New Bill Could Undo Years of Progress in the American Patent System – EFF

Improvements to the disastrous patent system in the US has been slow and incremental – and a bill could reverse that progress.

Recently introduced legislation could undo the incremental progress that has been made in the US patent system.

For well over a decade, there has been an incredibly shady industry known as patent trolling. In a nutshell, a shell company either patents or buys up a number of patents. These patents are often pretty obvious such as recording a concert or a windshield on a vehicle. After getting those patents, that shell company then contacts smaller businesses who have no real way of legally defending themselves. That company then demands a license fee from each of those companies that won’t necessarily bankrupt them, but chisel small amounts of money out of them nevertheless.

After getting a list of small companies to comply, the shell company then goes after larger corporations, demanding millions, even billions, in license fees. Should they not comply, they then go through the courts to try and make it financially unfeasible to fight and obtain a court settlement after. If things ever do go sideways, that shell company can just fold at any time and the well hidden owners can make off with their ill-gotten gains. In short, it’s straight up legalized fraud, theft, and racketeering. There are, of course, variations to this, but that should give you an idea of what is involved in patent trolling.

Unfortunately, this same system has been defended by copyright extremists as necessary to protect innovation. This despite there being little to no evidence that the current system is actually fostering innovation in the first place. As a result, changing the system to actually foster innovation and removing avenues for fraudsters to steal money from businesses of all sizes has been a slow and incremental process.

For those who innovate on the internet, a ridiculous line in the patent system that will get almost anyone groaning are patents that have the line ‘but on a computer’. Numerous patents over the years have tried patenting the obvious and adding the line ‘on a computer’ to try and chisel money out of people who are actually trying to do innovative things. Sadly, the patent system, for far too long, has been overly accommodating with such patents with the rules stacked against those who are actually trying to develop something innovative.

Similarly, medicine has its own share of problems with the patent system. An obvious example being pharmaceutical drugs getting patent protection and drugs costing millions for life saving medication. Additionally, there are those who are trying to patent genetics. Want to create a treatment that involves modifying that particular part of the genome? You have to pay for the privilege. Yeah, it’s straight up predatory and amoral.

Now, the Electronic Frontier Foundation (EFF) is warning that new legislation could undo years of progress and possibly make the system even worse. US Senator, Thom Tillis (R-NC) has introduced the “Patent Eligibility Restoration Act”. The legislation is being called a gift for patent trolls and predatory businesses. From the EFF:

Pro-patent maximalists are trying to label the Tillis bill as a “consensus,” but it’s nothing of the sort. We need EFF supporters to send a message to Congress that it isn’t acceptable to allow patent trolls, or large patent-holders, to hold our technology hostage.

Ten years ago, there weren’t effective legal mechanisms to throw out the worst types of patents. If someone targeted by a patent troll felt the patent was wrongly granted, they’d likely have to pay millions of dollars in patent litigation costs just to take their chances in front of a jury. The Tillis bill will make it easier to use exactly the types of weak, overbroad patents that often threaten startups and small businesses.

Since the Alice Corp. decision, it’s much harder to demand money using questionable patents. That’s why patent trolls, among others, don’t like the decision, and would like to see a bill like this pass to override it. But the Senate should not grant this wish.

The Tillis bill encodes a version of the old rule that virtually any kind of “business method” is worthy of a patent. It explicitly allows for patents on “non-technological economic, financial, business, social, cultural, or artistic process,” as long as those are embodied in a “machine or manufacture.”

In other words, you can take basic human “methods” of doing business, or even socializing, and just add a generic purpose computer (or another machine). The Tillis bill does specify that the machine must do more than “merely storing or executing,” but that’s an unclear if not meaningless narrowing. That will merely allow patent lawyers to avoid using those exact verbs—“storing” and “executing”—when they’re writing patents.

The Patent Eligibility Restoration Act’s negative impacts won’t be limited to software. The bill proposes to overturn the Supreme Court’s clear rule against getting patents on human genes.

Genes aren’t inventions. They exist in nature. But for about two decades, the U.S. Patent and Trademark Office wrongfully granted thousands of patents on human genes. The companies seeking these patents claimed that because they had “isolated” the genes outside the body, they should be allowed to hold patents on them.

Incredibly, the Tillis bill carves out the exact same loophole that was shut down by the ACLU’s lawsuit. It supposedly bans patents on “an unmodified human gene, as that gene exists in the body,” but then in the very next section says that any gene that has been “isolated, purified, enriched, or otherwise altered” would be eligible.

This is the same patent abuse loophole that Myriad used to take advantage of cancer patients and their doctors. That’s why the ACLU has called the bill “a gift to patent lawyers and predatory companies” that risks “the creation of a disturbing market for exclusive rights over material found in nature.”

We agree. Patent trolls and a few companies that want to make money off patent threats have portrayed this bill as a “consensus,” in the hopes of making it a baseline for negotiations in an upcoming Congress. In reality, it’s an extreme piece of legislation that should be rejected. Tillis’ bill would revive some of the cruelest patent abuses of the past two decades.

The whole post is worth reading, but those are some of the key points being made.

Probably the one good thing in all of this is the fact that this is being introduced in an election year. When the election is called on November 8th, later on this year, this bill will likely not survive thanks to the gavel being struck to end the session. It would be difficult to get this bill through before then. Still, nothing is stopping Tillis from simply re-introducing the legislation during the next government session.

At the very least, this shows that there is efforts underway to make the patent system in the US even more broken then it already is. If you want a great way to highlight just how broken the patent system is in the US, just take a gander over at the stupid patent of the month. Just try reading three pages of headlines without going, “Oh, come on!”

Hopefully, this bill never becomes law because America has enough problems already. The country doesn’t need an even more broken patent system to hold innovation hostage by those who are all too happy to abuse such a system for a fast buck.

Drew Wilson on Twitter: @icecube85 and Facebook.

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