At EFF, we’ve always stood up for the freedom to tinker and innovate. Unfortunately, our patent system doesn’t promote those freedoms. In some areas, like software, it’s causing much more harm than good. And the system is rife with patent trolls: companies that are focused on licensing and litigating patents, instead of making things. In 2021, the majority of all patent lawsuits were filed by these trolls. In fact, patent trolls have filed the majority of patent lawsuits for many years now.
But there’s reason for hope. Patent trolls have finally been seen as the problem they are, and both courts and Congress seem to be moving away from simplistic misconceptions like believing they can create more innovation just by handing out more patents.
This year, EFF fought hard for increased transparency in the patent system that will allow us to call out the worst actors, and ultimately get a more balanced patent system. We also worked to defend and strengthen patent review systems that allow the worst patents to be kicked out of the system more efficiently.
Open Records in Courts, and at the Patent Office
Patent cases in particular suffer from a problem of overzealous secrecy. In 2019, EFF intervened in a court case called Uniloc v. Apple to defend the public’s right to know the details of what’s going on in patent cases. This case was an egregious one, in which a patent troll that had sued hundreds of companies was sealing up court records showing whether it even had the right to sue at all.
Turns out, Uniloc didn’t have the legal right, known as standing, to sue over this patent. By intervening in the case, EFF was able to get the whole story showing that Uniloc did not have the ability to litigate the case, and vindicate the public’s right to access court records.
Although EFF won the right for the public to read nearly all of the court records in this case, Uniloc has continued to argue for keeping a small but critical portion of the evidence in this case hidden—the documents that show how much Uniloc was paid by the companies who paid it for a patent license. These license fees were generally paid due to litigation, or the threat of litigation. The sums were critical to whether Uniloc had a right to sue at all, as the court’s ruling dismissing Uniloc’s suit hinged on the fact that Uniloc had not made enough licensing revenue to have the right to bring the patent infringement claims.
We won a powerful decision in February that ordered Uniloc to disclose all of the remaining information at issue, including the licensing information that was central to the district court’s dismissal of the patent suit. Uniloc appealed again, and in December we argued before the U.S. Court of Appeals for the Federal Circuit that the public had a right to access the records. We’ll continue to defend the public’s right to open courts in patent litigation.
The Uniloc case isn’t the only place where we’re fighting for the public’s right to a more open patent system. We’re also continuing to push for real accountability and openness in Congress.
Very often, victims of patent troll lawsuits don’t even know the identities of the people who sued them and stand to profit from the lawsuit. EFF is supporting a new bill in Congress that would remedy this unacceptable situation. The bill, called the “Pride in Patent Ownership Act” (S. 2774), would require patent owners to record their ownership at the U.S. Patent and Trademark Office (USPTO). The bill suffers from a very weak enforcement mechanism, in that the penalties for noncompliance are much too light. Still, we’re glad to see the issue of bringing more transparency to the patent system is getting some public attention.
Fighting for Strong Defenses Against Bad Patents
The USPTO grants hundreds of thousands of patents each year, and examiners don’t have enough time to get it right. That’s why it’s critical that we have a robust patent review system, which gives people and companies threatened over patents a chance to get a patent reviewed by professionals—without spending the millions of dollars that a jury trial can cost.
The best system for this so far is inter partes review, or IPR, a system that Congress set up 10 years ago to weed out some of the worst patents. IPR isn’t perfect, but it’s thrown out thousands of bad patents over the years and is a big improvement over the previous review systems that were used by the patent office.
That’s why we’re supporting the “Restore America Invents Act,” (S. 2891), which was introduced in September and closes some big loopholes that certain patent owners have used to avoid IPR challenges. While other reforms are needed, the Restore AIA bill takes some important steps that will make clear a strong IPR system is here to stay.
We also fought off an attempt to overthrow the IPR system altogether. Unsurprisingly, patent owners have tried repeatedly to convince the Supreme Court that post-grant challenges such as IPR are unconstitutional. This year, they failed again, when the Supreme Court declined to throw out the IPR system in U.S. v. Arthrex. As EFF explained in our brief for that case, filed together with Engine Advocacy, the IPR system has driven down the number of patent infringement lawsuits that clog federal courts, raise prices, and smother innovation.
Speaking Up for Users at the Patent Office
Finally, at two different times this year, EFF filed comments with the U.S. Patent and Trademark Office expressing our opposition to the agency’s continued efforts to increase the number of patent monopolies that are created at the public’s expense.
First, we spoke out against proposed regulations that would have opened the floodgates to new and unnecessary types of design patents on computer-generated images. Design patents on the whole are a terrible deal for the public: they give rights holders the power to limit competition, like utility patents, but in return the patent owner provides almost nothing to the public realm.
Later in the year, we also spoke up about a planned USPTO study of patent eligibility that looks to be rigged in favor of patent owners from the get-go. The “study” is a list of loaded questions proposed by U.S. senators who have made it clear they want to revoke important legal precedents, including Alice v. CLS Bank, the landmark decision that bars so many abstract “do-it-on-a-computer” style patents.
In 2020, the great majority of software-related appeals where patent eligibility was at issue ended up with the patents being found invalid. That’s happening because of the Alice precedent, and we won’t let that progress get rolled back.
