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america invents act, IP, Patent

Lies And Ignorance Underlying The Patent Reform Act

Yes, it’s back. Another congressional term, another patent reform act, and another opportunity for corporate hacks to spread lies and misinformation. You’d think this dance was getting a little old, but those lobbyists keep finding ways to keep things interesting.  In fact, a recently introduced amendment would establish a “pilot program for review of business method patents.” I join Masnick’s confusion about “how you have a ‘pilot program’ to study whether or not business method patents should be valid.”  Of course, whether it came from Sen. Schumer’s office, or just something the National Journal thought up on its own, the so-called business method patent is hardly a “relatively new patent concept.” More on that later.

First, let’s examine the first of what are sure to be many lies promulgated by the supporters of these ad hoc “reform” bills, starting with the Patent Fairness Coalition and the changes to the law on willful infringement.  The new bill proposes to codify recent court decisions that willful infringement can only be supported by clear and convincing evidence that the infringer acted with objective recklessness and the objectively-defined risk was either known or so obvious that it should have been known by the infringer.  Patent owners typically try to allege willful infringement because when they’re successful, the court has discretion to increase the jury’s damages award up to 3x.

The coalition tells us that this is important because:

Under current law, it is easy for plaintiffs to allege that defendants “knowingly” infringed on a patent. Conversely, it is difficult, time-consuming and exceptionally expensive to prove that willful infringement did not occur.

Well, this certainly might be a reason to revise the law on willful infringement if it wasn’t for the fact that this is exactly the way its supposed to be. It’s always been “easy for plaintiffs to allege” anything. Pleading standards are remarkably low, requiring only “a short and plain statement of the claim.” After all, it was relatively easy for coalition member Apple to claim that its entitled to treble damages from HTC. Of course, it’s one thing to accuse someone of doing something, but quite another to prove it.

While the policy behind making allegations might be something over which reasonable minds may differ, the coalition’s second sentence is just downright dishonest. No court in the world, upon the mere allegation that infringement was willful, requires a defendant to “prove that willful infringement did not occur.” In fact, if this were the case, defendants would be found willful in literally every case, since you can’t really prove that something didn’t happen. Instead, it is the plaintiff’s burden, once the allegation is made, to prove the defendant acted willfully.

As a practical matter, this change to the law might have little practical effect, since the courts have gotten there first, but the fact that the coalition is willing to use such blatant lies to support passage of the amendment makes their motivations and remaining positions immediately suspect. As the bill continues to be debated, both in Congress and among the public, I’ll continue to closely watch the positions of the various parties and point out the deception where I see it.

Getting back to this supposedly “new” concept of business method patents, IP lawyer Eric Goldman recently pointed out this early 20th Century patent on Skywriting which claims a “method of forming advertising signs … by means of an aeroplane whilst emitting therefrom a trail of persistently visible material, which consists in producing the first letter at the extreme right of the sign …” And lest you think this was an isolated patent of little economic significance, Goldman’s researcher also found this advertisement asserting that the Skywriting Corporation of America had purchased all patents for skywriting, and that “vigorous action will be taken against infringers.” Hopefully, whoever is tasked with the business method “pilot program” will do some homework before jumping to any conclusions.

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