patent troll’ because they enforce their patent.”