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Don’t Weaken the Leahy-Smith America Invents Act

March 30, 2022, 8:00 AM

In 2011, I jointly authored with Sen. Patrick Leahy (D-Vt.) the bill that would become the Leahy–Smith America Invents Act (AIA). The AIA was the most extensive reform of the U.S. patent system in 60 years. A centerpiece was the creation of a new quasi-judicial administrative body called the Patent Trial and Appeal Board (PTAB) to adjudicate patent disputes. Our intent was to improve patent quality and provide a cheaper and faster alternative to district court litigation. This would encourage innovation, create jobs, and generally modernize the U.S. patent system.

In drafting the AIA, one of our chief goals was to achieve a balance—between small businesses and large companies, between patent owners and challengers, and between judicial and administrative bodies. At the time, we recognized the potential for some large companies to upset this delicate balance, using PTAB proceedings not as alternatives to litigation, but as tools to harass patent owners.

In the decade since the AIA took effect, the wording in the law to prevent that harassment has proved unequal to the task, and entire industries have emerged to perpetuate these abuses.

Unfortunately, a new bill introduced in September 2021 by Leahy, the Restoring the America Invents Act (RAIA), contains provisions that would encourage these abuses.

RAIA Would Add Hurdles, Increase Cost of Enforcing Patents

For example, it would severely restrict the discretion of the director of the U.S. Patent and Trademark Office (USPTO) to reject patent challenges that are duplicative of a pending district court case.

And it would not allow the director to reject serial or parallel challenges to the same patents, or challenges intended purely to harass patent owners or manipulate stock prices.

The RAIA (S. 2891) would also add a variety of procedural hurdles that would delay a final PTAB decision and increase the costs of enforcing a patent.

For instance, it would restrict the discretion of district courts to stay a court case when there is a duplicative pending PTAB proceeding. These measures would only prolong costly litigation, embolden deep-pocketed infringers, and make enforcement of patent rights especially difficult for smaller inventors and entrepreneurs.

Finally, the RAIA would broaden the scope of PTAB proceedings, making them more advantageous than litigation for patent challengers and more susceptible to abuse.

For example, the AIA included a carefully crafted compromise that allowed time-limited PTAB challenges to a patent on virtually any grounds, but allowed a PTAB challenge at any time only on narrow grounds. The RAIA would upset that balance by allowing PTAB challenges at any time for a broader array of reasons.

It would also allow entities whose sole purpose is to challenge patents at the PTAB to appeal PTAB decisions without revealing the “real party in interest” on whose behalf they are acting. This would roll out the red carpet for profiteering companies and law firms to file burdensome appeals against inventors.

RAIA Would Cement PTAB as Tool for Litigation Gamesmanship

In the committee report on the AIA, we wrote about the importance to inventors of having “quiet title”—clear ownership that can’t be challenged—to ensure continued investment resources. We cautioned that the legislation should not be used as a “tool” for “harassment or a means to prevent market entry through repeated litigation and administrative attacks on the validity of a patent.”

Doing so “would frustrate the purpose of the [AIA] as providing quick and cost effective alternatives to litigation.”

Changes like those contemplated in the RAIA would upset the balance we struck and cement the PTAB as a tool for litigation gamesmanship rather than the less expensive alternative to litigation it was intended to be.

A better course for Congress to pursue would be to focus on measures that would provide the “quiet title” to patents that is so important for attracting investment in new technologies and innovative products. That is especially the case as Congress considers legislation to compete more effectively with China, whose state-controlled economy does not rely on the same incentive structures for channeling resources into new technologies.

We need strong patents to make sure we can compete with China on cutting edge technologies like 5G, artificial intelligence, quantum computing, biologics, pharmaceuticals, and on future technologies that have yet to be discovered.

The Leahy-Smith America Invents Act was intended to encourage fairness, not gamesmanship. It should remain that way. The system we designed can help keep America the strongest and most innovative economy in the world for a long time to come. We don’t need to weaken it.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Lamar Smith served for 32 years (1987-2019) in Congress as the representative for the 21st Congressional District of Texas. He is currently a senior consultant at Akin Gump LLP.